NZ Govt - Electoral Finance Bill

8/14/2019 NZ Govt - Electoral Finance Bill

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Electoral Finance Bill

Government Bill

Explanatory Note

General policy statement

This Bill creates a stand-alone Act (the Electoral Finance Act) to provide moretransparency and accountability in the democratic process, prevent the undueinfluence of wealth, and promote participation in parliamentary democracy. TheBill draws together the provisions relating to electoral finance into onecomprehensive scheme. The Bill is designed to address problems identified bythe courts and others in order to maintain public and political confidence inthe administration of parliamentary elections, and the continued functioning ofour democracy. The Bill is an omnibus Bill as it significantly amends theElectoral Act 1993 and also amends the Broadcasting Act 1989. It is intendedthat the provisions of the Bill amending these 2 Acts will be divided into 2separate Acts at the committee of the whole House stage.

Background

In 1986 the Royal Commission on the Electoral System made severalrecommendations for amendments to electoral legislation to strengthen theelectoral finance regime in anticipation of Mixed Member Proportionalrepresentation (MMP). Recommendations included proposals on election spendingby political parties, candidates, and third parties. Some of the RoyalCommission's recommendations were adopted when the Electoral Act 1993 wasenacted. After 4 MMP elections further issues, including some of the RoyalCommission's unimplemented recommendations, have been identified as requiringlegislative attention.

Successive Justice and Electoral Committees, including the Committee that

reported on 8 September 2006, have also recommended a review of the electoralfinance regime.

The 2005 General Election brought concerns about the rules governing electoralfinance into sharper focus. Allegations were reported to the police aboutbreaches of electoral finance rules, including breaches of third partyadvertising rules and overspending on election broadcasts, but prosecutions didnot proceed. The Peters v Clarkson election petition, although not upheld incourt, raised questions about the interpretation of current law, for example,the treatment of dual-purpose advertisements.

For these reasons Cabinet agreed, in April 2006, to a targeted review of theelectoral finance regime, focusing on the electoral expense, advertising, and

broadcasting rules, including---

o a review of what an "election expense" is, what the limits should be, andhow expenses can be apportioned between parties and constituency candidates:

o whether third parties should be subject to election expense limits and therequirement to furnish returns:

o political donations:

o whether there is an alternative approach to the current regime, including


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the campaign funding of parties and constituency candidates, which would besimpler for parties, candidates, and administrators.

The policy objectives of the Bill are to---

o maintain public and political confidence in the administration of elections:

o promote participation in parliamentary democracy:

o prevent the undue influence of wealth:

o provide transparency and accountability to minimise the perception ofcorruption:

o contain rules that are effective and clear, and can be administered,complied with, and enforced efficiently:

o reflect our unique political culture and environment:

o promote participation in the electoral process by lessening the advantageheld by those with access to large financial resources.

To advance these objectives, the Bill amends the electoral finance regime inthe following areas---

o political donations:

o election expenses:

o third party advertising:

o compliance and enforcement.

The Bill also amends the broadcasting regime for election programmes.

Political donations

The Bill requires all registered parties, candidates, and third parties toappoint a financial agent to be responsible for accepting and reporting ondonations, and for incurring, paying, and reporting on election expenses. Thisamendment will ensure that there is a clear line of accountability forreceiving donations and incurring expenses.

The Bill extends the definition of donation to include the provision ofover-valued goods and services by a party, candidate, or third party, and moneylent to a party, candidate, or third party otherwise than on commercial terms.

Additional disclosure is required to the Electoral Commission if a partyreceives a single donation over $20,000 or a donation that, when aggregatedwith all previous donations known by the financial agent to have been made bythe same donor in the last 12 months, exceeds a multiple of $20,000. Theseamendments will improve the transparency and the accountability of the currentdisclosure regime, in order to provide voters with information about thesources of private financial support for political parties and candidates.

Election expenses

The Bill specifically defines election expenses for candidates, parties, and


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third parties.

The Bill provides for the apportionment of dual-purpose election activitiesbetween constituency candidates and parties based on coverage. This amendmentwill allow for the fair apportionment of expenses for dual purpose activities.

The definition of election activity is updated by the Bill to cover newtechnologies and media and will ensure that the definition covers electoral

advertising and promotion activities, regardless of the medium through whichthey are delivered.

References to "appearing to encourage or persuade" in the current definitionhave raised questions about the types of activities that are captured. Theamendment to specifically provide that an advertisement may constitute anelection activity even though it does not expressly mention of the name of aparty or candidate will afford additional clarity.

The Bill defines commercial value in relation to materials and advertisingspace to ensure that parties or candidates with existing trade relationshipscannot obtain unfair advantage. The meaning of materials is also amended by theBill to provide greater clarity.

The disclosure regime for election expenditure is strengthened by the Bill.These amendments will encourage compliance with the expenditure limits.

Third parties

The Bill creates a regime for additional regulation of third parties in NewZealand. Third parties are defined as persons and entities other thancandidates, parties, and financial agents of candidates or parties. The Billrequires third parties to---

o notify the Chief Electoral Officer of their involvement in election activityif they are going to incur election expenses over a threshold:

o file a return disclosing election expenditure relating to the third partyactivities:

o file a return disclosing all donations received over $500 in sum or value(inclusive of goods and services tax):

o pay to the Chief Electoral Officer any anonymous donation received thatexceeds $500 in sum or value (inclusive of goods and services tax):

o be subject to election expenditure limits.

The Bill defines, in relation to third parties, third party activity and

election expense. These definitions are necessary to set the parameters withinwhich the third party regime applies.

Third party election advertisements that are authorised by a candidate or aparty are included in both the third party expenditure limit and thecandidate's or party's expenditure limit. This will result in greatertransparency about total election expenditure and is the most effective way ofensuring that candidates, parties, and third parties cannot avoid theirexpenditure limits by acting in concert.

The additional regulation of third parties will---


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o provide more transparency:

o limit the potential for unlimited parallel election campaigns that underminethe objectives of expenditure limits for parties and candidates:

o ensure that election advertising by third parties cannot overwhelm thespeech of political parties and candidates:

o reduce the ability of third parties to attack a party that cannot respondbecause it has reached its spending limit.

Compliance and enforcement

The Bill strengthens the penalties for corrupt and illegal practices, includesa new penalty providing for payment to the Crown of the value of any financialbenefit derived from offending, and extends the time limits for prosecution inrespect of a number of offences. These amendments will encourage compliance,that will in turn enhance public confidence in the electoral system.

Broadcasting

The Bill removes the requirement for political representatives to be appointedto the Electoral Commission for the purpose of its jurisdiction under theBroadcasting Act 1989.

The Bill provides for a common start date (from writ day) for candidates andparties for the broadcast of election programmes and simplifies the process formaking complaints about election broadcasting. The common start date willeliminate the confusion that was associated with candidates and parties havingdifferent start dates for when election programmes may be broadcast.

Clause by clause analysis

Clause 1 relates to the Title of the Bill.

Clause 2 provides that the Bill comes into force on the day after the date onwhich it receives the Royal assent.

Part 1Preliminary provisions

Clause 3 sets out the purpose of the Bill.

Clause 4 is the interpretation clause. Key terms that are introduced intoelectoral law are candidate advertisement, election advertisement, financialagent, party advertisement, promoter, regulated period, and third party.

Clause 5 sets out the meaning of election advertisement.

Appointments

Clause 6 requires a candidate to appoint a financial agent to be responsiblefor administering the candidate's financial transactions in relation todonations and his or her election expenses. A candidate may appoint himself orherself as his or her own financial agent.

Clause 7 requires the secretary of a registered political party to appoint afinancial agent for the party to be responsible for administering the party's


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financial transactions in relation to donations and its election expenses. Aparty secretary may appoint himself or herself as the party's financial agent.

Clause 8 requires a third party to appoint a financial agent to be responsiblefor administering the third party's financial transactions for its promotion ofelection advertisements. If the third party is an individual, the third partymay appoint himself or herself as the third party's financial agent.

