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Party donations disclosure - an overview

Donations to registered political parties and candidates are regulated.  The rules relating to the public disclosure of donations, and limits on the size of anonymous donations and overseas donations were changed on 1 January 2011.  This page relates to the disclosure by registered political parties of donations received.  Information on candidate donations can be found here.
 
A party donation is a donation of money, goods or services that is made to a party and includes:
  • goods or services paid for by others that have a reasonable market value greater than $1,500 (but not a donor's own labour),  
  • discounted goods or services (where the reasonable market value is greater than $1,500) the difference between the contract or agreed price and the reasonable market value of those goods or services is a donation,  
  • the amount of any payment in excess of reasonable market value for goods or services provided by the party, or
  • credit offered at terms more favourable than the commercial terms and conditions prevailing at the time.
The secretary of each registered political party must file an annual return of party donations with the Electoral Commission by 30 April of the following year for donations received in the last 12 months, for the year ending 31 December. A return is required even if the party has received nil donations during the calendar year. An auditor's report must accompany the return, including where nil donations are declared.
 
Parties are also required to make immediate disclosure to the Electoral Commission where a donor gives a party more than $30,000 in a 12 month period.  Parties must have systems in place to track aggregated totals by donors for the purposes of the annual donations return, as well as immediate returns of donations exceeding $30,000. 
 
The Electoral Commission is required to set the forms of return, supervise parties' compliance, and make returns available for public inspection.
 
Annual return of party donations
Party donations and contributions to donations of more than $15,000 (including GST) received by the party during the year are required to be declared in the party's annual return of donations.  A series of donations, or contributions of more than $1,500 to donations, made by one donor that adds up to more than $15,000 must also be declared.
 
The return must include the name of the donor, their address, the amount and date of each donation and contribution ofmore than $15,000.
 
The annual returns also include details of any anonymous donations and overseas donations exceeding $1,500 as well as donations protected from disclosure received via the Electoral Commission. 
 
There is also a new requirement for a party to disclose certain details regarding donations received below $15,000 (see below for more information on the banding of donations).
 
Donations to an electorate candidate disclosed in the candidate's post-election return are not included in the annual return.
 
For donations received by parties during 2010 the rules were as provided in the Electoral Act 1993 prior to amendment on 1 January 2011.  The 2010 annual returns are available [here] or may be viewed at the Electoral Commission’s offices, Level 9, 17-21 Whitmore Street, Wellington between 9am and 5pm weekdays. 
 
Immediate return of a donation exceeding $30,000
A return must be filed by a party secretary with the Electoral Commission within 10 working days of receipt whenever a party receives a donation that:
  • exceeds $30,000, or
  • when added to all the donations received from the same donor in the preceding 12 months exceeds $30,000.
The return should be filed using the prescribed form setting out the name and address of the donor, the amount and date of the donation together with details of the amounts and dates of all previous donations received from that donor. Returns of party donations exceeding $30,000 are available [here].
 
Anonymous donations
Any donation that is made in such a way that the party secretary does not know the identity of the donor, and could not, in the circumstances, reasonably be expected to know the identity of the donor. is an anonymous donation. 
 
An anonymous donation is limited to $1,500. Where a party receives an anonymous donation that exceeds $1,500 the party may retain $1,500 of the donation and the party secretary must within 20 working days of receipt pay the balance of the donation to the Electoral Commission for payment into a Crown bank account.
The following are considered to be anonymous donations:
  • a bank cheque supplied without any advice or incidental information as to the identity of the person supplying the funds for the cheque
  • cash received with no way of tracing the donor.
Donations made in the following ways are not considered to be anonymous:
  • made by personal cheque, as the donor's name is set out on the cheque and this is an acknowledgement that the money comes from that source
  • made by a person who identifies himself or herself to the party, or who is known to the person who receives the donation on behalf of the party
  • where a known or identifiable donor asks that the donation be treated as anonymous
  • a donation by way of a solicitor's trust account cheque that is not a donation from that law firm.
Concealing the identity of a donor when the donor is not anonymous is an offence.

