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ABL presents update on Commonwealth Electoral Law for donors and grant makers

Native Title & Public Interest Law
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Last week Arnold Bloch Leibler presented at a webinar for members of the Australian Environmental Grantmakers Network to discuss the implications of recent amendments to the Commonwealth Electoral Act.

AEGN is a member-based network of trusts, foundations and individual donors that seeks to grow effective funding to the environment. Part of AEGN’s work is to bring funders together to learn about issues relevant to enabling effective giving. Arnold Bloch Leibler is proud to act as AEGN’s honorary lawyers.

In summarising the key messages of ABL’s presentation, ABL Public Interest Partner, Peter Seidel, had this to say:

"Despite the very real concerns raised last year when amendments to the Electoral Act were being rushed through, including threats to civil society’s participation in the election process, now that the Amending Act has passed it is important to separate the worst-case-scenario critiques from the settled language of the Act. The dominant purpose test for what is electoral expenditure, for example, remains in place and the Act has very limited retrospective application, allowing cool heads to prevail as environmental charities seek to apply the Act to their circumstances."

Despite the very real concerns raised last year when amendments to the Electoral Act were being rushed through, including threats to civil society’s participation in the election process, now that the Amending Act has passed it is important to separate the worst-case-scenario critiques from the settled language of the Act.

Peter Seidel, Public Interest Partner

What are the changes?

Relevant to charities and their funders, the Electoral Legislation Amendment (Political Campaigners) Act 2021 (Cth) included the following key changes to the Commonwealth scheme for electoral funding and financial disclosure:

  • Changing the name of ‘political campaigner’ to ‘significant third party’
  • Reducing from $500,000 to $250,000 the electoral expenditure threshold for determining whether an entity is a ‘significant third party’, and
  • Adding an additional category of expenditure to the definition of ‘electoral expenditure’ for entities that are required to register as significant third parties.

What do you need to do?

Entities that incurred over $250,000 in electoral expenditure in one of the past three financial years (or that satisfied one of the alternative tests) were required to register as a significant third party by 14 March 2022.  They must submit an Annual Return within 30 days of registration. 

Significant Third Parties are also required to appoint a financial controller who is responsible for lodging the entity’s Annual Return with the Australian Electoral Commission.

Charities that are classified as third parties or significant third parties under the Electoral Act need to comply with ongoing disclosure obligations as well as existing limitations on the acceptance and use of foreign gifts.

Funders that provide donations, grants and gifts-in-kind to support charities to incur electoral expenditure also need to be aware of their disclosure obligations. In general terms, donations that are not used for the purpose of electoral expenditure are not relevant to the AEC disclosure regime.

To view the presentation slides, click here. To view our previous updates regarding amendments to the Electoral Act and implications for charities undertaking critical advocacy activities, click here.

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