Part 3: Election expenses and donations

Candidates are responsible for managing their obligations in respect of an election, including record keeping and filing a return of expenses and donations after the election. This section explains how much a candidate can spend on their advertising campaign, the types of donations a candidate may receive and the reporting of expenses and donations.

Key messages

You can start campaigning and fundraising for the general election at any time.
Spending limits apply to advertising published in the regulated period (23 June to 22 September).
There is no overall limit on how much you can receive by way of donations.
Candidate donations and expense returns for the 2017 general election must be filed by 23 January 2018.
All candidates must file a return of election expenses and donations, even if no money was received or spent.

Election expenses

Expenditure limit

Your election expenses during the regulated period (23 June to 22 September) must not exceed $26,200 (including GST). It is an offence to spend more than this.

If you are representing a registered party, you should stay in touch with your party secretary about advertising. This is because the content of advertising may mean that it is both candidate advertising and party advertising, with consequential effects on the expenditure limits and expenditure returns of the candidate and the party.

Election expenses

Election expenses are the costs of advertising in any medium that:

  • may reasonably be regarded as either encouraging voters to vote for the candidate, or discouraging voters from voting for another candidate, or both (whether or not the name of the candidate(s) are mentioned)
  • is published, or continues to be published, during the regulated period, and
  • is promoted by the candidate or any person (including a registered promoter) authorised by the candidate.

[See section 205 of the Electoral Act]

Candidate election expenses include:

  • the cost incurred in the preparation, design, composition, printing, postage and publication of the advertisement
  • the reasonable market value of any materials used for the advertisement, including materials provided to the candidate for free or below reasonable market value
  • the apportioned costs for advertisements that promote two or more candidates, or a party and a candidate.

[See section 3E of the Electoral Act]

Your nomination deposit or the costs of food, hall hire, surveys or opinion polls, free labour, or replacing materials destroyed through no fault of your own are not election expenses. The cost of any framework that supports an electoral sign (other than a commercial framework) is not an advertising expense.

Surveys and opinion polls

The exclusion for surveys or opinion polls is not unlimited. If a survey goes beyond merely eliciting voters’ views and can reasonably be regarded as encouraging voters to vote for a constituency candidate or a political party then it will not be a survey or opinion poll for the purposes of the Act. It will be an election advertisement and the costs associated with the survey are election expenses. If it is a candidate advertisement undertaken by phone canvassers who provide their labour free of charge, the costs are exempt. Any other costs incurred (for example, line rental and costs of any calls) would be an expense. The costs of paying any canvassing company to undertake the canvassing would be an election expense.

Vehicle signage

The costs of candidate advertisement signage on campaign cars and other forms of mobile candidate advertising are election expenses. However, advertising expenses do not include the running costs of any vehicle used to display an election advertisement if the use of the vehicle for that purpose is not the subject of a contract, arrangement or understanding for payment.

Websites

Election expenses in relation to candidate advertisements published on a website include the costs that you incur preparing, designing and publishing the advertisement including hosting fees. They do not include the costs of setting up and maintaining the hardware and software infrastructure of the website.

Items distributed for public display

If you distribute items such as t-shirts, bumper stickers and flags before the start of the regulated period, you should assume that they will continue to be displayed during the regulated period and include the cost of these items as an election expense. [See section 205D of the Electoral Act]

Care should be exercised with such items because you could be exposing your supporters to the risk of prosecution if they display the items on election day.

Items reused between elections

Expenses cannot be apportioned between elections. If you purchase materials such as banners and then reuse them in subsequent elections, at each subsequent election you must account for the reasonable market value of the materials as an election expense.

We suggest that you either use the price that was originally paid for the item, or if this is not known, what the item would cost to purchase now based on two quotes.

Staff time

The cost of labour provided to you free of charge is not an election expense. The cost of paid campaign staff, for example a campaign manager, is also not an election expense unless the staff member is directly involved in the preparation, design, composition, printing, postage or publication of election advertising. An example where paying staff might be an expense is where the staff member is directly involved in preparing copy or artwork.

Election expenses paid before or after the regulated period

Expenses paid for or incurred either before the regulated period (23 June to 22 September) or after election day (23 September) must be included in your return to the extent to which they relate to election advertisements published within the regulated period.

Apportioning election expenses

Where a candidate advertisement is published before and during the regulated period, you are responsible for apportioning the advertising expenses so that only a fair proportion of the expense is attributed to the regulated period.

It will also be necessary for you to apportion election expenses if the total expenses of an election advertisement relate partly to the promotion of your candidacy and partly for:

  • the party and/or
  • another candidate, or candidates.

Candidates sharing advertising costs with a party seeking the party vote should discuss apportionment arrangements with the party secretary.

Apportionment is a factual exercise determined by the circumstances of each case. We are happy to discuss any apportionment questions.

Election expenses for advertisements promoted by third party

Expenses cannot be apportioned with third party promoters. If you authorise someone else to publish advertising encouraging people to vote for you, the cost of the advertising will form part of your candidate election expenses. The same costs will also be an
election expense of the third party.

You will need to obtain information from the third party about costs incurred. The advertising and expenditure rules that apply to third parties are set out in the booklet Third Party Handbook – General Election 2017.

