Justice Minister Kiri Allan confirmed on Thursday that the government would close the loophole by clarifying “that a party donation is when a person makes a donation to a political party or any other person with the intention that the donation is for the benefit of the party”.
The Minister’s statement said the High Court had determined ‘that a person receiving a donation must be involved in the ‘governance and supervision of the management of all Party affairs’ for it to be considered a ‘donation’ party “”.
“It paved the way for third parties not involved in the governance and management of a political party to receive donations for the benefit of the party without having to declare it.”
A new offense is also being created. Currently, anyone who receives a “candidate” or “party donation” must send it to the candidate or party secretary within 10 business days. But if they don’t, there is currently no violation of the law.
“The maximum fine a person is liable to under this new offense is $40,000. A full defense is available to any accused person if they can show they had a ‘reasonable excuse’ for non-compliance. It is consistent with the other offenses in the Act for Similar Conduct.”
The changes to the law will be made through the Election Amendment Bill, which is already pending in the House with the intention of bringing it into force before the 2023 election.
The bill will lower the threshold for public disclosure of donations and require parties to report donations under $1,000 not made anonymously and state the total amount of all donations received.
Allan said the changes should “remove any ambiguity about what a donation to a political party is supposed to be.”
“The change confirms the original intent of the bill to improve transparency and disclosure of political donations,” the minister said.
“Without this change, an opportunity may exist for political parties to structure their financial affairs in a way that allows them to legally avoid having to disclose their political donations.”
She asked the Justice Select Committee currently reviewing the bill to reopen submissions, allowing the public to make submissions on the other changes announced Thursday. The committee will report back by December 5.
Green Party spokesman for electoral reform Golriz Ghahraman said the change was a good first step, but more could be done.
“The law always protects donations from disclosure if they are first turned over to the electoral commission. When this happens, the commission is able to turn over the donations – regardless of the amount – anonymously to the political parties,” she said.
“My Strengthening Democracy Bill would fill this gap – and if the Government does not support it at first reading, we will seek to fill the remaining gaps by tabling an amendment to the Government Bill.”
She wants the disclosure threshold for donations to be lowered further and a cap to be set for annual donations.