Changes to the foreign donations bill—good news for charities25 October 2018
On 19 September 2018, the Federal Government amended the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 in response to a report from the Joint Standing Committee. The report acknowledged the 102 submissions from the charity sector and recommended that the Commonwealth Government:
- clarify the term “political purpose”, and
- restrict the definition of “political expenditure” to refer only to the type of expenditure incurred to direct the public to vote in a specific way.
For more information about the initial wording proposed in the Bill and the implications for charities, see our article from 12 April 2018.
The good news for charities is that the amended Bill has replaced the term “political expenditure” with “electoral expenditure”, defined in the amended clause 287AB as “expenditure incurred for the dominant purpose of creating or communicating electoral matter”, indicating that expenditure on non-partisan issue-based advocacy will not be captured by the clause.
Furthermore, requiring the “dominant purpose” of the activity to relate to an electoral matter is significant for charities that advocate on policy issues that indirectly influence an electoral decision— such as healthcare, human rights, the environment or education.
Under the former wording of the Bill, many charities feared that activities relating to these issues would be deemed to have a “political purpose”, thereby rendering associated expenditure as “political expenditures”. The re-wording and qualification of the term “electoral expenditure” dispels these fears for charities that advocate on policy issues that do not aim to directly influence elections. These charities will no longer be required to disclose the identity of their donors or register as “political campaigners”.
The amendments have so far been met favourably by the sector, with spokespeople calling the changes “sensible”, “comprehensive” and “positive”. For the charities whose activities are still captured by the Bill, some concerns remain relating to the proposed registration and disclosure requirements regarding foreign investment—for example, the possibility that disclosure requirements might compel senior staff to disclose their political party membership.
These charities had the opportunity to raise these issues when the Parliamentary Joint Standing Committee accepted a second round of public submissions on the amended Bill. As part of this second round, the Australian Council of Social Service (ACOSS) raised their continuing issues with the Bill, with concerns that providing commentary on political parties or candidates regarding their policies would be captured under the definition of an “electoral matter”.
In addition, ACOSS requested that the requirements for senior staff’s political party membership be removed. Interestingly, the Association of Australian Medical Research Institutes requested in its submission that the Bill specifically outline how electoral expenditure costs should be calculated. We await the final Bill to determine if these concerns will be addressed.