Unlawful political donations

Make sure your political donations comply with the law

Political parties, candidates and other individuals and organisations involved in politics or elections may ask for donations or other forms of support, particularly as a NSW election nears. 

If you’re asked to give support to a political participant, any donation you make must comply with New South Wales law.

Making certain political donations can be a criminal offence. The consequences may include being prosecuted in a court by the NSW Electoral Commission.

Here’s a quick look at some of the things you should know when making donations. 

Before you make a political donation, you must be: enrolled to vote or have an ABN or other recognised business number; or be approved by the NSW Electoral Commission to make political donations.

Certain industries, individuals and their close associates are banned from making political donations in NSW. Property developers, tobacco industry business entities and liquor and gambling industry business entities are prohibited donors. Registered clubs can also be prohibited donors.

Industry representative organisations are prohibited donors if the majority of their members are prohibited donors.

There are also limits to the total amount any political participant can accept from a donor in a financial year. These limits are known as ‘donation caps’ and they can be found on the NSW Electoral Commission website. 

Finally, if you’d like to make a donation of more than $100, you cannot do so with cash. You must donate electronically or by cheque, so your donation can be easily traced for auditing.

Ensure you know the rules and follow them by visiting elections dot n-s-w dot gov dot au.

It is unlawful for a person to make or accept a political donation in the form of cash over $100.

Political donations in the form of cash over $100 must be made electronically or by cheque.

This type of unlawful political donation is in effect from 1 January 2020.

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

• makes a record of the details required to be disclosed

• provides a receipt to the donor for the donation (being a receipt that includes a statement advising the donor of their obligation to disclose the donation).

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

For more information about issuing a receipt and keeping records, visit the Record keeping section. 

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

• knows the name and address of the donor

• 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.

There are strict rules in New South Wales about who can make political donations. To view the criteria, see the Political donors section.

A prospective donor can make an application to the NSW Electoral Commission to have their identification accepted and approved to make political donations. 

This does not apply to the acceptance of a political donation that is to be paid into (or held as an asset of) an account kept exclusively for the purposes of federal government election campaigns, or in the case of a third-party campaigner, the donation is not paid into the campaigner’s campaign account.

Indirect campaign contributions are the provision of certain types of support to election campaigns that have a monetary value but which are not necessarily also political donations (although they may be too).

Even if the support is not a “political donation”, these types of contributions are prohibited under certain circumstances and making or accepting an unlawful indirect campaign contribution can be a criminal offence.

The following indirect campaign contributions are prohibited unless their value falls below the relevant dollar threshold:

• the provision of free or discounted office accommodation, vehicles, computers or other equipment 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. 

Where an indirect campaign contribution is for the payment of electoral expenditure for advertising, the expenditure is taken to be incurred by a party, elected member, group or candidate if the advertising is authorised by the party, elected member, group or candidate.

It is unlawful for a person to make one or more indirect campaign contributions to the same party, elected member, group or candidate, where the total value of the contributions exceed the relevant threshold amount.

The threshold amounts for indirect campaign contributions are adjusted for inflation each financial year.

Indirect campaign contributions valued at or below the relevant threshold amount are not unlawful.

The prohibition on indirect campaign contributions also does not apply to:

• volunteer labour or the incidental use of vehicles or equipment of volunteers, where authorised by NSW Electoral Commission guidelines;

• 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 made to a party, elected member or candidate by the NSW Electoral Commission from the Election Campaigns Fund, Administration Fund or New Parties Fund.

The NSW Electoral Commission publishes guidelines for indirect campaign contributions. Guideline 13 is in relation to candidates and groups that do not pay their share of electoral expenditure that has been incurred on their behalf by another candidate or group. Guideline number 14 applies to the provision of volunteer labour and the ancillary use of vehicles or equipment of volunteers.

It is unlawful to make political donations to more than three third-party campaigners in the same financial year, and to accept these donations.

This only applies to political donations paid into the campaign accounts of the third-party campaigners.

It is unlawful for a party (or a candidate or elected member endorsed by a party, or an associated entity of 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 unendorsed candidate or candidates to accept a donation from a party or an endorsed candidate or elected member, or associated entity of a party.

It is unlawful to accept a reportable loan unless a record is made of:

• the terms and conditions of the loan

• the name and address of the lender.