Clause 9 provides that a person is eligible to be appointed as a financialagent under clause 6, 7, or 8 only if the person is a registered electorresident in New Zealand, and has not been convicted of an offence of dishonestyor a corrupt practice.

Clause 10 requires a candidate to appoint an auditor if the candidate isrequired by clause 73 to obtain an auditor's report on his or her return ofelection expenses.

Clause 11 requires a registered party to appoint an auditor.

Clause 12 requires a third party to appoint an auditor if the third party isrequired by clause 112 to obtain an auditor's report on his or her or its

return of election expenses.

Clause 13 sets out a list of persons who cannot be appointed as an auditor fora candidate, a registered party, or a third party. A person cannot be appointedas an auditor if that person is a constituency or list candidate, an employeeor partner of a candidate, an officer or employee of a registered party orthird party, a body corporate, a person disqualified from acting as an auditorunder section 199(1) of the Companies Act 1993, a financial agent, or aReturning Officer.

Listing of third parties

Clause 14 lists persons eligible to be a third party. A registered elector, a

body corporate that is not an overseas person (within the meaning of theOverseas Investment Act 2005), and an unincorporated body all of whose membersare registered electors may be a third party. A constituency or list candidate,a party, and the financial agent of a candidate or party are ineligible to be athird party.

Clause 15 requires the Chief Electoral Officer to establish, maintain, andpublish a list of third parties.

Clause 16 provides that applications to be listed as a third party must be madeby a promoter to the Chief Electoral Officer and details the requirements ofapplications.

Clause 17 sets out the times when listing as a third party is prohibited.

Clause 18 sets out the grounds on which an application to be listed as a thirdparty must be refused.

Clause 19 sets out the responsibilities of the Chief Electoral Officer inrelation to the listing of, or refusal to list, a third party.

Clause 20 requires changes of third party particulars to be notified to theChief Electoral Officer.


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Clause 21 sets out when the Chief Electoral Officer must cancel the listing ofa third party.

Part 2Election campaigns

Subpart 1---General provisions relating to donations

Clause 22 defines terms used in subparts 1 to 4 of Part 2. These includeanonymous, candidate donation, party donation, third party donation, andspecified amount.

Clause 23 provides that all candidate donations, party donations, and thirdparty donations given or sent to any person must be transmitted to thefinancial agent of the candidate, party, or third party, as the case may be.

Clause 24 provides that where a person who is involved in the administration ofthe affairs of a candidate, party, or third party knows the name and address ofthe donor of an anonymous donation, that person must disclose the donor's nameand address to the financial agent of the candidate, party, or third party, asthe case may be.

Clause 25 creates an offence relating to contravention of clause 24.

Clause 26 requires every financial agent to keep proper records of alldonations that he or she receives. It is an offence to contravene thisrequirement without reasonable excuse.

Clause 27 provides that if the Chief Electoral Officer believes any person hascommitted an offence against subpart 2 or 4, he or she must report the factsupon which that belief is based to the New Zealand Police.

Clause 28 provides that if the Electoral Commission believes any person hascommitted an offence against subpart 3, it must report the facts upon which

that belief is based to the New Zealand Police.

Subpart 2---Disclosure of candidate donations

Clause 29 imposes an obligation on a financial agent for a candidate to filewith the Chief Electoral Officer, at the same time as filing a return ofelection expenses, a return of donations. The return must set out details ofall candidate donations received from the same donor that, taken eithersingularly or when aggregated, exceed $1,000 in sum or value (inclusive ofgoods and services tax), and details of all anonymous candidate donationsreceived that exceed $1,000 in sum or value (inclusive of goods and servicestax).

Clause 30 requires the provision of a nil return if the financial agentconsiders there is no relevant information to disclose under clause 29.

Clause 31 requires a financial agent to retain all records, documents, andaccounts that are necessary to enable a return of candidate donations to beverified. It is an offence to contravene this requirement without reasonableexcuse.

Clause 32 creates offences for the contravention of clause 29 relating to thereturn of candidate donations.


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Clause 33 requires the Chief Electoral Officer to send a copy of every returnof donations filed by a candidate's financial agent to the ElectoralCommission. The Chief Electoral Officer must make copies of the returnavailable for public inspection and may publish every return in any manner thathe or she considers appropriate.

Clause 34 prescribes the period for which the Chief Electoral Officer and theElectoral Commission must keep a return of candidate donations. On the expiry

of the prescribed period the Chief Electoral Officer and the ElectoralCommission must destroy the return.

Subpart 3---Disclosure of party donations

Clause 35 imposes an obligation on a financial agent for a party to file withthe Electoral Commission, by 30 April in each year, a return of party donationsfor the year ending with the immediately preceding December. The return mustset out details of every party donation received that, either on its own orwhen aggregated with all other donations made by the same donor during theyear, exceeds $10,000 in sum or value (inclusive of goods and services tax),and details of every anonymous party donation received that exceeds $10,000 insum or value (inclusive of goods and services tax).

Clause 36 requires a financial agent, before making the return required byclause 35, to obtain an auditor's report on the return.


Clause 38 requires a financial agent to file with the Electoral Commission areturn in respect of every party donation received from the same donor thatexceeds $20,000 or, when aggregated with all other donations received from thedonor in the previous 12 months, exceeds a multiple of $20,000.

Clause 39 requires a financial agent to retain all records, documents, and

accounts that are necessary to enable returns of party donations to beverified. It is an offence to contravene this requirement without reasonableexcuse.

Clause 40 creates offences for the contravention of clause 35 or 38 relating toreturns of party donations.

Clause 41 requires the Electoral Commission to make available for publicinspection every annual return of party donations and accompanying auditor'sreport filed under clause 35, and every return filed under clause 38. TheElectoral Commission may publish every return and report in any manner that itthinks appropriate.

Subpart 4---Disclosure of third party donations

Clause 42 provides that an anonymous third party donation may not exceed $500in sum or value (inclusive of goods and services tax). An anonymous donation inexcess of this amount must be paid to the Chief Electoral Officer (who must inturn pay the amount into a Crown Bank Account).

Clause 43 creates offences relating to anonymous third party donations.

Clause 44 provides that where a donor makes a third party donation thatincludes funds contributed by other persons who expect or require those funds


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to be applied as a donation, this must be disclosed at the time the donation ismade. Where a donor does not disclose, or is unable to disclose, in respect ofeach contributor whose contribution exceeds $500 the name and address of thecontributor and the amount of the contribution, then the donation must betreated as an anonymous third party donation.

Clause 45 provides that where a third party donation is given or sent to aperson (a transmitter) for forwarding to a financial agent, this must be

disclosed when the transmitter forwards the donation together with the name andaddress of the donor and any contributors. Where the transmitter does notdisclose, or is unable to disclose, the identity of the donor or anycontributor, then the donation must be treated as an anonymous third partydonation.

Clause 46 creates an offence relating to contravention of clause 45.

Clause 47 imposes an obligation on a financial agent for a third party to filewith the Chief Electoral Officer, at the same time as filing a return ofelection expenses, a return setting out details of every third party donationreceived that, either on its own or when aggregated with all other donationsmade by the same donor during the regulated period, exceeds $500 in sum or

value (inclusive of goods and services tax).


Clause 49 requires a financial agent to retain all records, documents, andaccounts that are necessary to enable a return of third party donations to beverified. It is an offence to contravene this requirement without reasonableexcuse.

Clause 50 creates offences for the contravention of clause 47 relating toreturns of third party donations.

Clause 51 requires the Chief Electoral Officer to send a copy of every returnof donations filed by a third party's financial agent to the ElectoralCommission. The Chief Electoral Officer must make copies of the returnavailable for public inspection and may publish every return in any manner thathe or she considers appropriate.

Clause 52 prescribes the period for which the Chief Electoral Officer and theElectoral Commission must keep a return of a third party's donations. On theexpiry of the period the Chief Electoral Officer and the Electoral Commissionmust destroy the return.

