Legislative Council Fifty-Fourth Parliament, Second Session (54-2) 54 2 Parliament of South Australia Legislative Council published Bills Electoral (Funding, Expenditure and Disclosure) Amendment Bill Electoral (Funding, Expenditure and Disclosure) Amendment Bill Electoral (Funding, Expenditure and Disclosure) Amendment Bill Introduction and First Reading Introduction and First Reading Received from the House of Assembly and read a first time. Second Reading Second Reading The Hon. R.I. LUCAS Legislative Council The Hon. R.I. LUCAS (Treasurer) (16:26): I move: That this bill be now read a second time. I seek leave to have the second reading explanation and explanation of clauses inserted in Hansard without my reading them. Leave granted. Mr President, I am pleased to introduce the Electoral (Funding, Expenditure and Disclosure) Amendment Bill 2021. This Bill makes amendments to Part 13A of the Electoral Act 1985 tomake the election funding, expenditure and disclosure scheme more efficient and workable while maintaining transparency, accountability and consistency with the objects of the scheme. The 2018 election was the first election at which public funding was payable. In July 2019 the Electoral Commission of South Australia published the Report into the Operation and Administration of South Australia’s Funding, Expenditure and Disclosure Legislation. After considering the recommendations in the Report and after further consultation with the Electoral Commission and registered political parties the Government has now prepared a draft Bill. To make the scheme more workable relevant periods that commence when the election is announced will now commence by publication in the Government Gazette rather than be announced in Parliament. This will be helpful in by-elections when Parliament may not be sitting at the time of the announcement. The scope of the application of Part 13A will be clarified. The general limitation that only donations and amounts received for State electoral purposes need to be disclosed under this Part is extended to candidates, groups and relevant entities, which includes registered political parties, associated entities and third parties. Registered political parties, candidates, groups and third parties all have the power to appoint and terminate an agent under the current Act. The Bill will extend this power to associated entities. The processes for dealing with resignation of agents are clarified. The current Act does not set out what would happen if an agent resigned and these amendments fill that gap. A number of amendments dealing with disendorsement of candidates have been moved from the Regulations to the Act, this will provide greater clarity. There have been changes to the keeping of State campaign accounts to ensure transparency. There is a limit of one State campaign account for each political party, third party, candidate and group. Gifts are to be deposited directly into State campaign account and may not be deposited in an account for federal electoral purposes Mr President, all registered political parties will now be eligible for special assistance funding, with three categories of funding. For political parties with zero or 1-5 sitting MPs there will be set amounts prescribed in regulations. For political parties with 6 or more MPs, the types of administrative expenditure that can be claimed will be prescribed up to a maximum amount. The current time period for parties, candidates and groups to opt in to the funding scheme will be extended to allow an extra 7 day period in certain circumstances. The requirement for parties to disclose cap allocation agreements before the election will be removed. However, parties must still lodge a return setting out details of their political expenditure within 60 days of the election. There will be an additional trigger to commence the disclosure period for independent candidates being when they are in receipt of a gift for electoral purposes. This will be in addition to the two existing triggers of a person announcing that they will be a candidate and a person being nominated as a candidate. (see 130ZF(1)) In most cases donation returns will not be required to be disclosed if they are nil returns and the requirement for donors to complete returns has been removed. However, political parties, candidates and groups that receive gifts of the amount or value of more than $5000 must disclose them. Additional reporting requirements for large gifts during designated periods will be removed as these gifts are already required to be reported in the high frequency disclosures that must be made at this time. The definition of third party will be modified so that it is only parties that do incur more than $10 000 of political expenditure in the designated period leading up to an election who will fall within the definition. A party who has an intention to incur that expenditure but does not actually spend the money will not be included in the definition of third party. Third parties will only be required to disclose amounts received that they intend to use for political expenditure in the returns that must be lodged every six months until the next election. The requirement for a third party annual return will be abolished. Registered political parties will be required to submit an annual list of associated entities to the Electoral Commission. This will assist the Electoral Commission in the administration of the Act. The investigation powers of authorised officers are extended and clarified. The current Act provides that for compliance purposes an authorised officer may require that the relevant agent, financial controller or officer of a registered political party, third party or associated entity must produce documents or appear to give evidence. This power for authorised officers to require that a person provide documents or attend at a hearing is extended to candidates and groups. The power to make regulations of a savings or transitional nature is expanded to apply to any amendments to the Act or on the commencement of specified provisions of the Act. These amendments are intended to ensure that our funding and disclosure scheme is both rigorous, workable and transparent. This Bill ensures that the laws are as simple as they can be, while allowing the public to access the information they would expect around donations to candidates, groups, political parties, associated entities and third parties. Mr President, I commend the Bill to the House. Explanation of Clauses 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 130A—Interpretation Various definitions are amended for the purposes of the measure, including the definition of third party. 5—Amendment of section 130C—Application of Part The limitation that only donations and amounts received for State electoral purposes need to be disclosed under Part 13A is extended to candidate, group or relevant entity. 