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

It is unlawful for a:

• prohibited donor to make a political donation or loan

• person to make a political donation or loan on behalf of a prohibited donor

• person to accept a donation or loan made by a prohibited donor or a person on behalf of a prohibited donor

• prohibited donor to solicit another person to make a political donation or loan

• person to solicit another person on behalf of a prohibited donor to make a political donation or loan.

This does not apply to the following:

• loans, where the lender is a financial institution whose principal business is the provision of financial services or financial products, including authorised deposit-taking institutions
• an annual or other subscription paid to a party by an individual as a member of the party or for the individual’s affiliation with the party, unless the donation is a reportable political donation
• the making, acceptance or soliciting of a political donation, or the making of a gift to an individual for the purpose of the individual making a political donation, that is to be paid into (or held as an asset of) an account kept exclusively for the purposes of federal government election campaigns
• the making, acceptance or soliciting of a political donation, or the making of a gift to an individual for the purpose of the individual making a political donation, to a third-party campaigner that is not to be paid into (or held as an asset of) the campaign account of the third-party campaigner.

Examples of prohibited donors

A prohibited donor is:

• a property developer

• a tobacco industry business entity

• a liquor or gambling industry business entity, including a registered club if the business undertaken by the registered club includes wagering, betting or other gambling

• any industry representative organisation if the majority of its members are such prohibited donors 

• a close associate of a prohibited donor.

Property developers

A 'property developer' is an individual or corporation that:

• carries on a business mainly concerned with the residential or commercial development of land, with the ultimate purpose of its sale or lease of the land for profit, and

• in the course of that business:

  • one relevant planning application has been made by or on behalf of the individual or corporation that is pending

  • three or more relevant planning applications have been made by or on behalf of the individual or corporation and determined within the preceding seven years.

A person who is a close associate of a property developer is also a prohibited donor.

A relevant planning application has the same meaning as in section 10.4 of the Environmental Planning and Assessment Act 1979.

Tobacco business entities

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

A person who is a close associate of a tobacco industry business entity is also a prohibited donor.

Liquor or gambling industry business entities

A liquor or gambling industry business entity is 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).

A person who is a close associate of a liquor or gambling industry business entity is also prohibited from making political donations. 

A registered club (as defined by the Registered Clubs Act 1976) is prohibited from making a political donation if the business undertaken by the registered club includes wagering, betting, or other gambling.

The secretary of the registered club, a member of the governing body of the registered club, the spouse of the secretary or member of the governing body, and close associates of the registered club, are also prohibited from making political donations. 

It is a prohibited donation for a registered club to provide free or at a discount, with the use of their premises:

• any food or beverages
• use of staff or contractors
• use of IT or audio-visual facilities.

It is also a prohibited donation for a registered club to provide space for fundraising purposes or a campaign office if it is provided free of cost or at a discounted rate.

If any expenditure is paid for at the market value, it is permitted and is not a political donation made by the registered club.

Close associate

A close associate of a prohibited donor that is a corporation is:

• a director or officer of the corporation

• the spouse (including a de facto partner) of a director or officer of the corporation,

• 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 per cent or the spouse (including a de facto partner) 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 per cent 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)

• in relation to a corporation that is a property developer – a person in a joint venture or partnership with the property developer in connection with a relevant planning application made by or on behalf of the property developer who is likely to obtain a financial gain if that if development that would be or is authorised by the application is authorised or carried out.

A close associate of a prohibited donor that is an individual is:

• the spouse (including a de facto partner) of the individual, or

• in relation to an individual who is a property developer – a person in a joint venture or partnership with the property developer in connection with a relevant planning application made by or on behalf of the property developer who is likely to obtain a financial gain if development that would be or is authorised by the application is authorised or carried out.

Determination that a person is not a prohibited donor

A person or entity may apply to the NSW Electoral Commission to have a determination made that either they or another person or entity is not a prohibited donor.

The NSW Electoral Commission’s determination is:

• made solely on the basis of information provided by the applicant

• not assumed to be correct in favour of any person or entity that is aware the information provided by the applicant was incorrect

• remains in force for 12 months but can be revoked by the Electoral Commission at any time in writing.

The NSW Electoral Commission does not make a determination that a person or entity is a prohibited donor.

To make an application for a determination, see the Forms section.

Determinations made will be made available on the NSW Electoral Commission website. There are currently no determinations. 

It is unlawful for a person to accept a political donation to a party, elected member, group, candidate, third-party campaigner or associated entity if the donation exceeds the applicable cap on political donations.

There are a number of exemptions to the caps on political donations. A political donation is not unlawful if it is subject to one of the exemptions.