Subpart 5---General rules governingelection advertisements

Clause 53 provides that election advertisements may not be published in aregulated period unless certain conditions are met.

Clause 54 provides that it is an offence to avoid the financial limits set outin clause 53.

Clause 55 provides that an election advertisement that encourages or persuades,or appears to encourage or persuade, voters to vote for a party or candidatemust be authorised in writing by the financial agent of the party or thecandidate, as the case may be. An election advertisement that encourages or


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persuades, or appears to encourage or persuade, voters to vote for 2 or morecandidates must be authorised in writing by the financial agent of each of thecandidates or by the financial agent of the party to which the candidatesbelong. The election advertisement must state the name and address of thepromoter who has promoted the advertisement.

Clause 56 prohibits the making of payments for the exhibition of electionadvertisements. (This provision is based on section 219 of the Electoral Act

1993.)

Clause 57 exempts advertisements of a specified kind from prohibitions orrestrictions imposed by bylaws or enactments. (This provision is based onsection 221B of the Electoral Act 1993.)

Subpart 6---Candidates' election expenses

Clause 58 defines terms used in subpart 6 of Part 2. An important term iscandidate activity. This is defined as an activity, undertaken during aregulated period by, or with the authority of, the candidate or the candidate'sfinancial agent, that comprises the publication of a candidate advertisement inany form (for example, in the form of a radio or television broadcast, notice,

poster, pamphlet, billboard, or electronic message).

Clause 59 defines the term election expense for the purposes of subpart 6. Thisincludes, among other items, the preparation, design, composition, printing,distribution, postage, and publication of a candidate advertisement. Specifiedmatters, such as the cost of travel and the labour of any person that isprovided free of charge, are excluded.

Clause 60 provides that an election expense in relation to a candidate may beincurred only by that candidate's financial agent.

Clause 61 creates offences relating to the contravention of clause 60, and toagreements, arrangements, or understandings undertaken to avoid the

requirements of that clause.

Clause 62 prescribes the maximum amount of a candidate's election expenses inrespect of any regulated period. These amounts are the same as currently setout in the Electoral Act 1993.

Clause 63 provides for the apportionment of the election expense of an electionactivity undertaken both before and within the regulated period.

Clause 64 provides for the apportionment of the election expense of an electionactivity that comprises 2 or more candidate activities.

Clause 65 provides for the apportionment of the election expense of an election

activity that comprises both a candidate activity and a party activity.

Clause 66 provides that in certain circumstances the cost of a partyadvertisement is deemed to be an election expense of a candidate.

Clause 67 provides that if a candidate's election expenses exceed theprescribed limit, the candidate's financial agent, if the contravention isknown, is guilty of a corrupt practice, and is otherwise guilty of an illegalpractice unless the agent provides that he or she took all reasonable steps toensure that the prescribed limit was not exceeded.


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example, in the form of a radio or television broadcast, notice, poster,pamphlet, billboard, or electronic message).

Clause 81 defines the term election expense for the purposes of subpart 7. Thisincludes, among other items, the preparation, design, composition, printing,distribution, postage, and publication of a party advertisement. Specifiedmatters, such as the cost of travel and the labour of any person that isprovided free of charge, are excluded.

Clause 82 provides that an election expense in relation to a party may beincurred only by that party's financial agent.

Clause 83 creates offences relating to the contravention of clause 82, and toagreements, arrangements, or understandings undertaken to avoid therequirements of that clause.

Clause 84 prescribes the maximum amount of a party's election expenses inrespect of any regulated period. These amounts are the same as currently setout in the Electoral Act 1993.

Clause 85 provides for the apportionment of party activities that are

undertaken both before and during a regulated peirod.

Clause 86 provides that if a party's total election expenses exceed theprescribed limit, the party's financial agent, if the contravention is known,is guilty of a corrupt practice, and is otherwise guilty of an illegal practiceunless the agent provides that he or she took all reasonable steps to ensurethat the prescribed limit was not exceeded.

Clauses 87 to 90 re-enact sections 214BA to 214BD of the Electoral Act 1993.Clause 87 prescribes periods for claiming and paying an election expense of aparty.

Clause 88 prescribes the procedure to be followed where a claim is disputed.

Clause 89 gives a District Court power to grant leave to a party's financialagent to pay a disputed claim or a claim submitted after the permitted time formaking claims has expired.

Clause 90 provides that an election expense over $50 must be invoiced before itcan be paid.

Clause 91 requires a party's financial agent to file with the ElectoralCommission a return of election expenses. A return must be in the form suppliedby the Electoral Commission, be filed within 50 working days after thedeclaration made under section 193(5) of the Electoral Act 1993, and beaccompanied by an auditor's report obtained under section 92.

Clause 92 requires a party's financial agent to obtain an auditor's reportbefore filing the return required by clause 91.


Clause 94 creates offences for the contravention of clause 91 relating to aparty's return of election expenses.

Clause 95 requires a financial agent to retain all records, documents, and


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accounts that are necessary to enable a return of a party's election expensesto be verified. It is an offence to contravene the requirement withoutreasonable excuse.

Clause 96 provides that if the Electoral Commission believes any person hascommitted an offence against subpart 7, it must report the facts upon whichthat belief is based to the New Zealand Police.

Clause 97 requires the Electoral Commission to make every return of partyelection expenses and accompanying auditor's report available for publicinspection. The Electoral Commission may publish every return and report in anymanner that it considers appropriate.

Clause 98 prescribes the period that the Electoral Commission must keep areturn of a party's election expenses and accompanying auditor's report. On theexpiry of the prescribed period, the Electoral Commission must destroy thereturn and report.

Subpart 8---Third parties' election expenses

Clause 99 defines terms used in subpart 8 of Part 2. An important term is third

party activity. This is defined as an activity, undertaken during a regulatedperiod by, or with the authority of, a third party or the third party'sfinancial agent, that comprises the publication of an election advertisement inany form (for example, in the form of a radio or television broadcast, notice,poster, pamphlet, billboard, or electronic message).

Clause 100 defines the term election expense for the purposes of subpart 8.This includes, among other items, the preparation, design, composition,printing, distribution, postage, and publication of an election advertisement.Specified matters, such as the cost of travel and the labour of any person thatis provided free of charge, are excluded.

Clause 101 provides that an election expense in relation to a third party may

be incurred only by that third party's financial agent.

Clause 102 creates offences relating to the contravention of clause 101, and toagreements, arrangements, or understandings undertaken to avoid therequirements of that clause.

Clause 103 sets out the limits on the total advertising expenses of a thirdparty. The expenses in respect of any regulated period must not exceed $2,000(including goods and services tax) for advertisements that relate to acandidate in the candidate's capacity as a candidate for an electoral districtand must not, in any case, exceed $60,000 (including goods and services tax).

Clause 104 provides that if a third party's advertising expenses exceed the

prescribed limit, the third party's financial agent, if the contravention isknown, is guilty of a corrupt practice, and is otherwise guilty of an illegalpractice unless the agent provides that he or she took all reasonable steps toensure that the prescribed limit was not exceeded.

Clause 105 provides for the apportionment of election expenses for thepublication of an election advertisement both before and within the regulatedperiod.

Clause 106 requires certain advertising expenses to be attributed to both athird party and a party or candidate.


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Clause 107 prescribes periods for claiming and paying an election expense of athird party.

Clause 108 prescribes the procedure to be followed where a claim is disputed.

Clause 109 gives a District Court power to grant leave to a financial agent topay a disputed claim or a claim submitted after the permitted time for making

claims has expired.

Clause 110 provides that an election expense over $50 must be invoiced beforeit can be paid.

Clause 111 requires a third party's financial agent to file with the ChiefElectoral Officer a return of election expenses. A return must be in the formsupplied by the Chief Electoral Officer, be filed within 70 working days afterpolling day, and be accompanied by an auditor's report if required byclause 112.

Clause 112 requires a financial agent to obtain an auditor's report beforefiling the return required by clause 111 if the third party's total election

expenses exceed 25% of the maximum amount prescribed by clause 103(1)(b).


