Electoral (Funding, Expenditure and Disclosure) Amendment Bill

Second Reading

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (17:48): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Electoral (Funding, Expenditure and Disclosure) Amendment Bill 2016 ('Bill') proposes various amendments to the Electoral Act 1985 ('Electoral Act') that relate to the funding, expenditure and disclosure scheme in Part 13A of the Electoral Act.

Part 13A was inserted into the Electoral Act by the Electoral (Funding, Expenditure and Disclosure) Amendment Act 2013, which commenced on 1 July 2015, and sets out an electoral funding, expenditure and disclosure scheme for South Australia.

The amendments contained in the Bill are made in response to various concerns that have been raised by the Electoral Commission of South Australia and political parties in relation to Part 13A.

The Bill proposes an amendment to section 130A to clarify the approach that should be taken to the rounding of indexed amounts in Part 13A. Currently, section 130A(8) provides that amounts should be rounded to the nearest whole number. The Bill amends section 130A(8) to clarify that, for amounts referred to in section 130P, they will be rounded to the nearest whole cent. This amendment is necessary because section 130P sets the amount of public funding payable per vote at either $3.00 or $3.50 (indexed). If, in the course of indexing those amounts, they were rounded to the nearest whole dollar, the outcome would be quite absurd. All indexed monetary amounts other than in section 130P are much higher amounts or thresholds, and so the same issue does not arise.

The Bill proposes the repeal of section 130C. Section 130C provides that 'nothing in this Part requires the disclosure of any details required to be furnished to the Australian Electoral Commission under Part 20 of the Commonwealth Electoral Act 1918.' Section 130C is problematic. Its effect is unclear. Given that South Australia's reporting requirements and timeframes are stricter than those in the Commonwealth scheme, there is a risk that section 130C could operate to undermine the strict reporting requirements in the South Australian scheme. The Commonwealth and South Australian disclosures schemes have been designed, and operate, separately and differently from each other. Section 130C is not required.

The Bill proposes an amendment to section 130E to provide that if a registered political party has endorsed a candidate in an election, the agent of the party is the agent of the candidate. This is already the case in the context of Legislative Council elections where a registered political party endorses all of the members of a group. While it is assumed that all candidates in House of Assembly elections who are endorsed by a party will nominate the party agent to be their agent, currently each candidate is required to take the step of nominating the party agent as their own. The Bill sets the starting point as being that all candidates endorsed by a party will have the party's agent as their own.

The Bill amends section 130Q, which sets out the circumstances in which public funding payments should be reduced or not made. One such circumstance is where, broadly speaking, the political expenditure incurred is less than the amount of public funding payable. This is to ensure that no candidate or party obtains a windfall benefit from the public funding scheme. The Bill amends section 130Q to clarify that where a public funding payment is being made to the agent of the party, that consideration should be given to the combined political expenditure of the political party and its endorsed candidates when determining whether any reduction to the amount of public funding should be made under section 130Q.

Section 130U of the Electoral Act provides for special assistance funding to be paid on a half yearly basis to compensate political parties for the cost of complying with the reporting obligations in the funding, expenditure and disclosure scheme. The Bill amends section 130U to:

provide scope for the amounts of half yearly special assistance funding to be increased by way of regulation; and

increase the period for lodging an application for special assistance funding from within 7 days of the end of the half yearly period to within 30 days of the end of the half yearly period.

In addition, the Bill insert new section 130UA, which allows for an additional one-off amount of special assistance funding to be paid to registered political parties to assist with the initial costs associated with complying with the funding, expenditure and disclosure scheme. For parties with 5 or fewer members, the one-off payment is up to a maximum of $56,000. For parties with 6 or more members, the one-off payment is up to a maximum of $96,000.

The Bill makes a minor amendment to section 130Z of the Electoral Act, which relates to expenditure caps. It clarifies that, for political parties, the expenditure cap relating to House of Assembly elections will be calculated by reference to the number of candidates endorsed at the hour of nominations, rather than at the start of the capped expenditure period. This is to reflect the fact that parties are unlikely to have endorsed all of their candidates at the start of the capped expenditure period.

The Bill amends sections 130ZF, 130ZN, 130ZO and 130ZP of the Electoral Act with a view to clarifying the requirements for lodging returns under Part 13A. These amendments are not intended to water down the reporting requirements. Rather, they clarify what the reporting periods are, and when the return for each reporting period is due. An issue that was identified with the current provisions is that, in the weekly reporting period prior to an election, weekly returns are due on the last day of the week to which they relate. Practically speaking, compliance with this is not feasible. The amendments will allow reports in relation to a weekly period to be due 5 days after the end of the period to which they relate.

The Bill alters the requirement to furnish audit certificates in the designated period, being the period starting on 1 January prior to a general election and ending 30 days after polling day. During parts of the designated period, returns are required to be provided on a weekly basis. The requirement for each of these returns to be accompanied by an audit certificate is onerous. This Bill proposes that in the designated period, audit certificates will be required twice. The first audit certificate will be due one week before polling day, and will relate to all returns furnished up until that date. The second audit certificate will relate to all of the remaining returns furnished in the designated period.

In addition, the Electoral Commissioner will have a discretion to extend the period for providing an audit certificate outside of the designated period by 30 days.