Paying election expenses

Invoices for election expenses must be sent to you within 20 working days of the official result being declared (by 6 November).

You must pay any bill within 40 working days of the declaration (4 December). It is an offence not to do this. Sections 205H and 205I of the Electoral Act set out a procedure to follow if a bill is disputed.

Donations

Candidate donations

A candidate donation is a donation of money, goods or services that is made for use in the candidate’s campaign. [See section 207 of the Electoral Act]

Candidate donations, and contributions to donations, of more than $1,500 (including GST) are required to be declared in your return of expenses and donations.

A series of donations or contributions to donations made by one person that adds up to more than $1,500 must also be declared.

A candidate donation includes:

  • where a candidate is provided with goods or services free of charge that have a reasonable market value greater than $300
  • where a candidate is provided with discounted goods or services and the reasonable market value of the goods or services is greater than $300, the difference between the contract or agreed price and the reasonable market value of those goods and services is a donation
  • where a candidate sells over-valued goods or services the difference between the price paid and the reasonable market value is a donation, for example a fundraising auction or dinner
  • where credit is provided to a candidate on more favourable terms than those prevailing at the same time for similar credit, the value of the favourable terms is a donation.

The following are not a candidate donation:

  • volunteer labour
  • goods or services provided free of charge to a candidate, or to any person on the candidate’s behalf, that have a reasonable market value of $300 or less, or
  • money provided by the candidate for his or her own campaign.

If a person or organisation gives or pays for goods or services that would otherwise be election expenses, or your party gives or pays for expense items, the reasonable market value of those items, whatever their value, should be recorded as an election expense. If the reasonable market value of the items exceeds $300 it should also be recorded as a donation.

Party donations

A party donation is a donation of money, goods or services that is made to a party. Sometimes a party donation will be made via a candidate or an electorate committee.

If the donor does not specify whether the donation is to the party or the candidate, the presumption is that it is a donation to the party.

If you receive a donation that is for the party it must be transmitted to the party secretary within 10 working days of receipt or deposited into a bank account nominated by the party secretary.

You must also tell the party secretary:

  • that the donation is being transmitted on behalf of a donor
  • the name and address of the donor
  • whether the donation is made up of contributions
  • in the case of contributions made by any individual contributor that either on its own or when aggregated with other contributions made by the same contributor are greater than $1,500, the name and address of the contributor, the amount of the contribution (or the total amount of the aggregated contributions) and whether the contributor is an ‘overseas person’, and
  • the total amount of any other contributions.

If the name and address of the donor are not known the donation must be treated as an anonymous donation to the party.

Donations made up of contributions

A donation can be made up in part by funds contributed by more than one person (contributors), for example where there is a collection or whip-round for a candidate’s campaign. [See section 207 of the Electoral Act]

The total proceeds of a collection or whip-round are treated as a donation under the Electoral Act. The person who collects the money will normally be the donor. The individuals who contribute to the collection are contributors for the purposes of the Electoral Act.

If a candidate donation, other than an anonymous donation, is made up of contributions, the transmitter or donor must tell the candidate:

  • the name and address of the donor
  • that the donation is made up of contributions
  • in the case of contributions made by any individual contributor that either on its own or when aggregated with other contributions made by the same contributor are greater than $1,500: the name and address of the contributor, the amount of the contribution (or the total amount of the aggregated contributions), and whether the contributor is an ‘overseas person’, and
  • the total amount of any other contributions.

If you know, or have reasonable grounds to believe, that the donor has failed to supply information about contributions, the whole donation must be returned to the donor.

Example:

If person A writes four cheques for $500 to the candidate’s campaign committee and persons B, C and D each give $100, and the committee then makes a donation to the candidate, the candidate campaign committee organiser would need to disclose to the candidate that the $2,300 donation is funded from contributions including a contribution of $2,000 from person A, and provide person A’s name and address, and $300 in total from other contributors < $1,500.

Example:

If the electorate committee holds five fundraisers in the run up to the election and gives the candidate five cheques for $1,000 over a six month period this is an aggregated donation of $5,000. These are not contributions. The total amount needs to be included in the candidate return.

Raffles, stalls and other fundraisers

Supporters providing you with free cakes or other goods or services to use for fundraising are not making a donation for the purposes of the Electoral Act if the value of the items given is worth $300 or less. Purchasers of raffle tickets and cakes from a cake stall are not ‘donors’ as they are not making a donation to anyone. The total proceeds of a raffle or a cake stall for your campaign are treated as a donation. The person who runs the raffle or cake stall will normally be the donor.

If the total funds from the raffle or cake stall are over $1,500, then your return must include the name and address of the person who ran the fundraiser and subsequently donated the proceeds, along with the total amount given and the date that the donation was received.

Whether the individuals who purchase a ticket or buy a cake are ‘contributors’ depends on whether they bought their ticket or cake in the knowledge or expectation that some or all of the money paid would be included in a donation to the candidate. This will be a question of fact. It would need to be very clear to purchasers that it is a candidate fundraiser for the purchasers of tickets to be ‘contributors’.