Clause 114 creates offences for the contravention of clause 111 relating to athird party's return of election expenses.

Clause 115 requires a financial agent to retain all records, documents, andaccounts that are necessary to enable a return of a third party's electionexpenses to be verified. It is an offence to contravene this requirementwithout reasonable excuse.

Clause 116 provides that if the Chief Electoral Officer believes any person hascommitted an offence against subpart 8, he or she must report the facts uponwhich that belief is based to the New Zealand Police.

Clause 117 requires the Chief Electoral Officer to send a copy of every returnof a third party's election expenses and any accompanying auditor's report tothe Electoral Commission. The Chief Electoral Officer must make copies of thereturn and any accompanying report available for public inspection and maypublish every return and report in any manner that he or she considersappropriate.

Clause 118 prescribes the period for which the Chief Electoral Officer andElectoral Commission must keep a return and any accompanying auditor's report

filed by a third party's financial agent. On the expiry of this period theChief Electoral Officer and the Electoral Commission must destroy the returnand report.

Part 3Miscellaneous

Subpart 1---General provisions and penalties

Clause 119 provides that where the financial agent of a candidate, party, orthird party commits an offence, the candidate, party, or third party is also


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liable in respect of the same offence if the candidate, party, or third partyauthorised the commission of the offence, or knew or could reasonably haveknown it was to be or was being committed and failed to take reasonable stepsto stop or prevent it.

Clause 120 provides that it is an offence to knowingly provide money for anillegal purpose or for election expenses incurred in excess of the maximumamounts prescribed in clauses 62, 84, and 103.

Clause 121 enables a search warrant to be issued under section 198 of theSummary Proceedings Act 1957, even though an illegal practice is not punishableby imprisonment.

Clause 122 sets out the time frames within which prosecutions under the variousoffence provisions must be commenced.

Clause 123 provides that a person charged with a corrupt practice may be foundguilty of an illegal practice.

Clause 124 provides that the penalty that may be imposed on conviction for acorrupt practice is a term of imprisonment not exceeding 1 year, or a fine, or

both. In the case of a financial agent or secretary, a fine may not exceed$40,000, and in the case of any other person a fine may not exceed $15,000.

Clause 125 provides that the penalty that may be imposed on conviction for anillegal practice is, in the case of a financial agent or secretary, a fine notexceeding $40,000 and, in the case of any other person, a fine not exceeding$10,000.

Clause 126 enables a court to order that any person convicted of an offenceunder this Act who has directly or indirectly benefited from the commission ofthe offence to pay to the Crown an amount equal to the value of the benefit.

Subpart 2---Regulations and transitional provisions

Clauses 127 and 128 relate to regulation-making powers dealing withadvertisements of a specified kind.

Clause 129 provides a general regulation-making power.

Clause 130 sets out transitional provisions dealing with the situation where anelection is underway before 1 March 2008. This Act does not apply and theprovisions of the Electoral Act 1993 continue in force.

Subpart 3---Consequential amendments

Clause 131 provides for the consequential amendment of the Citizens Initiated

Referenda Act 1993.

Subpart 4---Amendments to Broadcasting Act 1989

The amendments to the Broadcasting Act 1989 in clauses 132 to 137 provide for 2things. First, both candidates and parties are allowed to start broadcastingelection programmes from writ day. Currently, a candidate may broadcast anelection programme within the 3 months before polling day and a party maybroadcast an election programme from writ day.

Secondly, complaints about election broadcasting no longer need to be made to


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broadcasters in the first instance. Instead, they may be made directly to theBroadcasting Standards Authority.

Subpart 5---Amendments to Electoral Act 1993

The amendments to the Electoral Act 1993 (clauses 138 to 158) increase thepenalties for corrupt practices and illegal practices, insert a new power toobtain a search warrant in relation to suspected illegal practices, and make

related changes consequential to enactment of this Bill. The Electoral Act 1993is also amended to remove the requirement for 2 political representatives to bemembers of the Electoral Commission for the purposes of its jurisdiction underPart 6 of the Broadcasting Act 1989.

--------------------

Hon Mark Burton

Electoral Finance Bill

Government Bill

Contents

1 Title

2 Commencement

Part 1Preliminary provisions

3 Purpose

4 Interpretation

5 Meaning of election advertisement

Appointments

6 Appointment of financial agent for candidate

7 Appointment of financial agent for party

8 Appointment of financial agent for third party

9 Persons eligible to be appointed as financial agent

10 Appointment of auditor for candidate

11 Appointment of auditor for party

12 Appointment of auditor for third party

13 Persons eligible to be appointed as auditor


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14 Persons eligible to be third party

15 Chief Electoral Officer to establish, maintain, and publish list ofthird parties

16 Application to be listed as third party

17 Times when listing prohibited

18 Grounds on which listing must be refused

19 Listing of, or refusal to list, third party

20 Changes to be notified to Chief Electoral Officer

21 Cancellation of listing



22 Interpretation

23 Donations to be transmitted to financial agent

24 Disclosure of identity of donor

25 Offence relating to contravention of section 24

26 Records of donations

27 Duty of Chief Electoral Officer

28 Duty of Electoral Commission


29 Return of candidate donations

30 Nil return

31 Obligation to retain records necessary to verify return of candidatedonations

32 Offences relating to return of candidate donations

33 Return of candidate donations to be available for public inspection

34 Return of candidate donations to be kept for certain period


35 Annual return of party donations

36 Auditor's report on annual return of party donations


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37 Nil return

38 Return of party donation received from same donor exceeding $20,000

39 Obligation to retain records necessary to verify returns of partydonations

40 Offences relating to returns of party donations

41 Return of party donations to be available for public inspection


42 Anonymous third party donation

43 Offence in relation to anonymous third party donation

44 Contributors to be identified, if known

45 Identity of donor to be disclosed by transmitter, if known


47 Return of third party donations

48 Nil return

49 Obligation to retain records necessary to verify return of third partydonations

50 Offences relating to return of third party donations

51 Return of third party donations to be available for public inspection

52 Return of third party donations to be kept for certain period

Subpart 5---General rules governing election advertisements

53 Election advertisements not to be published in regulated period unlesscertain conditions met

54 Offence to avoid limits set out in section 53

55 Requirements for election advertisements that promote parties orcandidates

56 Payments for exhibition of election advertisements57 Display of advertisement of a specified kind

Subpart 6---Candidates' election expenses

58 Interpretation

59 Meaning of election expense

60 Election expense to be incurred by candidate's financial agent


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61 Offence to incur unauthorised election expense

62 Maximum amount of candidate's total election expenses

63 Apportionment of election expense for candidate activity undertaken bothbefore and within regulated period

64 Apportionment of election expense of election activity between candidates

65 Apportionment of election expense of election activity between candidateand party

66 Cost of party activity deemed to be election expense of candidate inparticular case

67 Offences in relation to candidate's total election expenses

68 Periods for claiming and paying candidate's election expenses

69 Procedure where claim disputed

70 Leave to pay claim after time limitation

71 Election expense to be invoiced

72 Return of candidate's election expenses

73 Auditor's report on return of candidate's election expenses exceeding75% of maximum amount

74 Nil return

75 Offences relating to return of candidate's election expenses

76 Obligation to retain records necessary to verify return of candidate'selection expenses


78 Return of candidate's election expenses to be available for publicinspection

79 Return of candidate's election expenses to be kept for certain period

Subpart 7---Parties' election expenses

80 Interpretation


82 Election expense to be incurred by party's financial agent


84 Maximum amount of party's total election expenses

85 Apportionment of election expense for party activity undertaken both


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before and within regulated period

