Unlawful Political Donations

General information

Certain political donations are unlawful. If a person makes or accepts a political donation and is aware the donation is unlawful the person may have committed an offence and may be prosecuted by the NSWEC in a court. This includes individuals that accept donations on behalf of a political party, elected member, candidate, group or third-party campaigner.

If a person accepts an unlawful political donation the value of the donation (or double the value if the person knew the donation was unlawful) may be recovered by the NSWEC in a court as a debt due to the State of NSW.

Failure to record details

It is unlawful to accept a reportable political donation that is required to be disclosed to the NSWEC unless the person accepting the donation:

  • makes a record of the details required to be disclosed; and
  • provides a receipt for the donation (being a receipt that includes a statement advising the donor of their obligation to disclose making the donation).

This requirement does not apply to a donation that is not a reportable political donation at the time it is made.

More information about issuing a receipt and keeping records (See Record Keeping).

Anonymous donations

It is unlawful to accept a reportable political donation that is required to be disclosed to the NSWEC unless the person accepting the donation:

  • knows the name and address of the donor; and
  • when the donation is made the donor provides their name and address to the person receiving the donation and that person has no grounds to believe the donor's name and address are not true.

Identity of donors

It is unlawful for a person to accept a reportable political donation unless the donor is:

  • an individual enrolled for federal, state or local government elections, or
  • an entity with a relevant business number (Australian Business Number) or any other number recognised by the Australian Securities and Investments Commission.

If an individual donor is not enrolled, a political donation can be lawfully accepted if, prior to the donor making a donation, the donor made an application to the NSWEC to have their identification accepted and the NSWEC accepted that identification no more than six months before the donation was made.

If an entity donor does not have a business number, a political donation may be lawfully accepted if, prior to the donor making a donation, the donor made an application to the NSWEC to have their identification accepted and the NSWEC accepted that identification no more than six months before the donation was made.

To make an application to the NSWEC to have your identification accepted by the NSWEC, see Forms.

Certain Indirect Campaign Contributions

It is unlawful for a person to make any of the following indirect campaign contributions to a party, elected member, candidate or group where the value of the contribution exceeds $1,000, or the total value of all items provided by the same person to the same recipient in the same financial year exceeds $1,000:

  • the provision of office accommodation, vehicles, computers or other equipment for no consideration or inadequate consideration for use solely or substantially for election campaign purposes;
  • the full or part payment by a person other than the party, elected member, candidate or group, of electoral expenditure for advertising or other purposes incurred or to be incurred by the party, elected member, group or candidate (or an agreement to make such a payment); and
  • the waiving of all or part of a payment for advertising incurred or to be incurred by a party, elected member, group or candidate.

Electoral expenditure for advertising is incurred by a party, elected member, group or candidate if the advertising is authorised by the party, elected member, group or candidate.

An unlawful indirect campaign contribution does not include:

  • volunteer labour or the incidental use of vehicles or equipment of volunteers;
  • anything provided or done by a party for its endorsed candidates in accordance with arrangements made by the party agent of the party; and
  • a payment by the NSWEC  from the Election Campaigns Fund, Administration Fund or Policy Development Fund.

More than three third-party campaigners

It is unlawful to make or accept political donations to more than three third-party campaigners in the same financial year where the donations are to be paid into the third-party campaigners' campaign account.

Donations to independent candidates

It is unlawful for a party (or a candidate or elected member endorsed by a party) to make a political donation to a candidate or group of candidates not endorsed by that or any other party.

It is unlawful for an independent candidate to accept a donation from a party or an endorsed candidate or elected member.

Failure to record details of reportable loans

It is unlawful to accept a reportable loan that is required to be disclosed unless a record is made of:

  • the terms and conditions of the loan; and
  • the name and address of the lender.

This requirement does not apply where the lender is a financial institution.

Prohibited donors

It is unlawful for a prohibited donor to make a political donation. It is unlawful for a person to make a political donation on behalf of a prohibited donor.

It is unlawful for a person to accept a donation made by a prohibited donor or a person on behalf of a prohibited donor.

It is unlawful for a prohibited donor to solicit another person to make a political donation. It is unlawful for a person to solicit another person on behalf of a prohibited donor to make a political donation.

These requirements include those individuals and entities that make a reportable loan except where the lender is a financial institution.

These requirements do not include an annual or other subscription to a party by an individual who is a member of the party or for the individual's affiliation with the party except where the donation is a reportable political donation.

A prohibited donor is:

  • a property developer;
  • a tobacco industry business entity;
  • a liquor industry business entity;
  • a gambling industry business entity;
  • any industry representative organisation if the majority of its members are such prohibited donors; and
  • a close associate of a prohibited donor.

Property Developers

A 'property developer' is a corporation engaged in a business that regularly involves the making of relevant planning applications by or on behalf of the corporation in connection with the residential or commercial development of land, with the ultimate purpose of the sale or lease of the land for profit.

Tobacco business entities

A corporation engaged in a business undertaking that is mainly concerned with the manufacture or sale of tobacco products.

Liquor or gambling industry business entities

A corporation engaged in a business undertaking that is mainly concerned with either or a combination of the following, but only if it is for the ultimate purpose of making a profit:

  • the manufacture or sale of liquor products;
  • wagering, betting or other gambling (including the manufacture of machines used primarily for that purpose).

Close associate

A close associate of a prohibited donor is:

  • a director or officer of the corporation,
  • the spouse of such a director or officer,
  • a related body corporate of the corporation,
  • a person whose voting power in the corporation or a related body corporate of the corporation is greater than 20% or the spouse of such a person,
  • if the corporation or a related body corporate of the corporation is a stapled entity in relation to a stapled security – the other stapled entity in relation to that stapled security,
  • if the corporation is a trustee, manager or responsible entity in relation to a trust – a person who holds more than 20% of the units in the trust (in the case of a unit trust) or is a beneficiary of a trust (in the case of a discretionary trust).

Apply to be determined as not a prohibited donor

A person or entity may apply to the NSWEC to have a determination made that a person or entity is not a prohibited donor. The NSWEC can only make a determination solely on the basis of information provided by an applicant.

To make an application for determination, see Forms.

The NSWEC maintains a register of determinations. There are no current determinations.

Donations exceeding the donation caps

It is unlawful for a person to accept a political donation that exceeds the applicable donation cap.

It is not unlawful for a donation to be accepted that exceeds the applicable donation cap if the donation (or the part in excess of the cap) is paid into an account kept exclusively for federal campaigns.

This requirement does not apply to a third-party campaigner if the donation (or the part that exceeds the cap) is not paid into the third-party campaigner's campaign account.

This requirement does not apply to donations that are party subscriptions paid to a party except any amount that exceeds the maximum subscription. The maximum subscriptions are:

  • for membership of a party the maximum subscription allowed is $2,000 per member;
  • for affiliation with a party the maximum subscription allowed is:
    • $2,000 if the amount of the subscription is not based on the number of affiliate members, or
    • $2,000 multiplied by the number of affiliate members if the amount of the subscription is based on the number of affiliate members.

A party levy paid to a party by an elected member endorsed by the party, is not subject to the cap on political donations.