Section 130ZZE of the Act sets out a range of offences relating to Part 13A. The Bill inserts new section 130ZZE(9), which provides a defence for a person who can prove that they exercised all reasonable diligence to prevent the commission of the offence.

Finally, the Bill amends section 107 of the Electoral Act to provide that the Court of Disputed Returns may declare an election void where a person has incurred political expenditure in excess of the applicable expenditure cap during the capped expenditure period in relation to the election, and the Court of Disputed Returns is of the view that the result of the election was affected by the breach.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Electoral Act 1985

4—Amendment of section 107—Orders that the Court is empowered to make

The clause provides a new subsection (7) to allow the Court of Disputed Returns to declare an election void on the ground of a breach of section 130ZA if the Court finds, on the balance of probabilities, that the result of the election was affected by the breach.

5—Amendment of section 130A—Interpretation

The clause amends section 130A(8) to provide that an amount adjusted by indexation in accordance with the subsection is to be rounded up to—

in the case of an amount referred to in section 130P—the nearest whole cent; or

in any other case—the nearest whole number.

6—Repeal of section 130C

This clause repeals an obsolete section.

7—Amendment of section 130E—Appointment of agents by parties, candidates and groups

The clause amends section 130E to provide that if a registered political party has endorsed a candidate or all the member of a group of candidates, the agent of the party is the agent of the candidate or group (as the case requires) for the purposes of Part 13A in relation to the election.

8—Amendment of section 130Q—Payment not to be made or to be reduced in certain circumstances

This clause makes an amendment of a technical and consequential nature.

9—Amendment of section 130U—Entitlement to and claims for special assistance funding

Subclauses (1) and (2) amend the section to allow the amount of the half yearly entitlement as defined in the section to be a greater amount prescribed by regulation than that currently in section 130U(2). Subclause (3) amends section 130U(3)(a) to change the period in which a claim under subsection (1)(c) is to be submitted from 7 days to 30 days.

10—Insertion of section 130UA

This clause inserts a new section as follows:

130UA—Entitlement to and claim for one-off payment of special assistance funding

The proposed section sets out the circumstances in which a registered political party may be entitled to a one-off payment of special assistance funding in respect of prescribed administrative expenditure. Prescribed administrative expenditure is defined as administrative expenditure incurred by a registered political party for the purpose of complying with Part 13A that is in excess of the administrative expenditure incurred by the party in relation to which a payment of a half yearly entitlement to special assistance funding has been paid. The proposed section also sets out the amount of the funding (subsection (2)) and the time periods for submitting a claim for such funding (subsection (3)).

11—Amendment of section 130V—Making of payments

These amendments are consequential on the amendment in clause 10.

12—Amendment of section 130Z—Expenditure caps

This clause amends the reference in section 130Z(1)(b)(i) to the number of electoral districts in which the party endorses a candidate to be calculated from the hour of nomination instead of from the start of the capped expenditure period.

13—Amendment of section 130ZF—Returns by candidates and groups

The clause amends the prescribed times for furnishing a campaign donations return.

14—Amendment of section 130ZN—Returns by registered political parties

The clause amends section 130ZN to provide that the agent of each registered political party must, at the prescribed times, furnish to the Electoral Commissioner a political party return in respect of each prescribed period, in a form approved by the Electoral Commissioner. The clause makes a number of consequential amendments and defines the prescribed periods in respect of a political party return and the prescribed times for furnishing the returns.

15—Amendment of section 130ZO—Returns by associated entities

The clause amends section 130ZO to provide that the financial controller of an associated entity must, at the prescribed times, furnish to the Electoral Commissioner an associated entity return in respect of each prescribed period, in a form approved by the Electoral Commissioner. The clause makes a number of consequential amendments and defines the prescribed periods in respect of an associated entity return and the prescribed times for furnishing the returns.

16—Amendment of section 130ZP—Returns by third parties

The clause amends section 130ZP to provide that the agent of a third party must, at the prescribed times, furnish to the Electoral Commissioner a third party return in respect of each prescribed period, in a form approved by the Electoral Commissioner. The clause makes a number of consequential amendments and defines the prescribed periods in respect of a third party return and the prescribed times for furnishing the returns.

17—Amendment of section 130ZV—Audit certificates

The amendment in subclauses (1) and (2) are consequential in nature. The amendments in subclauses (3) and (4) allow an extension of time for submitting an audit certificate in respect of all returns required to be submitted under Part 13A. Subclause (5) inserts new provision to allow for the provision of 2 audit certificates relating to the periods outlined in proposed subsection (2a)(a) and (b) to be furnished to the Electoral Commissioner in respect of all returns furnished during the designated period. The certificates must be furnished at times prescribed in proposed subsection (2b).

18—Amendment of section 130ZZE—Offences

The clause inserts a new subsection (9) which provides that in proceedings against a person for an offence under Part 13A, it is a defence for the person to prove that the person exercised all reasonable diligence to prevent the commission of the offence.

19—Amendment of section 130ZZF—Non-compliance with Part does not affect election

This amendment is consequential on the amendment in clause 4.

Debate adjourned on motion of Hon. T.J. Stephens.