86 Offences in relation to party's total election expenses

87 Periods for claiming and paying party's election expenses

88 Procedure where claim disputed



91 Return of party's election expenses

92 Auditor's report on return of party's election expenses

93 Nil return

94 Offences relating to return of party's election expenses

95 Obligation to retain records necessary to verify return of party's

election expenses


97 Return of party's election expenses to be available for public inspection

98 Return of party's election expenses to be kept for certain period

Subpart 8---Third parties' election expenses

99 Interpretation


101 Election expense to be incurred by third party's financial agent


103 Maximum amount of third party's total election expenses

104 Offences in relation to third party's total election expenses

105 Apportionment of election expense for third party activity undertakenboth before and within regulated period

106 Election expenses attributed in respect of advertisements authorised by

candidate or party

107 Periods for claiming and paying third party's election expenses

108 Procedure if claim disputed



111 Return of third party's election expenses


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112 Auditor's report on return of third party's election expenses

113 Nil return

114 Offences relating to return of third party's election expenses

115 Obligation to retain records necessary to verify return of third party's

election expenses


117 Return of third party's election expenses to be available for publicinspection

118 Return of third party's election expenses to be kept for certain period

Part 3Miscellaneous

Subpart 1---General provisions and penalties

119 Liability of candidates, party secretaries, and third parties

120 Providing money for illegal purposes

121 Power to issue search warrants in respect of illegal practice

122 Time limit for prosecution

123 Persons charged with corrupt practice may be found guilty of illegalpractice

124 Punishment for corrupt practice

125 Punishment for illegal practice

126 Additional penalty

Subpart 2---Regulations and transitional provisions

127 Regulations relating to advertisement of a specified kind

128 Requirements before Minister can recommend that regulations be made

129 General regulations

130 Transitional provisions

Subpart 3---Consequential amendments

131 Consequential amendments

Subpart 4---Amendments to Broadcasting Act 1989

132 Principal Act amended

133 Interpretation


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134 Right of complainant to refer formal complaint to Authority

135 New section 9 substituted

9 Time limits

136 Functions of Authority

137 Prohibition on paid election programmes

Subpart 5---Amendments to Electoral Act 1993

138 Principal Act amended

139 Interpretation

140 Electoral Commission

141 Functions

142 Membership

143 Term of office

144 Vacation of office of additional members who hold office for purposes ofjurisdiction under Part 6 of Broadcasting Act 1989

145 Appointment of deputies

146 Chief Electoral Officer

147 Application for registration

148 Registration

149 Deposit by party secretary

150 Deposit by candidate

151 Deposit payable in respect of bulk nomination schedule

152 Interfering with or influencing voters

153 Repeals

154 Electoral advertisements

155 Providing money for illegal purposes

156 Punishment for corrupt or illegal practice

157 New section 226A inserted

226A Power to issue search warrants in respect of illegal practice

158 Schedule 1 amended


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ScheduleConsequential amendments

--------------------

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Electoral Finance Act 2007.

2 Commencement

This Act comes into force on the day after the date on which it receives theRoyal assent.

Part 1

Preliminary provisions

3 Purpose

The purpose of this Act is to strengthen the law governing electoral financingand broadcasting, in order to---

(a) maintain public and political confidence in the administration ofelections; and

(b) promote participation by the public in parliamentary democracy; and

(c) prevent the undue influence of wealth on electoral outcomes; and

(d) provide greater transparency and accountability on the part ofcandidates, parties, and other persons engaged in election activities in orderto minimise the perception of corruption; and

(e) ensure that the controls on the conduct of electoral campaigns---

(i) are effective; and

(ii) are clear; and

(iii) can be efficiently administered, complied with, and enforced.

4 Interpretation

(1) In this Act, unless the context otherwise requires,---

address means,---

(a) in relation to an individual, the full address of the place wherethat person usually lives:

(b) in relation to a body corporate or unincorporated, the full address


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of its principal place of business or head office

candidate means a constituency candidate, and a person who becomes acandidate is deemed to be a candidate on and from the beginning of theregulated period

candidate advertisement means any form of words or graphics that canreasonably be regarded as encouraging or persuading voters to do either or both

of the following:

(a) to vote for a candidate in the candidate's capacity as a candidatefor an electoral district (whether or not the name of the candidate is stated):

(b) not to vote for another candidate (whether or not the name of thecandidate is stated)

corrupt practice means any act declared by this Act to be a corrupt practice

donation means a donation of money or of the equivalent of money or of goodsor services, or a combination of any or all of those things

donor means a person who makes a donation

election advertisement has the meaning given to it by section 5

financial agent,---

(a) in subpart 1 of Part 2, means a financial agent appointed undersection 6, 7, or 8:

(b) in subparts 2 and 6 of Part 2, means a financial agent appointedunder section 6:

(c) in subparts 3 and 7 of Part 2, means a financial agent appointed

under section 7:

(d) in subparts 4 and 8 of Part 2, means a financial agent appointedunder section 8

illegal practice means any act declared by this Act to be an illegalpractice

party means a political party registered under Part 4 of the Electoral Act1993

party advertisement means any form of words or graphics that can reasonablybe regarded as encouraging or persuading voters to do either or both of the

following:

(a) to vote for the party (whether or not the name of the party isstated):

(b) not to vote for another party (whether or not the name of the partyis stated)

promoter---

(a) means a person on whose initiative an election advertisement is


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published; and

(b) includes, without limitation, a person---

(i) who enters into a contract, arrangement, or understandingwith another person to the effect that the other person publish an electionadvertisement; or

(ii) who publishes an election advertisement in the absence ofsuch a contract, arrangement, or understanding

publication, in relation to an advertisement, means to---

(a) insert in a newspaper or other periodical published or distributedin New Zealand; or

(b) issue, hand out, or display; or

(c) send to any member of the public by any means; or

(d) deliver to any member of the public, or leave at a place owned or

occupied by a member of the public; or

(e) broadcast; or

(f) include in a film or video; or

(g) disseminate by means of the Internet or any other electronic medium;or

(h) store electronically in a way that is accessible to the public

registered elector means a person registered as an elector of an electoraldistrict

regulated period means---

(a) where a general election is held in the year in which Parliament isdue to expire, whichever is the longer of the following periods:

(i) the period that commences on 1 January of that year and endswith the close of polling day; or

(ii) the period that commences 3 months before polling day andends with the close of polling day:

(b) subject to subsection (2), where a general election is held in any

other year on the dissolution of Parliament, the period that commences 3 monthsbefore polling day and ends with the close of polling day

statutory declaration means a declaration made before a person authorisedunder the Oaths and Declarations Act 1957 to take declarations

third party means a promoter for the time being listed as a third partyunder section 19.

(2) Where a general election is held in a year other than a year in whichParliament is due to expire, regulated period, in sections 20, 47, and 53


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(which affect third parties), and subpart 8 of Part 2 (which relates to thirdparties' election expenses), means the period that---

(a) commences---

(i) if the Prime Minister tables a statement in the House ofRepresentatives stating that a general election is to be held in that year, onthe later of the following days:

(A) the day after the date on which the statement is tabled:

(B) the day that is 3 months before polling day; and

(ii) in any other case, on the day after the day on whichParliament is dissolved; and

(b) ends with the close of polling day.

(3) Unless the context otherwise requires, terms and expressions used andnot defined in this Act, but defined in the Electoral Act 1993, have the samemeaning as in that Act.

5 Meaning of election advertisement

(1) In this Act, election advertisement---

(a) means any form of words or graphics, or both, that can reasonably beregarded as doing 1 or more of the following:

(i) encouraging or persuading voters to vote, or not to vote, for1 or more specified parties or for 1 or more candidates or for any combinationof such parties and candidates:

(ii) encouraging or persuading voters to vote, or not to vote, fora type of party or for a type of candidate that is described or indicated byreference to views, positions, or policies that are or are not held, taken, orpursued (whether or not the name of a party or the name of a candidate isstated):

(iii) taking a position on a proposition with which 1 or moreparties or 1 or more candidates is associated; and

(b) includes---

(i) a candidate advertisement; and

(ii) a party advertisement.

