Political Donations

What is a political donation?

A political donation is a gift made to, or for the benefit of a:

  • political party;
  • member of Parliament;
  • local government councillor;
  • candidate;
  • group of candidates;
  • third-party campaigner; or
  • person or entity who uses the donation to make another political donation, or who incurs electoral expenditure, or who reimburses a person who incurred electoral expenditure

A gift is any disposition of property made by a person to another person (except as part of a will) made without consideration in money or money's worth or with inadequate consideration, and includes the provision of a service (other than volunteer labour).

Political donations must be disclosed to the NSWEC.

A political donation includes the following:

  • a monetary gift;
  • a non-monetary gift;
  • the provision of a service at no charge, or at a discounted rate;
  • a contribution, entry fee or other payment entitling a person to participate in, or benefit from, a fundraising event where the amount paid forms part of fundraising proceeds;
  • annual or other subscriptions paid to a political party by a member of a party or by a person or entity for affiliation with the party;
  • a disposition of property:
    • to a NSW party branch of a political party from the federal branch of the party,
    • to a NSW party branch of a political party from another State or Territory party branch of the party, and
    • from a political party to another associated party (e.g. common membership, coalition arrangement); and
  • uncharged interest on a loan i.e. the additional amount that would have been payable by a lender if the loan had been made on terms requiring the payment of interest at the generally prevailing interest rate for a loan of that kind, and the interest payable had not been waived, and any interest payments were not capitalised.

What is not a political donation?

  • a gift to an individual made in a private capacity for his or her personal use
  • bequests
  • public funding payments made by the NSWEC to a political party, elected member or candidate
  • a gift made solely for the purpose of a federal election or a member of the federal parliament, or an election outside of NSW, or an elected member outside of NSW

The NSWEC issues guidelines to give further examples of what is and is not a political donation (See General Guidelines)

Accepting and Using Political Donations

Political donations made to a political party must only be used for the objectives and activities of the party, including the administration of the party and community activities.

Political donations to a political party must not be used for the personal use of an individual acting in a private capacity.

Political donations may be accepted by any person authorised by the party to accept donations on behalf of the party. Details of political donations received by the party must be given to the party to enable proper records to be kept.

Political parties are required to keep complete and accurate records of all political donations made and received by the party (See Record Keeping).

Political donations can only be used:

  • to incur electoral expenditure; or
  • to reimburse a person for incurring electoral expenditure; or
  • for making a donation to another elected member, group of candidates or a candidate (other than a donation to those who are not endorsed by a political party).

Political donations cannot be accepted until the candidate or group of candidates is registered for the election with the NSWEC (See Registration) and the candidate or group has an official agent (See Agents).

Elected members are not required to be registered for an election prior to accepting political donations.

All political donations must be made to the official agent.

The official agent may appoint a person in writing to accept political donations and/or make payments for electoral expenditure from a campaign account (See Campaign Accounts).

Political donations made to a third-party campaigner must only be used to incur electoral communication expenditure or for other approved purposes.

Political donations cannot be accepted unless the third-party campaigner:

  • is registered for the election with the NSWEC;
  • has an official agent; and
  • the donations are made to the agent.

If a political donation is used to make payments for electoral communication expenditure the donation must first be paid into the campaign account by the official agent (See Campaign Accounts).

The official agent may appoint a person in writing to accept political donations and/or make payments for electoral communication expenditure from a campaign account (See Campaign Accounts).

Small Political Donations

A small political donation, or aggregate of small donations to the same recipient, is a donation that is valued at less than $1,000 in one financial year.

Small political donations must be disclosed to the NSWEC by:

  • political parties
  • elected members
  • groups of candidates
  • candidates
  • third-party campaigners

Political donors are not required to disclose donations valued less than $1,000. (See Disclosure)

Agents are required to keep complete and accurate records of small political donations (See Record Keeping).

Reportable Political Donations

A reportable political donation is a donation that is valued at $1,000 or more.

A reportable political donation includes multiple donations made by the same donor to the same recipient that in aggregate are valued at $1,000 or more in one financial year.

Reportable political donations must be disclosed to the NSWEC by:

  • political parties
  • elected members
  • groups of candidates
  • candidates
  • third-party campaigners
  • political donors

(See Disclosure)

When a political donation is received by a political party, elected member, group of candidates, candidate or third-party campaigner a receipt must be issued to the political donor. For non-monetary donations an acknowledgement slip is to be issued to the political donor (See Record Keeping).

Reportable loans

A reportable loan is an advance of money, the provision of credit or any other transaction valued at $1,000 or more.

When a reportable loan is received by a political party, elected member, group of candidates, candidate or third-party campaigner, a record must be made of the terms and conditions of the loan and the name and address of the lender (except where the lender is a financial institution).

A loan is an advance of money, the provision of credit or any other transaction that is in effect a loan of money.

Reportable loans must be disclosed to the NSWEC by:

  • political parties
  • elected members
  • groups of candidates
  • candidates
  • third-party campaigners

(See Disclosure)

Separate loans made by a lender to the same recipient during a financial year are to be aggregated and treated as a single loan.

Where credit is provided by using a credit card each transaction is a separate loan.

Unpaid accounts and invoices are also considered reportable loans if a supplier agrees to extend their standard payment period and/or payment terms.

Interest on a loan

Each calendar year the NSWEC sets a prevailing interest rate on loans. This rate is based on rates sets by the Reserve bank of Australia. The NSWEC issues a guideline each year to explain the prevailing interest rate that has been set for the year (See General Guidelines).

If the interest charged on a loan is less than the prevailing interest rate (or if no interest is charged) the amount of uncharged interest is a political donation which must be disclosed.

For example, if the prevailing interest rate on a loan has been set at 10 per cent but only 6 per cent interest is charged by a lender, 4 per cent interest is uncharged and must be disclosed.