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2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
ELECTORAL LEGISLATION AMENDMENT
(FAIRER CONTRACTS AND GRANTS) BILL 2023
EXPLANATORY MEMORANDUM
(Circulated by the authority of Senator Waters)
ELECTORAL LEGISLATION AMENDMENT
(FAIRER CONTRACTS AND GRANTS) BILL 2023
OUTLINE
The Bill proposes amendments to the Commonwealth Electoral Act 1918 (the Act) that will
prevent political donations being made that could influence the outcome of contracts, tenders,
grants, approval, licence and permit processes.
The effect of the Bill is that corporations, or close associates of the corporation, will be
prevented from making a political donation above the disclosure threshold to a party of
government in the following circumstances:
• in the 12 months before applying for a grant of Commonwealth money, while the
application is being considered, or the 12 months after being notified of the outcome of
an application for a grant of Commonwealth money;
• in the 12 months before applying for an approval, licence or permit under a prescribed
law of the Commonwealth (including approvals of controlled actions under the
Environment Protection and Biodiversity Conservation Act 1999), while the application is
being considered, or within 12 months after being notified of the outcome of an
application for an approval, licence or permit; and
• in the 12 months before applying for a tender, while the application is being considered,
or within 12 months after being notified of the outcome of an application for a tender.
The purpose of the amendments is to strengthen the integrity of grants administration, tendering
and procurement processes, and assessment of lucrative projects and prevent donations from
influencing the allocation of government funds or securing project approvals.
These amendments will increase public confidence that decisions regarding allocation of
government resources are guided by the public interest, rather than the interests of donors. The
amendments seek to prevent donors from swaying decisions in their favour.
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NOTES ON CLAUSES
Clause 1 - Short title
Provides for the Act to be cited as the Electoral Legislation Amendment (Fairer Contracts and
Grants) Act 2023.
Clause 2 - Commencement
This clause provides for the whole Bill to commence on the day after it receives the Royal
Assent.
Clause 3 - Schedule(s)
This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act
specified in a Schedule to this Act is amended or repealed as is set out in the applicable items
in the Schedule. Any other item in a Schedule to this Act has effect according to its terms.
SCHEDULE 1 - AMENDMENTS
Item 1 - Subsection 120(2)
This item inserts section 302L into item 14 of the table in subsection 120(2) of the Act to allow
for internal review of decisions of the Electoral Commissioner related to anti-avoidance.
Item 2 - Section 302A
This item inserts a description of the changes being introduced by this Bill into the simplified
outline of Division 3A of Part XX of the Act.
This description explains that gifts to the political party in government, including to a coalition
partner, above the disclosure threshold are prohibited for any corporation or close associates of
the corporation 12 months after the corporation has made any application or entered into a
contract for Commonwealth money, or applied for certain approvals under a law of the
Commonwealth.
Applications for a Commonwealth grant, tender or approval are also prohibited for 12 months
after a corporation or close associates of the corporation has made a gift.
There is no change to the current disclosure threshold or timing of disclosures.
Item 3 - Section 302B
This item inserts a new definition of 'close associate' of a corporation.
The definition includes a related body corporate, a director or officer of the corporation and their
spouse, a person with more than 20% voting power in the corporation and their spouse, or a
lobbyist engaged to conduct lobbying activities on behalf of the corporation.
The definition is necessarily broad to achieve the objective of the Bill, to avoid donations being
made by close associates to circumvent the restrictions imposed by the Bill. Lobbying activities
are defined in the Lobbying Code of Conduct as communications with a government
representative in an effort to influence government decision-making, including the awarding of a
contract or grant.
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This item also inserts a number of additional definitions, adopting the meaning of terms used in
the Public Governance, Performance and Accountability Act 2013 and the Corporations Act
2001.
Item 4 - After Section 302B
This item inserts a new definition of a 'prohibited donor' and a 'prohibited gift recipient'.
The definition of a prohibited donor in new section 302BA includes a corporation or a close
associate of a corporation who has made a submission to a tender, is a party to a contract, has
submitted a grant application or has submitted an application for an approval, licence or permit.
A corporation or a close associate of a corporation becomes a prohibited donor:
● for contracts, the day the corporation becomes a party to the contract;
● for approvals, the day the application is submitted;
● for tenders, the day the submission is made; and
● for grants, the day the application is submitted.
A corporation or a close associate of a corporation ceases to be a prohibited donor:
● for approvals, licences or permits, 12 months from the day after being notified of the final
outcome in relation to the application;
● for unsuccessful tenderers, 12 months from the date on which they are notified that they
have not been successful;
● for successful tenderers, 12 months from the date on which they are notified that they
have been awarded the tender contract; and
● for grant applicants, 12 months from the day after they are notified of the outcome of the
application.