(2) The following publications are not election advertisements:

(a) an advertisement that is published by the Chief Electoral Officer,the Chief Registrar of Electors, the Electoral Commission, or any other agencycharged with responsibilities in relation to the conduct of any officialpublicity or information campaign to be conducted on behalf of the Governmentof New Zealand and relating to electoral matters or the conduct of any generalelection or by-election and which either contains a statement indicating thatthe advertisement has been authorised by that officer or agency, or contains a


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symbol indicating that the advertisement has been authorised by that officer oragency:

(b) an advertisement within the meaning of section 43(1) of the CitizensInitiated Referenda Act 1993:

(c) any content of a newspaper or periodical that has been selected by,or with the authority of, the editor of the newspaper or periodical solely for

the purpose of informing or entertaining its readership:

(d) any content of a radio or television programme that has beenselected by, or with the authority of, a broadcaster (within the meaning of theBroadcasting Act 1989) solely for the purpose of informing or entertaining itsaudience:

(e) a book that is sold for no less than its commercial value, if thebook was planned to be made available to the public regardless of any election:

(f) a document published directly by a body corporate or unincorporatedto its members:

(g) the publication by an individual, on a non-commercial basis, on theInternet of his or her personal political views (being the kind of publicationcommonly known as a blog).

Appointments

6 Appointment of financial agent for candidate

(1) A candidate must appoint a financial agent to be responsible foradministering the candidate's financial transactions in relation to donationsand his or her election expenses.

(2) A candidate may appoint himself or herself under subsection (1).

(3) After appointing a financial agent, the candidate must send to the ChiefElectoral Officer---

(a) the name and address of the financial agent; and

(b) the financial agent's signed consent to the appointment.

(4) If at any time a candidate appoints a new financial agent, the candidatemust---

(a) notify the Chief Electoral Officer; and

(b) send to the Chief Electoral Officer---

(i) the name and address of the new financial agent; and

(ii) the new financial agent's signed consent to the appointment.

7 Appointment of financial agent for party

(1) The secretary of a party must appoint a financial agent for the party to


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be responsible for administering the party's financial transactions in relationto donations and its election expenses.

(2) A secretary may appoint himself or herself under subsection (1).

(3) On the registration of a party under section 67 of the Electoral Act1993, the person named, under section 63(2)(c)(viii) of that Act, as theparty's financial agent in the application for registration is to be taken to

have been appointed under subsection (1).

(4) If at any time a secretary appoints a new financial agent, the secretarymust---

(a) notify the Electoral Commission; and

(b) send to the Electoral Commission---



8 Appointment of financial agent for third party

(1) A third party must appoint a financial agent to be responsible foradministering the third party's financial transactions for its promotion ofelection advertisements.

(2) If the third party is an individual, the third party may appoint himselfor herself under subsection (1).

(3) On the listing of a third party under section 19, the person named,under section 16(2)(d), as the third party's financial agent in the applicationfor the listing is to be taken to have been appointed under subsection (1).

(4) If at any time a third party appoints a new financial agent, the thirdparty must---

(a) notify the Chief Electoral Officer; and

(b) send to the Chief Electoral Officer---



9 Persons eligible to be appointed as financial agent

A person is eligible to be appointed as a financial agent under section 6, 7,or 8 if the person---

(a) is a registered elector; and

(b) is resident in New Zealand; and

(c) has not been convicted of---


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(i) a crime involving dishonesty (within the meaning of section2(1) of the Crimes Act 1961); or

(ii) a corrupt practice under this Act or the Electoral Act 1993.

10 Appointment of auditor for candidate

(1) A candidate must appoint an auditor if the candidate is required bysection 73 to obtain an auditor's report on his or her return of electionexpenses.

(2) A candidate must without delay appoint another auditor if an auditorappointed by the candidate under subsection (1)---

(a) does not for any reason commence to hold office; or

(b) ceases to hold office; or

(c) becomes ineligible to hold office.

11 Appointment of auditor for party

(1) A party must appoint an auditor.

(2) On the registration of a party under section 67 of the Electoral Act1993, the person named, under section 63(2)(c)(v) of that Act, as the party'sauditor in the application for the registration is to be taken to have beenappointed under subsection (1).

(3) A party must without delay appoint another auditor if the auditorappointed by the party under subsection (1), or taken to have been appointedunder subsection (2),---




12 Appointment of auditor for third party

(1) A third party must appoint an auditor if the third party is required bysection 112 to obtain an auditor's report on his, her, or its return ofelection expenses.

(2) A third party must without delay appoint another auditor if the auditorappointed by the third party under subsection (1)---





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13 Persons eligible to be appointed as auditor

A person is eligible to be appointed as an auditor under section 10, 11, or 12if that person is not---

(a) a candidate; or

(b) a person whose name is specified in a party list submitted under

section 127 of the Electoral Act 1993; or

(c) an employee or partner of a candidate or a person referred to inparagraph (b); or

(d) an officer or employee of a party or third party; or

(e) a body corporate; or

(f) a person who, by virtue of section 199(1) of the Companies Act 1993,may not be appointed to act as an auditor of a company; or

(g) a financial agent appointed under section 6, 7, or 8; or

(h) a Returning Officer.


14 Persons eligible to be third party

(1) A person is eligible to be a third party if the person is---

(a) a registered elector; or

(b) a body corporate that is not an overseas person within the meaning

of the Overseas Investment Act 2005; or

(c) an unincorporated body all of whose members are registered electors.

(2) The following are ineligible to be a third party:

(a) a party:

(b) a candidate:

(c) a person whose name is specified in a party list submitted undersection 127 of the Electoral Act 1993:

(d) the financial agent of a party or a candidate.

15 Chief Electoral Officer to establish, maintain, and publish list ofthird parties

(1) The Chief Electoral Officer must establish and maintain a list thatcontains the names of the third parties listed under section 19.

(2) The Chief Electoral Officer must publish the list in any manner that theChief Electoral Officer considers appropriate.


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16 Application to be listed as third party

(1) An application by a promoter to be listed as a third party may be madeto the Chief Electoral Officer---

(a) if the promoter is an individual, by that individual; or

(b) if the promoter is a body corporate, by a person who is dulyauthorised by the board or other governing body of the body corporate to makethe application; or

(c) if the promoter is an unincorporated body, by the representative ofthe body who is, or appears to be, authorised by the body for the purpose.

(2) An application to be listed as a third party must---

(a) be in writing; and

(b) be signed by the promoter; and

(c) set out the name, address, and contact details of the promoter; and

(d) set out the name, address, and contact details of the individual,being an individual who is eligible for appointment under section 9, who is tobe appointed as the financial agent of the third party, and be accompanied bythat person's signed consent to the appointment.

17 Times when listing prohibited

When an election is to be held, the Chief Electoral Officer may not list apromoter in the period that---

(a) commences,---

(i) in the case of a general election that is held in a year inwhich Parliament is due to expire, on writ day:

(ii) in the case of any other election, on the 14th day beforepolling day; and

(b) ends with the day appointed as the latest day for the return of thewrit.

18 Grounds on which listing must be refused

(1) The Chief Electoral Officer must refuse an application by a promoter tobe listed as a third party if---

(a) the application does not comply with section 16; or

(b) the Chief Electoral Officer is not satisfied, on the basis of theapplication, that the applicant is eligible to be listed as a third party; or

(c) the name of the promoter is---


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(i) offensive; or

(ii) likely to cause confusion or mislead electors.

(2) Unless section 17 or subsection (1) applies, the Chief Electoral Officermust list the promoter as a third party.

19 Listing of, or refusal to list, third party

(1) If the Chief Electoral Officer determines that a promoter should belisted as a third party, the Chief Electoral Officer must---

(a) list the promoter as a third party; and

(b) give written notice to the third party of the listing.

(2) If the Chief Electoral Officer determines that an application for thelisting of a promoter as a third party should be refused, the Chief ElectoralOfficer must, as soon as is reasonably practicable, and in any case not later

than 10 working days after the date of the determination, give the promoterwritten notice that the Chief Electoral Officer has refused the application,and set out the reasons for the refusal.

