Section17 Final 7/2/05 10:22 AM Page i FUNDING AND DISCLOSURE REPORT Election 2001 Section17 Final 7/2/05 10:22 AM Page ii © Commonwealth of Australia 2005 This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth, available from the Department of Communication, Information Technology and the Arts. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Intellectual Property Branch, Department of Communication, Information Technology and the Arts, GPO Box 2154, Canberra ACT 2601, or posted at w w w. d c i t a . g o v. a u / c c a . ISBN: 18770 3 2 9 9 9 Contact us: Funding and Disclosure Australian Electoral Commission West Block Offices Queen Victoria Te r r a c e Pa r kes ACT 2600 PO Box 61 7 2 Kingston ACT 2604 P h : (02) 6271 4552 F a x : (02) 6271 4555 Email: f a d @ a e c . g o v. a u Web: h t t p : / / w w w. a e c . g o v. a u / Section17 Final 7/2/05 10:22 AM Page iii C O N T E N T S INTRODUCTION 1 ELECTION FUNDING 2 FINANCIAL DISCLOSURE 5 COMPLIANCE REVIEW 1 5 PARTY REGISTRATION 1 7 LEGISLATIVE REVIEW 2 0 APPENDICES 21 Appendix 1 - 2001 Election Funding Pa y m e n t s 21 Appendix 2 - Registered Political Pa r t i e s 2 2 Appendix 3 - Donors and Third Pa r t i e s 2 3 Key abbreviations A E C Australian Electoral Commission J S C E M Parliamentary Joint Standing Committee on Electoral Matters The Ac t Commonwealth Electoral Act 191 8 Section17 Final 7/2/05 10:22 AM Page 1 I N T R O D U C T I O N This report on the operation of the election funding and financial disclosure provisions of Part XX of the Commonwealth Electoral Ac t 1 91 8 (the Act) is prepared for the purposes of subsection 17(2) of the Act in relation to the 2001 Federal election. This report adopts an approach different from the previous section 17 reports. Those reports identified issues arising from the operation of the legislation, and provided recommendations in respect of those issues. The revised approach is to more comprehensively report on the operation of Part XX and, in particular, the outcome of the funding and disclosure scheme over the election period. While issues will continue to be raised as appropriate, detailed recommendations for the further development of the scheme, and amendment of the legislation, will be separately made to the Parliamentary Joint Standing Committee on Electoral Matters (JSCEM), or in special reports under subsection 17(2B) of the Act. It is anticipated that this approach will enable more effective management and control of recommendations by the AEC and the JSCEM. Recommendations originally proposed for this report have been included in AEC submissions made to the JSCEM during 2004. In addition to reporting on the operation of the election funding and financial disclosure scheme, it also reports on the operation of the party registration arrangements established under Part XI of the Ac t . This is because of the close linkages between the party registration scheme and the funding and disclosure scheme as they pertain to the 2 0 01 election period. The performance of the AEC in its administration of the funding and disclosure scheme against performance indicators and targets set down in Portfolio Budget Statements and Portfolio Additional Estimates S t a t e m e n t s is separately reported to Parliament in AEC Annual Reports. Funding and Disclosure Report Election 2001 1 Section17 Final 7/2/05 10:22 AM Page 2 E L E C T I O N F U N D I N G The election funding scheme established under Part XX of the Ac t appropriates public moneys to help fund the election campaigns of parties and independent candidates. $38.6 million in election funding was paid to parties and candidates for the 2001 election. E l i g i b i l i t y Individual House of Representatives and Senate candidates receiving 4% or more of formal first preference votes in an electorate in a Federal election or by-election are entitled to public election funding. For Senate groups, the group as a whole must win at least 4% of formal first preference votes in their State or Territory in order to be eligible for public funding. Election funding is normally paid to the agent of a State or Te r r i t o r y branch of a party or parties that endorsed a candidate or Senate group. It is paid to the agent of the candidate or Senate group in the case of independent candidates or groups. A candidate who does not appoint an agent is deemed to be their own agent for these purposes. E n t i t l e m e n t The funding entitlement is calculated by multiplying the number of formal first preference votes received by a funding rate. This rate is reviewed each six months in line with increases in the consumer price index. For the period July-December 2001, and hence for the 2001 election, the rate was 179.026 cents per eligible vote. This compares to 162.210 cents per eligible vote at the 1998 election. Pa y m e n t Details of the 2001 election funding payments made are at Appendix 1. A total of $38 559 409.33 was paid in separate payments of $35.69 million and $2.9 million. This reflects the requirements of the Act that at least 95% of the funding entitlement is to be paid in the fourth week after polling day on the basis of votes counted as at the 20th day after polling day. The balance is paid when vote counting is finalised and verified, and the full entitlement is known. 2 Funding and Disclosure Report Election 2001 Section17 Final 7/2/05 10:22 AM Page 3 Figure 1 provides a summary of the growth of funding payments since the scheme was introduced in 1984. The significant increase in payments at the 1996 election reflected changes made to the base rate of payment by the Pa r l i a m e n t . FIGURE 1 – FUNDING PAYMENTS OVER TIME Figure 2 provides a summary of the allocation of election funding for the 2001 election. This highlights the proportion of funding going to the major parties, consistent with their proportion of the overall vote. FIGURE 2 – DISTRIBUTION OF ELECTION FUNDING Labor Pa r t y $ 1 4 , 91 7 , 0 2 4 . 5 7 Liberal Pa r t y $ 1 4 , 4 9 2 , 3 4 9 . 8 3 National Pa r t y $ 2 , 8 4 5 , 1 9 3 . 9 8 D e m o c r a t s $ 2 , 411 , 6 8 9 . 6 9 One Nation $ 1 , 70 9 , 7 5 2 . 0 0 G r e e n s $ 1 , 5 9 3 , 8 6 3 . 0 9 O t h e r s $ 5 8 9 , 5 3 6 . 1 7 To t a l $ 3 8 , 5 5 9 , 4 0 9 . 3 3 Funding and Disclosure Report Election 2001 3 Section17 Final 7/2/05 10:22 AM Page 4 Media re l e a s e s The AEC issued a Media Release when each payment was made. These attracted press coverage, some of a critical bent. In particular, there was comment about the party receiving the most election funding not being the party that won the election. There were also questions about the equity of a scheme that provides automatic entitlement regardless of expenditure incurred. R e d i rection of funding Parties and their branches may re-direct their funding entitlements pursuant to funding agreement arrangements advised to the AEC. In particular, the Australian Labor Party directed that all payments due to State or Territory branches be made to the National Secretariat. The Liberal and National Parties in NSW and Victoria, and the Labor and Country Labor Parties in NSW ran joint Senate tickets. Where requested, payments in respect of those Senate groups were divided between the parties on a basis agreed by the parties. 4 Funding and Disclosure Report Election 2001 Section17 Final 7/2/05 10:22 AM Page 5 F I N A N C I A L D I S C L O S U R E The financial disclosure scheme established under Part XX of the Ac t seeks to ensure that the public is aware of major sources of party and candidate funding of any possible influence. Annual re t u r n s The scheme requires annual returns to be lodged with the AEC by registered political parties, and by some parties who have not elected to register (e.g. because they are branches of a registered party). It also requires returns to be lodged by associated entities (organisations controlled by, or operating to a significant extent to the benefit of political parties), and by donors to political parties. Election re t u r n s The scheme also requires candidates, Senate groups, donors, third parties and the media to lodge election period returns. In this context, a third party is a person or organisation other than a registered political party, associated entity or a candidate who receives political donations, and/or incurs election expenditure.