The Electoral Legislation Amendment Bill 2018 was introduced into the Legislative Assembly on 8 May 2018, substantially amending Part 12 of the Act, and introducing a broad political finance scheme including disclosure, funding, reporting and enforcement provisions.
In the Legislative Council, amendments, and new clauses (drafted by the Government, Opposition, and crossbench MPs) meant that the Bill underwent several changes prior to being passed by Parliament.
Notably, the amendments:
- allowed electronic assisted voting for a prescribed eligible class of electors, without requiring them to vote in person at a voting centre
- introduced administrative expenditure funding and policy development funding, and access to advance funding and
- required the Minister to appoint an Expert Panel (Panel) to conduct this Review.
Summary and key features of Victoria’s state government political finance scheme
Victoria’s scheme aims to ensure Victoria’s electoral integrity by, limiting the influence of private donations in the political process, ensuring appropriate transparency about the nature of private donations, fostering equal participation in the electoral process, and providing enforcement mechanisms to ensure compliance with the scheme.
The key features include:
- a general cap that limits political donations to and from a single source at $4,000 (now indexed to $4,320) for each four-year State election cycle (donations to a Registered Political Party (RPP), its endorsed candidates, elected members and nominated entity are all captured under the RPP general cap)
- a ban on foreign donations – political donations can only come from Australian citizens, residents, or businesses
- a ban on anonymous donations of $1,000 (now indexed to $1,080) or more
- requiring political donations over the disclosure threshold to be declared to the Victorian Electoral Commission (VEC) within 21 days and published by the VEC within 7 days
- ensuring that all who are involved with political fundraising or campaigning, including third party campaigners (TPCs) are subject to the scheme
- a significant increase in public funding to candidates, with candidates who received four per cent or more of first preference votes, or were elected in an election, receiving $6 per vote in the Assembly and $3 in the Council (indexed on an annual basis)
- administrative funding for RPPs with elected members and independent members of Parliament, and policy development funding for eligible RPPs
- threshold amounts, caps and funding units to be indexed annually on 1 July in line with the CPI
- monitoring and compliance functions for the VEC, with significant penalties for breaches of the scheme. For example, failing to disclose a donation is an offence subject to a fine of 200 penalty units (currently $36,984) and knowingly accepting an unlawful donation is an offence subject to a fine of 300 penalty units (currently $55,476) and two years’ imprisonment.
Political donations for State elections must be paid into a state campaign account
The state campaign account is intended to separate funding from political donations from funds used for other purposes – such as party administration, operations, or other activities including Commonwealth election campaigns.
RPPs, candidates, groups, elected MPs, nominated entities, associated entities, and TPCs must all keep a state campaign account. Political donations and public funding administered by the VEC must be paid into a state campaign account, and some funding sources (e.g., annual membership fees paid to RPPs) cannot be paid into the state campaign account. All political expenditure must be paid out of the state campaign account, which means that annual membership fees paid to RPPs cannot be used for political campaigns, noting that different obligations apply for associated entities and TPCs as discussed below.
The Act also provides for the separate treatment of funds for Commonwealth and State electoral purposes. In particular:
- money received by a recipient for Commonwealth electoral purposes must not be paid into a state campaign account. This money cannot be used for political expenditure in Victoria
- transfers of funds between Victorian and other branches of an entity are subject to the political donations scheme, such as the general cap (e.g., there is no exemption to facilitate the transfer of funds between the federal and Victorian branches of a RPP).
If membership fees or annual levy payments are deposited by associated entities and TPCs into their state campaign accounts, they will be treated as political donations and the relevant disclosure obligations will apply.
Eligible RPPs, independent MPs and candidates can receive public funding entitlements and other funding streams
Following the 2018 reforms, the amount of public funding for election campaigns increased significantly. The 2018 reforms to the Act also provide for administrative funding for RPPs with elected members, and policy development funding for eligible new and small RPPs.
- Public funding – This is the only funding scheme that covers costs associated with an electoral campaign (i.e., electoral expenditure and political expenditure). For FY22/23, it is calculated at $6.49 per first preference vote for an Assembly candidate, and $3.24 per first preference vote for a Council candidate. Candidates must receive at least four per cent of the first preference vote, or be elected, to receive this funding. In FY21/22 the VEC paid $5.913 million in public funding. Recipients of public funding may apply for advance payments for the next election based on the number of votes received at the previous election. Necessary adjustments are made after the next election.
- Administrative expenditure funding – This is provided to elected members of Parliament to cover administrative expenses including those incurred in complying with obligations relating political finance laws. For FY22/23, it is calculated as $216,210 for the first elected member of an RPP or an independent, $70,660 for the second elected member of an RPP, and $37,850 for the third to 45th elected member of an RPP. In FY21/22 the VEC paid $6.605 million in administrative expenditure funding.
- Policy development funding – This is a payment made to assist in policy development, which cannot be spent on political campaigning. For FY22/23, it is calculated as $1.08 per vote or $27,020, whichever is greater. Parties who receive public funding (i.e., receive more than four per cent of the vote or are elected) cannot receive policy development funding. In FY21/22 the VEC paid $32,152 in policy development funding.
Summary and key features of Victoria’s local government political finance scheme
Laws regulating political donations and disclosure at the local government level are limited in comparison to those at the state level. At the local government level, the Local Government Act 2020 (LGA) provides that:
- candidates must within 40 days of election day submit a local government disclosure return to their council’s CEO for donations above $500 (the return must include all monetary donations, in-kind support, donations of services and aggregate donations equal to, or over the value of, $500)
- the council’s CEO must publish a summary of it on the council’s website and provide a report to the Minister for Local Government within 14 days.
Although each council must publish a summary of gifts to election candidates, there is no consolidated public register of local government political donations and there are no disclosure obligations for donors. The Local Government Inspectorate can investigate and prosecute breaches of requirements relating to the disclosure of donations, such as knowingly providing false or misleading information in a local government disclosure return, and the penalty is up to 60 penalty units.
Updated