20 Changes to be notified to Chief Electoral Officer

(1) If there is a change in any of the particulars given for a third partyunder section 16(2)(c) or (d), the financial agent of the third party mustpromptly notify the Chief Electoral Officer of the change.

(2) Every financial agent of a third party that is listed as at the firstday of any regulated period must, within 20 working days of that date, give the

Chief Electoral Officer a written notice that---

(a) confirms that the particulars of the third party recorded in theChief Electoral Officer's list are still correct; or

(b) corrects the particulars that are incorrect.

21 Cancellation of listing

(1) The Chief Electoral Officer must cancel the listing of a third partyif---

(a) the third party's financial agent, or a person duly authorised bythe third party's board or other governing body, or the representative of anunincorporated third party, or the third party himself or herself (if anindividual) requests the Chief Electoral Officer to do so; or

(b) the Chief Electoral Officer is satisfied that---

(i) the third party is not eligible to be listed; or

(ii) the third party does not have a financial agent; or


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(iii) the Chief Electoral Officer has not received the writtenconfirmation that the Chief Electoral Officer should have received undersection 20(2).

(2) If the Chief Electoral Officer cancels the listing of a third partyunder subsection (1)(b), the Chief Electoral Officer must, as soon as isreasonably practicable, and in any case not later than 10 working days afterthe date of the cancellation, give the financial agent or the third party

written notice that the Chief Electoral Officer has cancelled the listing, andset out the reasons for the cancellation.



22 Interpretation

(1) In this subpart, unless the context otherwise requires, donation means---

(a) a candidate donation; or

(b) a party donation; or

(c) a third party donation.

(2) In this subpart and subparts 2 to 4, unless the context otherwiserequires,---

anonymous, in relation to a donation, means a donation that is made in such away that the financial agent who receives the donation does not know who madethe donation

candidate donation means a donation that is made to a candidate, or to anyperson on the candidate's behalf, for use in the candidate's campaign forelection and---

(a) includes,---

(i) where goods or services are provided to a candidate, or toany person on the candidate's behalf, under a contract at less than theirreasonable market value, being a value which exceeds $200, the amount of thedifference between the contract price of the goods or services and thereasonable market value of those goods or services; and

(ii) where goods or services are provided by a candidate under a

contract or arrangement at a value that is more than their reasonable marketvalue, the amount of the difference between that value and the reasonablemarket value of those goods or services; and

(iii) where credit is provided to a candidate on terms andconditions substantially more favourable than the commercial terms andconditions prevailing at the time for the same or similar credit, the value tothe candidate of those more favourable terms and conditions; but

(b) excludes the labour of any person that is provided to a candidatefree of charge by that person


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election expense, in relation to a third party, has the meaning given to it bysection 100

party donation means a donation that is made to a party, or to any person orbody of persons on behalf of the party who are involved in the administrationof the affairs of the party, and---

(a) includes,---

(i) where goods or services are provided to a party, or to anyperson on the party's behalf, under a contract at less than their reasonablemarket value, being a value which exceeds $1,000, the amount of the differencebetween the contract price of the goods or services and the reasonable marketvalue of those goods or services; and

(ii) where goods or services are provided by a party under acontract or arrangement at a value that is more than their reasonable marketvalue, the amount of the difference between that value and the reasonablemarket value of those goods or services; and

(iii) where credit is provided to a party on terms and conditionssubstantially more favourable than the commercial terms and conditionsprevailing at the time for the same or similar credit, the value to the partyof those more favourable terms and conditions; but

(b) excludes---

(i) the labour of any person that is provided to a party free ofcharge by that person; and

(ii) any candidate donation that is included in a return made by acandidate under section 72

receive, in relation to a donation, means to get a donation that has been givenor sent by---

(a) the donor directly; or

(b) the donor indirectly, via a transmitter

specified amount---

(a) in relation to a candidate donation, means $1,000 in sum or value(inclusive of goods and services tax):

(b) in relation to a party donation, means $10,000 in sum or value

(inclusive of goods and services tax):

(c) in relation to a third party donation, means $500 in sum or value(inclusive of goods and services tax)

third party donation means a donation that is made to a third party, or toany person on the third party's behalf, to fund, or to contribute directly orindirectly towards the funding of, the election expenses of the third partyand---

(a) includes,---


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(i) where goods or services are provided to a third party, or toany person on the third party's behalf, under a contract at less than theirreasonable market value, being a value which exceeds $200, the amount of thedifference between the contract price of the goods or services and thereasonable market value of those goods or services; and

(ii) where goods or services are provided by a third party under a

contract or arrangement at a value that is more than their reasonable marketvalue, the amount of the difference between that value and the reasonablemarket value of those goods or services; and

(iii) where credit is provided to a third party on terms andconditions substantially more favourable than the commercial terms andconditions prevailing at the time for the same or similar credit, the value tothe third party of those more favourable terms and conditions; but

(b) excludes the labour of any person that is provided to a third partyfree of charge by that person

transmitter means a person to whom a donor gives or sends a donation for

transmittal to a candidate, party, or third party.

23 Donations to be transmitted to financial agent

(1) Every person to whom a candidate donation is given or sent must, within10 working days after receiving the donation, transmit the donation to thecandidate's financial agent.

(2) Every person to whom a party donation is given or sent must, within 10working days after receiving the donation, transmit the donation to the party'sfinancial agent.

(3) Every person to whom a third party donation is given or sent must,within 10 working days after receiving the donation, transmit the donation tothe third party's financial agent.

24 Disclosure of identity of donor

Where any person involved in the administration of the affairs of a candidate,party, or third party knows the name and address of the donor of an anonymousdonation, that person must disclose the name and address of the donor to thefinancial agent of the candidate, party, or third party.


A person who fails to comply with section 24 with the intention of concealingthe identity of the donor commits an offence and is liable on summaryconviction to a fine not exceeding $40,000.

26 Records of donations

(1) Every financial agent must keep proper records of all donations receivedby him or her.


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(2) Every financial agent who fails, without reasonable excuse, to complywith subsection (1) commits an offence and is liable on summary conviction to afine not exceeding $40,000.


If the Chief Electoral Officer believes that any person has committed anoffence against subpart 2 or 4, the Chief Electoral Officer must report thefacts upon which that belief is based to the New Zealand Police.


If the Electoral Commission believes that any person has committed an offenceagainst subpart 3, the Electoral Commission must report the facts upon whichthat belief is based to the New Zealand Police.


29 Return of candidate donations

(1) A financial agent of a candidate must, at the same time as filing areturn under section 72, file with the Chief Electoral Officer a return---

(a) setting out the details specified in subsection (2) in respect ofevery candidate donation (other than an anonymous candidate donation) receivedby him or her that either on its own, or when aggregated with all otherdonations made by or on behalf of the same donor for use in the same campaign,exceeds the specified amount; and

(b) setting out the details specified in subsection (3) in respect of

every anonymous candidate donation received by him or her that exceeds thespecified amount.

(2) The details referred to in subsection (1)(a) are---

(a) the name of the donor; and

(b) the address of the donor; and

(c) the amount of the donation; and

(d) the date the donation was received.

(3) The details referred to in subsection (1)(b) are---

(a) the amount of the donation; and

(b) the date the donation was received.

(4) Every return filed under subsection (1) must be in the form required bythe Chief Electoral Officer and include a statutory declaration made by thefinancial agent and the candidate, each declaring that to the best of his orher knowledge and belief---


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(a) the return correctly sets out all the details required bysubsections (2) and (3); and

(b) a fair assessment has been made of the reasonable market value ofdonations, if any, of the kind described in paragraph (a)(i) or (ii) of thedefinition of candidate donation in section 22(2).

30 Nil return

Where a financial agent considers there is no relevant information to discloseunder section 29, the financial agent must file a nil return under thatsection.

31 Obligation to retain records necessary to verify return of candidatedonations

(1) A financial agent must take all reasonable steps to ensure that allrecords, documents, and accounts that are necessary to enable a return undersection 29 to be verified are retained until the expiry of the period within

which a prosecution may be commenced under this Act in relation to the returnor in relation to any matter to which the return relates.

