Types of political donations
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A gift to a politician, political party or other individuals or organisations involved in politics or elections in NSW may be a political donation.
For a brief overview of the types of political donations and the rules around making them, watch the video below. Find translated political donation video content in 24 community languages.
Political donations include:
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a monetary gift
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a non-monetary gift
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the provision of a service at no charge, or at a discounted rate
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a contribution, entry fee or other payment allowing a person to participate in, or benefit from, a fundraising venture or function where the amount paid is part of the proceeds
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annual or other subscriptions paid to a political party by a member of a party, or by a person or entity for affiliation with the party
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a disposition of property:
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to a NSW branch of a political party from the federal branch of the party
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to a NSW branch of a political party from another state or territory branch of the party
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from a political party to another political party
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uncharged interest on a loan i.e. the additional amount that would have been payable to a lender if the loan had been made on terms requiring the payment of interest at the generally prevailing interest rate for a loan of that kind, and the interest payable had not been waived, and any interest payments were not capitalised.
Political donations do not include:
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bequests
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public funding payments made by the NSW Electoral Commission to a political party, elected member or candidate
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a gift made solely for the purpose of a federal election or a member of the federal parliament, or an election outside of New South Wales, or an elected member outside of New South Wales.
The NSW Electoral Commission’s guidelines provide further examples of what is and is not a political donation (including information about interest rates for loans).
Spotlight on fundraisers
There are a number of important rules to understand about fundraising events and how your participation in one may constitute a political donation.
Small political donations
A small political donation is a political donation of less than $1,000. Small political donations made and received must be disclosed to the NSW Electoral Commission by:
political parties
elected members
groups of candidates
candidates
associated entities.
Political donors are not required to disclose donations valued at less than $1,000.
The person responsible for a party, elected member, candidate, group, third-party campaigner or associated entity is required to keep complete and accurate records of small political donations.
Aggregated donations
When aggregated, small donations may become reportable.
A reportable political donation includes multiple donations made by the same donor to the same recipient that in aggregate are valued at $1,000 or more in one financial year.
Political participants should take care to keep accurate records so they are able to determine whether they have made multiple small donations that, when aggregated, must be disclosed as reportable donations.
For example, members of political parties may find that their annual or other subscriptions for affiliation with the party, when added with other small donations made to the party, such as an entry fee for a fundraising venture held by the party, add up to $1,000 or more and must be disclosed as reportable donations.
Small donations of $100 or less do not have to be aggregated with other donations for disclosure purposes if it is the only donation made by a person at a fundraising venture or function.
Reportable political donations
A reportable political donation is a donation that is valued at $1,000 or more. A reportable political donation includes multiple donations made by the same donor to the same recipient that in aggregate are valued at $1,000 or more in one financial year.
Reportable political donations made and received must be disclosed to the NSW Electoral Commission by:
political parties
elected members
groups of candidates
candidates
associated entities.
Reportable political donations received by a third-party campaigner for the purpose of making payments for electoral expenditure incurred during the capped expenditure period for an election, must be disclosed to the NSW Electoral Commission.
A political donor (including a third-party campaigner) is required to disclose reportable political donations of $1,000 or more made to a political party, elected member, group, candidate, associated entity or third-party campaigner.
When a political donation is received by a political party, elected member, group of candidates, candidate, associated entity or third-party campaigner, a receipt must be issued to the political donor. For non-monetary donations, an acknowledgement is to be issued to the political donor.
Reportable loans
A reportable loan is a loan valued at $1,000 or more.
When a reportable loan is received by a political party, elected member, group of candidates, candidate or third-party campaigner, a record must be made of the terms and conditions of the loan and the name and address of the lender (except where the lender is a financial institution).
A loan is an advance of money, the provision of credit or any other transaction that is in effect a loan of money.
Separate loans made by a lender to the same recipient during a financial year are to be aggregated and treated as a single loan.
Where credit is provided by using a credit card, each transaction is a separate loan.
Unpaid accounts and invoices are also considered reportable loans if a supplier agrees to extend their standard payment period and/or payment terms.
Reportable loans, the terms of the loan and repayments made on the loan, must be disclosed to the NSW Electoral Commission by:
political parties
elected members
groups of candidates
candidates
associated entity
third-party campaigners.
Interest on a loan
Each calendar year the NSW Electoral Commission issues a guideline on the interest rate on loans. This rate is based on rates sets by the Reserve Bank of Australia. For more information, view the general guidelines.
If the interest charged on a loan is less than the prevailing interest rate (or if no interest is charged) the amount of uncharged interest is a political donation which must be disclosed.
For example, if the prevailing interest rate on a loan has been set at 10 per cent but only six per cent interest is charged by a lender, four per cent interest is uncharged and must be disclosed.