Queensland Supreme Court clarifies property donor laws

In many jurisdictions around Australia including Queensland and New South Wales (NSW), property developers are prohibited from making political donations. 

In NSW, a ‘property developer’ is an individual or corporation that:

• carries on a business mainly concerned with the residential or commercial development of land, with the ultimate purpose of its sale or lease of the land for profit, and
• in the course of that business:
  • one relevant planning application has been made by or on behalf of the individual or corporation that is pending; or
  • three or more relevant planning applications have been made by or on behalf of the individual or corporation and determined within the preceding seven years.

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

While simple in theory, the recent case in Queensland of Australian Institute for Progress Ltd v The Electoral Commission of Queensland & Ors [2020] QSC 54 highlights the surprising complexity of a seemingly straightforward ban.

The Australian Institute for Progress (AIP) is a Queensland based think tank that undertakes research and advocacy on various topics, generally aligning with a centre-right view. The AIP is funded from various sources, including prohibited donors (property developers). 

Conscious of the political donations ban and the recent State election, the AIP wrote to the Electoral Commission of Queensland (ECQ) in February this year, advising that it undertakes various policy and advocacy activities including:

• research;
• seminars and public meetings;
• surveys and opinion polling;
• media;
• assessment of candidate and political party attitudes to specific issues;
• advertising; and
• potentially recommending a vote for or against a particular party.
  
  (the Activity)

The AIP asked the ECQ whether it would be legal for prohibited donors to give to them if they continued the Activities. When the ECQ responded that they may be committing an offence, the AIP went to the Supreme Court to clarify the operation of the law.

The law in question, the Electoral Act 1992 (Qld) (Act) prohibits a ‘political donation’ by a prohibited donor. A ‘political donation’ includes, as set out in section 274 of the Act:

• a gift made to or for the benefit of –
  • a political party; or
  • an elected member; or
  • a candidate in an election.
• a gift made to or for the benefit of another entity –
  • to enable the entity (directly or indirectly) to make a gift mentioned [above] or to incur electoral expenditure…
    
    (emphasis added).

‘Electoral expenditure’ is defined as:

‘expenditure incurred for the purposes of a campaign for an election, whether or not the expenditure is incurred during the election period for the election.’ 

The Court had to consider whether the AIP’s Activities were ‘electoral expenditure’ under the Act. 

The AIP’s principal submission was that for the ban to apply, the Activities needed to be for the benefit of a political party, elected member or candidate. If not, they would not be incurred for a campaign for an election, and would not be electoral expenditure. 

After dealing with preliminary technical issues, Applegarth J considered the meaning of section 274 in two ways. First, his Honour considered whether the expenditure needs to be incurred for a specific candidate. He concluded no, expenditure incurred for a campaign for an election (whether or not it was for a specific candidate) is electoral expenditure. His Honour noted that the purpose of a prohibition on political donations would be entirely undermined if instead of donating to a political party, a property developer could donate to a third party that advocated for the political party but not on behalf of that party. 

In considering what ‘campaign’ for an election means, his Honour accepted the tenor of the Australian Oxford Dictionary’s definition of an ‘organised course of action for a particular purpose, especially to arouse public interest’. A campaign includes more than just advocating to elect a person or party. 

However, his Honour did make passing comments which may offer the AIP (and similar organisations) some comfort. Justice Applegarth noted that section 274(1)(b)(i) covers gifts to allow another entity to donate to a political party, elected member or candidate in an election (for any reason), or to allow the other entity to incur electoral expenditure. There is nothing preventing donations for other purposes. His Honour even suggested that a gift made to another entity to (for example) buy a building would not be electoral expenditure and would be allowed. Relying on this, the AIP has already indicated that it will create separate bank accounts for ‘electoral expenditure’ and ‘other expenditure’ (the latter of which prohibited donors could contribute to).[1] 

While this case dealt with the Queensland Electoral Act, similar provisions also apply under the NSW Electoral Funding Act 2018 (NSW) and the same prohibition on property developer donations applies to local government elections in both jurisdictions.[2] Whilst the NSW local government elections may be postponed until 2021 due to COVID-19, in light of this recent decision of the Supreme Court of Queensland, candidates should ensure that they comply with donation laws, particularly around property developers, and seek legal advice if in doubt.

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[1] https://aip.asn.au/2020/04/aip-v-ecq/
[2] Local Government Electoral Act 2011 (Qld) Part 6, Div 1A. 

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.