This guide steps you through what to do if your organisation has spent more than $250,000* on electoral expenditure in a financial year

*If your organisation incurred $15,200 in electoral expenditure in a financial year and this was at least one-third of its revenue for that year, this guide also applies to you.

Under Commonwealth electoral law, special obligations apply to “significant third parties” — organisations that have spent over $250,000 on “electoral expenditure”. Importantly, once you are a significant third party, you have to comply with a different, broader definition of “electoral expenditure”: all expenditure incurred “in relation to an election”. Following references to “electoral expenditure” relate to this broader definition.

Those obligations are:

1. registering as a significant third party with the AEC, and appointing a financial controller;

2. making annual disclosures of gifts and electoral expenditure to the AEC; and

3. complying with restrictions on accepting donations from non-residents of Australia (foreign donations).

1. Registering and appointing a financial controller

Your organisation will need to nominate a “financial controller”, typically the organisation’s secretary, and register with the AEC within 90 days of becoming a significant third party using this form. 

The financial controller will be responsible for completing an annual return for the organisation.

2. Disclosing gifts and electoral expenditure

In October each year, the financial controller must provide a return via the AEC’s eReturns portal, or using an online form. The annual return must set out:

1. Your organisation’s total receipts (including gifts-in-kind**) for that financial year — that is, the gross amount of all cash and non-cash income received by your organisation in that financial year; 

2. Your organisation’s gross total cash payments to external entities in that financial year; 

3. Your organisation’s total outstanding debts as at 30 June 2021. For debts of over $15,200 owed to a single person or entity, details of the debt including the full name, address, the amount owed and whether the money is owed to a financial institution, need to be disclosed. 

4. If your organisation is a registered charity: the details of all amounts (including loans) received over $15,200 if the income was used, in whole or in part, to incur electoral expenditure. The details must include:

   1. the full name and address of the person or entity from whom the income came; 

   2. the date you received the income; 

   3. the amount or value of the income; 

   4. whether the income was a “donation” or “other receipt”.

5. If your organisation is not a registered charity: the details of all amounts (including loans) received over $15,200, regardless of whether the money was used to incur electoral expenditure. The details must include:

   1. the full name and address of the person or entity from whom the income came; 

   2. the date you received the income; 

   3. the amount or value of the income; 

   4. whether the income was a “donation” or “other receipt”. 

6. Your organisation’s total electoral expenditure.  

**Gifts-in-kind include things with commercial value, such as the provision of a professional service. It does not include unskilled volunteer labour, like members tending a stall.  

Returns are published on the Transparency Register on the first working day of February. For more detail on how to disclose as a significant third party, see the AEC guide.

Donor disclosure

Donors who have given over $15,200 to a significant third party must lodge an annual Donor to Political Party and Political Campaigner Disclosure Return via the eReturns portal by 17 November each year. A guide to filling out the form is available here. Note that donors are only required to disclose their gifts to significant third party charities if the gift was used, in whole or in part, to incur electoral expenditure. Further, if a donor makes a gift to an organisation or person with the intention of benefiting a significant third party, the donor must disclose as if they had made the gift directly to the significant third party. 

Penalties: If a financial controller fails to comply with these disclosure obligations, they will be personally liable of a fine of up to $26,640 (120 penalty units) or three times the disclosable amount, whichever is higher. 

3. Complying with restrictions on foreign donations  

The Act imposes slightly tighter restrictions on significant third parties receiving foreign donations than those third parties.  

Who is a foreign donor? 

The full list of who qualifies as a “foreign donor” is provided in s. 287AA of the Act, but most relevantly for our sector it includes:

• entities that are not incorporated in Australia, or do not have their head office or principal place of business here;

• individuals who are not Australian citizens or residents; and

• New Zealand citizens who do not hold a special category visa. 

What are the restrictions?

As with third parties, significant third parties are allowed to accept donations over $100 from a foreign donor only if the donation is not intended to be used (by either the donor or recipient) for incurring electoral expenditure.

In addition, significant third parties can only accept donations over $1,000 from a foreign donor if the terms of the gift are inconsistent with using it to incur electoral expenditure. 

Practically, this means significant third parties will need systems in place when seeking gifts if they could be used on electoral expenditure. Some organisations use a checkbox on their fundraising page, so they can identify foreign donations and quarantine them.

If a significant third party receives a donation from a foreign donor in contravention of the restrictions, the Act provides six weeks from the gift being made for it, or an equivalent amount, to be returned to the donor or transferred to the Commonwealth. 

Penalties: If a financial controller fails to comply with these provisions, they will have committed an offence, and will be personally liable for a fine of up to $44,400 (200 penalty units) or three times the amount of the prohibited donation, whichever is higher.