Strict new laws to scrutinise advocacy by charities

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Controversial new political advocacy laws have been proposed by the federal government in the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017.

New political actors

The Bill, introduced late last week, proposes changes to the Commonwealth Electoral Act, which currently regulates funding and donations to registered political parties and candidates.

It proposes to create and regulate three new categories of political actors:

  • political campaigners, who have incurred “political expenditure” of $100,000 or more in any one of the previous 3 financial years, or who have incurred political expenditure of $50,000 where that represents 50% or more of their income for the previous financial year;
  • third party campaigners, who are not political campaigners but who have incurred “political expenditure” of more than $13,500 in the financial year; and
  • associated entities, who operate wholly, or to a significant extent, for the benefit of a political party, meaning that:
    • the entity, or an officer of the entity, has stated privately or publicly that the entity is to operate for the benefit of a party or candidate, or to the detriment of a party or candidate; or
    • the entity’s expenditure for a financial year is predominantly “political expenditure” which is used to promote a political party or candidate or their policies; or to oppose a political party or candidate or their policies.

“Political expenditure” means expenditure incurred for a number of prescribed purposes, including:

  • the public expression of views on a political party or candidate;
  • the public expression of views on an issue that is, or is likely to be, before electors in an election, whether or not a writ has been issued for the election; and
  • the carrying out of an opinion poll, or other research, relating to an election or the voting intentions of electors.

The definition excludes expenditure for the purpose of news reporting and editorial content, and satirical, academic or artistic purposes.

New obligations

If an entity or organisation falls into one of these three categories, it must register with the Australian Electoral Commission. An entity has 28 days to do so from the start of the new legislation or face a daily penalty of $50,400 (or $25,200 for third party campaigners).

Charities who are one of these new political actors are prohibited from receiving foreign donations for political purposes. Charities must keep any foreign donations in a separate bank account or be faced with a penalty of $126,000 or a term of imprisonment for the charity’s financial controller.

Political campaigners and associated entities will have the same disclosure obligations as registered political parties, meaning they will be required to provide audited annual financial returns to the Electoral Commission disclosing all amounts and discretionary benefits received and all amounts paid by the entity.

Third party campaigners will need to provide returns which disclose their political expenditure for the financial year.

What does this mean for charities?

The government has explained that these new categories have been designed to capture advocacy groups like Get Up who “actively seek to influence the outcome of elections through their campaigning activities”.[1]

However the laws as presently drafted are clearly broad enough to capture a wide range of organisations and charities, including environmental organisations and charities that engage in service delivery and associated advocacy in relation to, for example, homelessness, domestic violence, LGBTI people and indigenous people.

The requirement for organisations to assess whether an issue “is or is likely to be” an issue in an election will no doubt be an ongoing duty fraught with uncertainty. The Act already contains third party disclosure requirements in relation to expenditure for “the public expression of views on an issue in an election” and a 2011 report by the by the Joint Standing Committee on Electoral Matters recommended that the reference to “issues in an election” be removed as it is “particularly confusing” and causes “significant administrative difficulties, due mainly to the difficulties involved with prospectively predicting which issues will be ‘issues in an election’”. [2]

Unsurprisingly, the Bill has not been received well by the sector, particularly in light of the Civil Voices report recently released by Pro Bono Australia and the Human Rights Law Centre which found that charities are already “self-silencing” for fear of financial and political retribution.

The Bill has been referred to the Joint Standing Committee on Electoral Matters and submissions will be accepted until Thursday 25 January 2018. The Committee’s report on the Bill is due on 2 March 2018.

[1] Hansard, 7 December 2017

[2] Report on the funding of political parties and election campaigns, November 2011, Joint Standing Committee on Electoral Matters, page 154

Alice Husband

Alice brings to CRH Law a passion for working with the not-for-profit sector, especially in relation to employment law and the complex legal and human issues that arise during the growth of successful community business organisations.