The definition of a prohibited gift recipient in new subsection 302BB(1) is a political party that is
in government at the time a gift is made. For the purposes of subsection (1), this includes
related political parties as defined in subsection (2).
Item 5 - Section 302C
This item inserts a new object and aims into section 302C of Division 3A of Part XX. This outline
how the Bill aims to achieve its objects to secure and promote integrity in the electoral process
by:
● prohibiting political donations by corporations and close associates of corporations for 12
months following an application for the award of Commonwealth money or for an
approval, licence or permit; and
● prohibiting the award of Commonwealth money or an approval, licence or permit to a
corporation for 12 months following a political donation.
Item 6 - After Subdivision B of Division 3A of Part XX
This item inserts new sections 302J, 302K and 302L into the Act.
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Section 302J relates to gifts made by prohibited donors. Subsection (1) sets out circumstances
relating to contravention, and subsection (2) outlines that the civil penalty a corporation or a
close associate of the corporation can be liable for contravening subsection (1) is the higher of
the following amounts:
● 200 penalty units;
● if there is sufficient evidence for the court to determine the amount or value, or an
estimate of the amount or value, of the gift at the time the gift is made--3 times that
amount or value.
Subsections 302J(3) to (5) provide that where an arrangement was awarded contrary to the
prohibitions outlined in the Bill, the arrangement will be void and the money paid to a
corporation may be recovered by the Commonwealth.
Section 302K relates to the prohibiting of an award of Commonwealth money after donation.
Section 302L relates to anti-avoidance measures.
Item 7 - Application of amendments
Item 7 clarifies that the amendments in this Schedule apply to gifts made on or after the
commencement of this Schedule.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Electoral Legislation Amendment (Fairer Contracts and Grants) Bill 2023
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act
2011.
Overview of the Bill
This Bill amends the Commonwealth Electoral Act 1918 (the Act) and related legislation to
secure and promote integrity in the electoral process by introducing a number of measures
including:
● prohibit political donations by corporations and close associates of corporations for
12 months following an application for the award of Commonwealth money or for an
approval, licence or permit;
● prohibit the award of Commonwealth money or an approval, licence or permit to a
corporation for 12 months following a political donation;
● make void arrangements that are granted contrary to the prohibitions outlined in the Bill;
● require Commonwealth money paid to a corporation where it was awarded contrary to
the prohibitions outlined in the Bill to be recovered by the Commonwealth; and
● apply a penalty to applicants who provide false or misleading information in their
application regarding any political donations made by the applicant.
Human rights implications
The amendments proposed in this Bill engage the following rights under the International
Covenant on Civil and Political Rights:
● the right to freedom of expression (Part III, Article 19, Section 2); and
● the right to take part in public life (Part III, Article 25).
The right to freedom of expression
Under Article 19 of the International Covenant on Civil and Political Rights, everyone has the
right to freedom of expression. This right includes the freedom to seek, receive and impart
information and ideas of all kinds, regardless of borders, whether orally, in writing or in print, by
way of art, or in another way a person chooses.
The Bill only constrains the ability of organisations to receive Commonwealth monies during the
same period as being a political donor. The right to donate to a political party is not equivalent to
the right to freedom of speech or political communication. Donors retain the right to campaign
publicly, to advertise, and to articulate their political views on any issues they wish - they are
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simply prohibited from being awarded Commonwealth monies during the same period as being
a political donor.
The limitations are reasonable, necessary and proportionate for the reasons set out above.
The right to take part in public life
Under Article 25 of the International Covenant on Civil and Political Rights, every citizen has the
right, and is to have the opportunity, to:
• take part in the conduct of public affairs, directly or through freely chosen
representatives;
• vote and to be elected at genuine periodic elections which shall be by universal and
equal suffrage and shall be held by secret ballot, guaranteeing the free expression of the
will of the electors; and
• have access, on general terms of equality, to public service in his [sic] country.
The Bill only restricts the ability of organisations to participate in political debate in one way - by
restricting their ability to receive Commonwealth monies during the same period as being a
political donor. Individuals will still be able to vote and corporations will still be able to publicly
engage in the debate in every way possible.
Prohibiting organisations from receiving Commonwealth monies during the same period as
being a political donor seeks to level the playing field and avoid those with more money gaining
unequal access to government.
The limitations are reasonable, necessary and proportionate for the reasons set out above.
Conclusion
This Bill is compatible with human rights because it advances equality in the protection of
freedom of expression.
Senator Waters
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