Electoral Bill Amendments a Positive Step

Krystian Seibert looks into the new definition of “electoral expenditure” and what the electoral bill amendments mean for charities.

Last week, the Australian government released draft amendments to its Electoral Funding and Disclosure Reform Bill and referred them off to the Joint Standing Committee on Electoral Matters (JSCEM) for a quick inquiry.

The proposed amendments are sensible and well targeted and have therefore been welcomed by various stakeholders across the not-for-profit sector.

The government should be commended for listening to the widespread and serious concerns raised about the bill from a diverse range of stakeholders, and for responding so comprehensively to both these concerns and the various recommendations made by the JSCEM when it first examined the bill earlier this year.

One of the major problems with the bill is that it uses an unworkable definition of “political expenditure” – an issue I explored in an article back in April. The draft amendments will scrap that approach, and replace it with a new definition of “electoral expenditure”. Given how central this proposed new definition is to the operation of the bill, I want to look into it in a bit more detail.

Basically, electoral expenditure will be any spending on “electoral matter”, which is defined in what will be a newly inserted s4AA of the Commonwealth Electoral Act 1918, shown below.

If you spend more than $13,800 on electoral expenditure then you’ll be classified as a “third party” (that is, an organisation involved in the electoral process but which is not seeking election to office itself) and will be required to provide the Australian Electoral Commission (AEC) with a return detailing how much you spent and declaring any donations above $13,800 used to fund this spending.

If you spend more than $500,000 on electoral expenditure in one year or any of the previous three years, then you’ll be classified as a political campaigner, which comes with additional compliance obligations. Compared with what’s currently in the bill, the draft amendments increase the threshold for becoming a political campaigner considerably.

The main problem with the definition of political expenditure that’s currently in the bill is that it’s broad and captures activities like the mere expressing of views on an issue in an election. Many of Australia’s charities are strong advocates for their causes and express views on policy issues in relation to the environment, health, education and the list goes on – and rightly so, because advocacy is central to the role of charities.

The bill therefore threatened to suck many charities into a very complex and burdensome new regulatory framework.

To make things even more confusing, the definition of political expenditure was also vague, so much so that even the AEC struggled to explain it clearly within its own guidance for third parties released earlier this year.

The proposed new definition of electoral expenditure is very tightly focused on actual electioneering. It’s much clearer and specifically covers activities whose main purpose is to influence how people vote in an election – that would include activities such as handing out policy comparison cards at election booths, or robo-calling voters about a particular policy.

Although there are some charities that undertake such electioneering activities (although as charities they can’t actually support or oppose candidates or parties), the new definition makes it clear that the issues-based policy advocacy which so many charities typically undertake is definitely not covered. Just to be sure, it also specifically exempts participating in government consultations and Parliamentary inquiries.

It’s reasonable to expect that where charities do undertake electioneering activities, they should meet some basic transparency requirements regarding how much they spend on these activities and whether they received any larger donations to fund this spending. And charities are already required to do that anyway under the existing law.

A lot of the initial concern about the bill related to it restricting the ability to use international philanthropy to fund some forms of advocacy by charities, however the broader concerns with the bill then arose because of the other compliance and reporting requirements it introduced and the question of international philanthropy took somewhat of a backseat. So how do the draft amendments impact upon that issue?

Once again, because the new definition of electoral expenditure is only focused on electioneering, that means that international philanthropy will be able to continue to fund the issues-based policy advocacy which charities typically undertake.

However, it won’t be able to fund any advocacy by charities where it involves electioneering – and anecdotally there are some instances where those activities have been funded by international philanthropy.

Personally, if there is proper transparency around where donations come from, I don’t think we need to ban foreign donations to political parties let alone third parties. If the information is publically available, then it can be scrutinised by the media and others, and people can make their own judgements about the political parties and third parties who receive them. In particular, if foreign governments are trying to interfere with our democracy, then it’s the role of our national security agencies to tackle that rather than our electoral laws.

But polling does show that a strong majority of the public supports such a ban and the major political parties have adopted that policy. Given that, it is hard to impose the ban on political parties but still let third parties, including charities, receive and use foreign donations for electioneering.

If the bill is amended to replace the broad and vague definition of political expenditure with a more clear and narrow definition of electoral expenditure, then I think it’s a hard argument to make that charities should receive a special exemption.

The JSCEM inquiry is accepting submissions on the draft amendments until Thursday 27 September, and provides an opportunity to scrutinise the amendments further and ensure that we understand the implications of the detail. But by and large, it seems that things are headed in the right direction.

About the author: Krystian Seibert is an industry fellow at the Centre for Social Impact at Swinburne University of Technology and has a strategic advisory role with Philanthropy Australia.