(2) Every financial agent who fails, without reasonable excuse, to complywith subsection (1) commits an offence and is liable on summary conviction to afine not exceeding $40,000.

32 Offences relating to return of candidate donations

(1) Every financial agent who fails, without reasonable excuse, to complywith section 29 commits an offence and is liable on summary conviction to afine not exceeding $40,000.

(2) Where a candidate who is his or her own financial agent and who has beenelected fails, without reasonable excuse, to comply with section 29, thecandidate is liable on summary conviction to---

(a) the penalty in subsection (1); and

(b) a further fine not exceeding $400 for every day he or she sits orvotes in the House of Representatives until the return is filed.

(3) Every financial agent who files a return under section 29 that is falsein any material particular is guilty of---

(a) a corrupt practice if the financial agent filed the return knowingit to be false in any material particular:

(b) an illegal practice in any other case unless the financial agentproves---

(i) that he or she had no intention to misstate or conceal thefacts; and

(ii) that he or she took all reasonable steps in the circumstancesto ensure that the information in the return was accurate.


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33 Return of candidate donations to be available for public inspection

(1) As soon as practicable after receiving a return of a candidate'sdonations filed under section 29, the Chief Electoral Officer must send a copyof the return to the Electoral Commission.

(2) The Chief Electoral Officer---

(a) must make a copy of every return of a candidate's donationsavailable for public inspection by any person on payment of any charges thatmay be made under the Official Information Act 1982; and

(b) may publish every return of a candidate's donations in any mannerthat the Chief Electoral Officer considers appropriate.

34 Return of candidate donations to be kept for certain period

(1) The Chief Electoral Officer and the Electoral Commission must keep every

return of a candidate's donations for the period---

(a) beginning with the date of receipt of the return; and

(b) ending with the close of polling day for the second general electionthat takes place after the date of receipt of the return.

(2) On the expiry of the period referred to in subsection (1), the ChiefElectoral Officer and the Electoral Commission must destroy, or cause to bedestroyed, the return.


35 Annual return of party donations

(1) A financial agent of a party must file with the Electoral Commission, by30 April in each year, a return of the party donations setting out, for theyear ending with the immediately preceding 31 December,---

(a) the details specified in subsection (2) for every party donation(other than an anonymous party donation) received by him or her that either onits own, or when aggregated with all other donations made by or on behalf ofthe same donor during the year, exceeds the specified amount; and

(b) the details specified in subsection (3) for every anonymous party

donation received by him or her that exceeds the specified amount.

(2) The details referred to in subsection (1)(a) are---






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(3) The details referred to in subsection (1)(b) are---

(a) the amount of the donation; and

(b) the date the donation was received.

(4) Every return filed under subsection (1) must be---

(a) in the form required by the Electoral Commission and include astatutory declaration made by the financial agent and the party secretary, eachdeclaring that to the best of his or her knowledge and belief---

(i) the return correctly sets out all the details required bysubsections (2) and (3); and

(ii) a fair assessment has been made of the reasonable marketvalue of donations, if any, of the kind described in paragraph (a)(i) or (ii)of the definition of party donation in section 22(2); and

(b) accompanied by an auditor's report obtained under section 36.

(5) Despite anything in subsection (1), where a financial agent is requiredto file under that subsection a return of party donations that relates to theyear in which the party became registered under Part 4 of the Electoral Act1993, that return is to relate to the period beginning with the date ofregistration of the party and ending with 31 December of that year.

36 Auditor's report on annual return of party donations

(1) Every financial agent must, before the Electoral Commission receives thereturn required by section 35, obtain from the auditor appointed under section11 a report on the return.

(2) The auditor must state in the report whether or not, in the auditor'sopinion, the return fairly reflects the party donations received by thefinancial agent.

(3) The auditor must make any examinations that the auditor considersnecessary.

(4) The auditor must specify in the report any case in which---

(a) the return does not, in the auditor's opinion, fairly reflect theparty donations received by the financial agent:

(b) the auditor has not received from the financial agent all theinformation that the auditor requires to carry out his or her duties:

(c) proper records of party donations have not, in the auditor'sopinion, been kept by the financial agent.

(5) The auditor---

(a) must have access at all reasonable times to all records, documents,and accounts that relate to the party donations and that are held by thefinancial agent; and


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(b) may require the financial agent to provide any information andexplanations that, in the auditor's opinion, may be necessary to enable theauditor to prepare the report.

37 Nil return

Where a financial agent considers there is no relevant information to discloseunder section 35, the financial agent must file a nil return under that section.

38 Return of party donation received from same donor exceeding $20,000

(1) Every financial agent must file with the Electoral Commission a returnin respect of every party donation that exceeds $20,000.

(2) Every financial agent must file with the Electoral Commission a returnin respect of every party donation that---

(a) the financial agent knows is from a donor who in the last 12 months

has made 1 or more previous donations; and

(b) when aggregated with all previous donations received from the donorin the last 12 months exceeds a multiple of $20,000.

(3) A return filed under subsection (1) must be in the form required by theElectoral Commission and set out---

(a) the name of the donor (if known); and

(b) the address of the donor (if known); and



(4) A return filed under subsection (2) must be in the form required by theElectoral Commission and set out---




(d) the amounts of all previous donations; and

(e) the date the donation was received; and

(f) the dates all previous donations were received.

(5) A return must be filed under subsection (1) or (2) within 10 workingdays of the donation being received by the financial agent.

39 Obligation to retain records necessary to verify returns of partydonations


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(1) A financial agent must take all reasonable steps to ensure that allrecords, documents, and accounts that are necessary to enable returns undersections 35 and 38 to be verified are retained until the expiry of the periodwithin which a prosecution may be commenced under this Act in relation to thereturns or in relation to any matter to which the returns relate.

(2) Every financial agent who fails, without reasonable excuse, to comply

with subsection (1) commits an offence and is liable on summary conviction to afine not exceeding $40,000.

40 Offences relating to returns of party donations

(1) Every financial agent who fails, without reasonable excuse, to complywith section 35 or 38 commits an offence and is liable on summary conviction toa fine not exceeding $40,000.

(2) Every financial agent who files a return under section 35 or 38 that isfalse in any material particular is guilty of---

(a) a corrupt practice if the financial agent filed the return knowingit to be false in any material particular:

(b) an illegal practice in any other case unless the financial agentproves---

(i) that he or she had no intention to misstate or conceal thefacts; and

(ii) that he or she took all reasonable steps in the circumstancesto ensure that the information in the return was accurate.

41 Return of party donations to be available for public inspection

(1) The Electoral Commission must, 3 working days after receipt, make copiesof the following returns and reports available for public inspection by anyperson on payment of any charges that may be made under the OfficialInformation Act 1982:

(a) an annual return of party donations and accompanying auditor'sreport filed under section 35; and

(b) a return of party donations filed under section 38.

(2) The Electoral Commission may publish the returns and reports specified

in subsection (1) in any manner that the Electoral Commission considersappropriate.


42 Anonymous third party donation

(1) An anonymous third party donation may not exceed the specified amount.

(2) Where an anonymous third party donation exceeds the specified amount,


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the whole donation, or the amount of its value, must be paid to the ChiefElectoral Officer.

(3) An anonymous third party donation, or the amount of its value, must bepaid to the Chief Electoral Officer under subsection (2) by a financial agentwithin 30 days of the donation being received by the financial agent.

(4) All amounts received by the Chief Electoral Officer under subsection (3)

must be paid into a Crown Bank Account.

43 Offence in relation to anonymous third party donation

(1) A person may not enter into an agreement or enter into an arrangement orunderstanding that would have the effect of avoiding the prohibition in section42(1).

(2) Every person is guilty of---

(a) a corrupt practice who wilfully contravenes subsection (1); and

(b) an illegal practi

NZ Govt - Electoral Finance Bill

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