If the purchasers of raffle tickets are ‘contributors’, the organiser must tell the candidate at the time of making the donation that the donation is funded from contributions. The donor must also disclose whether the donation is made up of contributions of more than $1,500. If an individual pays more than $1,500 for raffle tickets, their name and address would have to be disclosed in your return, along with the amount of their contribution.

If a ticket is sold to a fundraising event, such as a dinner, or an item is auctioned at a fundraising auction, the difference between the price paid for the ticket or item and the reasonable market value of the ticket or item is a donation. Determining the reasonable market value for unique items may be difficult. For example, if you have speakers at the dinner or auction a one-off item. However, you should not rely on the price paid at a fundraising auction as evidence of reasonable market value.

In the absence of an objective basis to value the donation component that you can defend, the Commission’s advice would be to err on the side of caution and treat the entire difference between the ticket price or auction price and the reasonable market value of assessable goods or services such as food and beverages, as a donation.

Example:

If person A bids and wins two separate items at a candidate fundraising auction and pays $1,500 for each item (i.e. $3,000 in total), both of which have a reasonable market value of $500 (i.e. $1,000 in total) - the donor responsible for the fundraiser would need to disclose that the donation is funded from contributions and identify that person A has contributed $2,000 to the donation and provide person A’s name and address.

Transmitted donations

A donation can be made either directly by the donor to you or indirectly by a transmitter who transmits a donation to you on someone else’s behalf, for example via a lawyer’s trust fund.

Any person who receives a candidate donation on your behalf must transmit it to you within 10 working days.

When transmitting a donation, the transmitter must tell you:

  • that the donation is being transmitted on behalf of a donor
  • the name and address of the donor
  • whether the donation is made up of contributions
  • in the case of contributions made by any individual contributor that either on its own or when aggregated with other contributions made by the same contributor are greater than $1,500: the name and address of the contributor, the amount of the contribution (or the total amount of the aggregated contributions), and whether the contributor is an ‘overseas person’ (see below), and
  • the total amount of any other contributions.

Where a transmitter does not disclose the name and address of the donor, the donation must be treated as an anonymous donation.

Anonymous donations

Candidates are not allowed to retain anonymous donations exceeding $1,500. An anonymous donation is a donation made in such a way that the candidate who receives the donation does not know the identity of the donor and could not, in the circumstances, reasonably be expected to know the identity of the donor. [See section 207 of the Electoral Act]

If you receive an anonymous donation greater than $1,500, you may retain $1,500 of that donation. The balance of the donation must, within 20 working days of receipt, be paid to the Electoral Commission for payment into a Crown bank account.

A donation from a trust must include the names and addresses of the settlor of the trust, or the person at whose direction the donation was given.

Overseas donations

Candidates are not allowed to retain donations or contributions of more than $1,500 made by an overseas person. [See section 207K of the Electoral Act]

An overseas person is:

  • an individual who resides outside New Zealand and is not a New Zealand citizen or registered elector
  • a body corporate incorporated outside New Zealand, or
  • an unincorporated body that has its head office or principal place of business outside New Zealand.

If you receive a donation from an overseas person exceeding $1,500 (either on its own or when aggregated with all other donations from the overseas person), you can retain $1,500 of that donation. The balance of the donation must, within 20 working days of receipt, either be returned to the overseas person who made the donation, or if this is not possible, be paid to the Commission for payment into a Crown bank account.

If you receive any donation from a donor who is not an overseas person that includes a contribution from an overseas person greater than $1,500 (either on its own or when aggregated with all other donations from the overseas person), you must return the whole donation to the donor. If that is not possible, you must forward the whole donation to the Commission for payment into a Crown bank account.

Keeping records of expenses and donations

You must take all reasonable steps to keep records of all candidate donations received (even donations of less than $1,500) and all candidate election expenses. You must keep invoices and receipts for all election expenses of $50 or more for three years after returns are filed. You will need to have systems in place to track aggregated totals by donors for the purposes of the return.

Return of election expenses and donations

After a general election you are required to file a return of candidate expenses and donations with the Commission. [See sections 205K and 209 of the Electoral Act]

The return must:

  • be made on the Return of Electorate Candidate Donations and Expenses form, and
  • be filed within 70 working days of election day ( by 23 January 2018).

The return form is available through the Commission or through your party secretary, and contains detailed advice about how to complete and file the return.

Candidates representing registered parties are recommended to consult closely with their party secretary about their expense returns. This is because apportionment issues may arise between the candidate’s expense return and the party’s expense return.

If there are no election expenses or donations to report on, you must file a nil return.

The returns are open to public inspection and will be published on the Commission’s website.

List only candidates

A candidate who is on the party list and does not contest an electorate is not required to file a return.

Election expenses incurred and donations received must be returned by the party.

Return of nomination deposits

If you receive 5% or more of the votes cast for all candidates in the electorate you are entitled to a refund of the $300 deposit paid when you were nominated.

A deposit cannot be refunded until you have filed your return of election expenses and donations. If you were nominated by a party on its bulk nomination schedule, the deposit cannot be refunded until all candidates on the schedule have filed their returns.

Last updated: 28 June 2017