Overseas donations

Donations from overseas persons (including overseas organisations or companies) are limited to $1,500.

 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
  • an unincorporated body that has its head office or principle place of business outside New Zealand.
Where a party receives an overseas donation that, either on its own or when aggregated with all other donations made by or on behalf of the same overseas person during the year, exceeds $1,500 the party secretary must within 20 working days of receipt either return the whole donation to the donor or the amount less $1,500. If it is not possible to repay the donor the party secretary must within this timeframe pay the balance of the donation to the Electoral Commission for payment into a Crown bank account.
 
Donations protected from disclosure
A donation protected from disclosure is a mechanism for any person who wants to make a donation of more than $1,500 to a registered political party and does not want their identity to be disclosed to either the public or to the party receiving the donation.   There are limits on how much can be paid by the same donor and how much a party can receive by way of protected donations during each parliamentary term.
 
Information on how to make a donation protected from disclosure, including the limits that apply, can be found [here].

Records of donations

Party secretaries are required to keep records of all donations received. Records should be kept of gifts from any person or organisation to a registered political party.

Banding of donations

From 1 January 2011 party secretaries need to keep records of the following information for disclosure in the annual return of party donations in 2012 and thereafter:
  • the number of anonymous party donations received under $1,500 and the total amount of such donations
  • the number of overseas party donations received under $1,500 and the total amount of such donations
  • the number of all party donations received over $1,500 but less than $5,000 and the total amount of such donations
  • the number of all party donations received over $5,000 but less than $15,000 and the total amount of such donations.

Donations made up of contributions

A donation can be made up in part by funds contributed by more than one person (contributors). The total proceeds of a collection 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 Act.
 
If a donation, other than an anonymous donation, is made up of contributions, the transmitter or donor must tell the party secretary:
  • the name and address of the donor,  
  • whether the donation is made up of contributions,  
  • the total amount of contributions of $1,500 or less, and
  • in the case of contributions greater than $1,500, the name, address and contribution of each contributor and whether any of them are ‘overseas persons’.
If the party secretary knows, or has reasonable grounds to believe, that the donor has failed to supply information about contributions, the whole donations must be returned to the donor.

Transmitted donations

A donation can be made either directly by the donor to the party or indirectly by a transmitter who transmits a donation to the party secretary on someone else’s behalf, for example via a lawyer’s trust fund. Any person who receives a party donation on the party’s behalf must transmit it to the party secretary or pay the donation into a bank account nominated by the party secretary within 10 working days. When transmitting a donation, the transmitter must tell the party secretary:
  • whether 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,
  • the total amount of contributions of $1,500 or less, and
  • in the case of contributions greater than $1,500: the name, address and contribution of each contributor and whether any of the contributors are ‘overseas persons’.

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

Aggregation of donations 

Aggregation of donations is not limited to the same type of donations.  If during the year a donor donates $5,000 by cheque, $3,000 in cash, and $4,000 worth of goods and services (either at no charge or at a $4,000 discounted price), that donor has donated $15,000 in aggregate and those donations need to be included in the annual return.

Donation of labour

Donation of labour does not count as long as the person is donating their own labour free of charge.  The donation of someone else’s time (for example, by a business of its employees’ time) may constitute a donation.  A discount offered on the price of someone’s own labour may also count as a donation.

Discounted goods and services

If goods or services are provided at less than reasonable market value, the difference between the contract price of the goods or services and their reasonable market value is a donation (if the reasonable market value of the goods exceeds $1,500) from the person who provided the goods or services. 

Payment to attend a fundraising event

If the reasonable market value of a fundraising event is less than the price charged, then the difference is a donation.  For instance, in the case of a fundraising dinner the donation value will be the difference between a comparable restaurant meal and the ticket price. In the case of a garment sale, the donation value will be the difference between a comparable shop-bought garment and the sale price (i.e. the donation is not the profit from sale).

GST component of a donation

The GST component of a donation will be counted in the value listed on the return where the nature of the donation attracts GST.  Parties are advised to consult Inland Revenue or seek independent professional taxation advice if unsure whether the type of the donation attracts GST.