Australia’s strictest election financing laws enacted in Queensland

The Queensland Parliament has enacted Australia’s strictest laws regulating political donations and electoral expenditure. The new laws will apply to State elections, but will not affect either Federal elections or local government elections.  

Whilst the new laws are likely to achieve the Queensland Government’s goal of a more transparent political system, they will significantly limit the ability of business to make political donations for Queensland state elections.

Donation limits

The Electoral and Other Legislation (Accountability, Integrity and Other Matters) Amendment Act 2020 (Qld) (Act) prohibits a person giving more than $10,000 over a four-year parliamentary term to registered political parties, their associated entities, and candidates. Of that $10,000, a person or organisation may only donate a maximum of $6,000 to candidates of the same party and $4,000 to any single political party or associated entity.

The Act prevents a party or candidate accepting a donation that exceeds the donation cap. To ease the burden on charities, not-for-profits[1] and regional organisations, there is no cap on donations to third parties.

The donation caps will commence on 1 July 2022, and will not apply to the upcoming state election in October 2020.

Limits on expenditure

Expenditure limits will apply during the final six months of a parliamentary term and in the month-long election period. During that time, the maximum amount that can be spent is:

• $58,000 for candidates endorsed by a political party;
  
  
• $87,000 for independent candidates;
  
  
• $92,000 in any single electorate for political parties; and
  
  
• $87,000 in any single electorate and $1 million overall for third-party organisations, including unions, political action groups, and industry bodies.

These caps will apply to the October election and operate retrospectively to include expenditure incurred from 30 March 2020.

In New South Wales, restrictions on expenditure by third parties have been struck down by the High Court as unconstitutional.[2]  The Queensland parliament has taken three measures to prevent the same fate.

First, as noted in a prior Insight, the Queensland regime allows third parties to spend approximately triple the amount set in New South Wales (as a proportion of permitted expenditure by parties).

Second, by only regulating expenditure over seven months rather than 12 months as initially proposed, the parliament has lessened the burden on political communication by third parties.  

Finally, the cap on third parties will only apply to expenditure with a ‘dominant campaign purpose’. In other words, it will only apply to expenditure for the purpose of promoting or opposing a party or candidate or otherwise influencing voting and will not apply to money spent “to educate or raise awareness about an issue of public policy” even if the expenditure was “also incurred for, or achieves, a campaign purpose”.  

Implications for business

The new laws significantly limit the ability of business to make donations in Queensland, regardless of where the donor is located. When the donation caps do come into effect, businesses will need to consider how they allocate their donations under the $10,000 cap to ensure they do not breach the new laws.  

Some aspects of the law await clarification. In particular, it is unclear how the Electoral Commission will determine whether a third party expenditure is for a campaign purpose exists and whether that purpose is ‘dominant’.

Based on previous challenges in both New South Wales and Queensland, there is the possibility of a constitutional challenge to the expenditure caps or other aspects of the new laws. However, the Queensland Government’s changes to the final legislation have addressed a significant number of the issues raised by commentators with the original draft.

Given the wide implications and scope of the new changes, businesses and other groups who participate in the electoral process may benefit from legal advice regarding their obligations under the new laws.

As a matter of good housekeeping, business will want to update their political donations policy in light of the new regime.