6—Amendment of section 130F—Third parties and associated entities may appoint agents Associated entities are authorised to appoint agents. Another amendment is consequential. 7—Amendment of section 130H—Registration of agents The requirement to notify the Electoral Commissioner of the death or resignation of an agent is limited to registered political parties. 8—Amendment of section 130I—Termination of appointment of agent Certain amendments are consequential. Another amendment provides that if a candidate endorsed by a registered political party in relation to an election ceases to be so endorsed, the agent's appointment as agent of the candidate is taken to be revoked on the date of the disendorsement. 9—Amendment of section 130K—Requirement to keep single State campaign account Sections 130K(1) is amended so that it provides that the agent of a registered political party, third party, candidate or group must keep 1 separate State campaign account for State electoral purposes. 10—Substitution of section 130L Section 130L is substituted: 130L—Gifts to be paid directly into State campaign account Various amendments are made to the provisions relating to the payment of gifts into State campaign accounts. 11—Substitution of section 130U—Entitlement to and claims for half yearly entitlement to special assistance funding Section 130U is substituted: 130U—Entitlement to and claims for half yearly entitlement to special assistance funding Currently, under section 130U special assistance funding is paid for administrative expenditure (which is defined) incurred by a party. The measure substitutes references to administrative expenditure with references to expenditure of a prescribed kind (which is not defined (but allows kinds of expenditure for which special assistance funding is payable to be prescribed by the regulations). In addition, under current section 130U(1)(a) a party is only entitled to special assistance funding if it has a member of Parliament. That requirement is deleted from subsection (1) but the amount of the half yearly entitlement under subsection (2) is amended. Certain parties will be entitled to be paid the amount of expenditure of a prescribed kind incurred by the party during the relevant half yearly period up to a maximum amount prescribed by regulation. Other parties will be entitled to be paid an amount prescribed by regulation. (The variation in amount is to be based on the party's number of members of Parliament). 12—Amendment of section 130Y—Application of Division One amendment relates to the timeframes for lodgement of certificates opting into the limitations on political expenditure by candidates not endorsed by parties. Section 130Y(3) is amended so that it applies to all elections (currently, it only applies to general elections). Section 130Y(5) is a provision that currently is located in the Electoral Regulations 2009 (pursuant to a power to modify the operation of Part 13A by regulation). The provision is elevated into the Act. 13—Amendment of section 130Z—Expenditure caps The requirement under subsection (2a) to notify the Electoral Commissioner of variations to amounts agreed between parties and candidates is deleted. Inserted subsections (3) to (3d) involve provisions that currently are located in the Electoral Regulations 2009 (pursuant to a power to modify the operation of Part 13A by regulation) being elevated into the Act. 14—Amendment of section 130ZF—Returns by certain candidates and groups The disclosure period for campaign donations returns for new candidates (as defined in Part 13A) includes an additional potential starting point of the day on which the person received their first gift for State electoral purposes in relation to the election. The exception in section 130ZF(5a) to furnishing a return (where a ‘nil return’ would be furnished) is extended so that it applies to agents of members of a group of candidates not endorsed by a registered political party (currently, it only applies to agents of candidates and groups endorsed by a registered political party). A new subsection is inserted to provide that a reference to an amount received is a reference to the amount received excluding GST. 15—Repeal of sections 130ZG and 130ZH Sections 130ZG and 130ZH are repealed. 16—Amendment of section 130ZI—Special reporting of large gifts Existing subsection (2) related to sections 130ZG and 130ZH and so is deleted. A new subsection is inserted to provide that a return is not required to be furnished under subsection (1) during the designated period in relation to an election. Another new subsection is inserted to provide that a reference to an amount received is a reference to the amount received excluding GST. The amendment to subsection (1)(c) is technical. 17—Amendment of section 130ZJ—Certain gifts not to be received These amendments are technical. 18—Amendment of section 130ZK—Certain loans not to be received These amendments are technical. 19—Amendment of section 130ZN—Returns by registered political parties A new subsection is inserted to provide that a reference to an amount received is a reference to the amount received excluding GST. 20—Amendment of section 130ZO—Returns by associated entities A new subsection is inserted to provide that a reference to an amount received is a reference to the amount received excluding GST. Another amendment is consequential. 21—Amendment of section 130ZP—Returns by third parties Certain amendments involve inserting references to amounts ‘intended by the third party to be used for political expenditure’ or similar. A new subsection is inserted to provide that a reference to an amount received is a reference to the amount received excluding GST. 22—Amendment of section 130ZR—Annual returns relating to political expenditure The distinction in subsection (1)(b) between third parties and others is removed. Subsection (3) is deleted. A new subsection is inserted to provide that section 130ZR does not apply to a third party. 23—Amendment of section 130ZV—Audit certificates One amendment is consequential. The other is technical. 24—Insertion of section 130ZWA New section 130ZWA is inserted: 130ZWA—Registered political party to provide details of associated entities A requirement for a registered political party to provide the Electoral Commissioner with details of associated entities known to the party is inserted. 25—Amendment of section 130ZZB—Investigation etc Certain investigatory powers are expanded to extend to candidates and groups. Other technical amendments are also provided for. 26—Amendment of section 130ZZH—Regulations This amendment is technical. 27—Amendment of section 139—Regulations This amendment expands the power to make regulations of a savings or transitional nature to apply to any amendments to the Act or on the commencement of specified provisions of the Act (currently it only applies to Part 13A). Debate adjourned on motion of Hon. J.E. Hanson. At 16:27 the council adjourned until Tuesday 26 October 2021 at 14:15.