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People who don’t vote – unless they persuade the Australian Electoral Commission that they have a compelling excuse – are subject to a fine of $20. No ifs, no buts.

In the 2013 Federal Election just under a million people didn’t vote, and while many could convince the AEC they had a good reason, the agency still collected over $2.2 million in fines.

About 3000 who failed to respond to AEC requests for an explanation on why they didn’t vote were issued with a summons to appear in court and were potentially subject to fines of up to $170 plus court costs. (As any penalties are imposed by the courts, the AEC has no data on the outcomes of these cases.)

But what happens if a lobby group – which donated tens of thousands of dollars to a Tasmanian political party – fails to submit returns to the Australian Electoral Commission disclosing the donations?

The law is clearcut. Section 305B in Part XX of the Commonwealth Electoral Act 1918 requires all donors over a specified threshold to disclose their contributions to political parties within 20 weeks of the end of the financial year. Under Section 315 of the Act a donor which doesn’t submit a disclosure return “is guilty of an offence punishable, upon conviction, by a fine not exceeding” $1000.

But what happens if the law is not enforced?

Three strikes and they’re still in

The case of Pathology Australia, the peak lobby group for the private pathology industry, illustrates how when it comes to enforcement of Australian electoral law there is one law for voters and another for major donors. 

In early 2012 – during Julia Gilliard’s Prime Ministership – the Australian Association of Pathology Practices (later renamed Pathology Australia) made three separate donations totalling $32,000 to the Federal office of the Labor Party. It also donated $25,000 to the Tasmanian branch of the Liberal Party.

The provisions of the Commonwealth Electoral Act are clear: donors that year were required to lodge a simple form detailing the dates, amounts and recipients of donations over the threshold that year of $11,900. The deadline was November 17, 2012.

The Labor Party disclosed the donations in its return.

The Liberal Party disclosed the donation it received in its return.

However, Pathology Australia filed no disclosure return and the AEC asked no questions.

The next year it was similar. Pathology Australia donated another $25,000 to the Tasmanian Branch of the Liberal Party. The Liberal Party disclosed the donation. Once more Pathology Australia didn’t lodge a disclosure return and once more the AEC apparently asked no questions.

It was same again for the 2013/14 financial year. Another $27,200 was given to the Tasmanian Liberals in two separate donations: one of $25,000 and another of $2200. The Liberal Party disclosed the first but not the second. Once again, Pathology Australia didn’t lodge a disclosure form and still the AEC didn’t notice.

Despite having donated $109,200 over three years to political parties the AEC hadn’t noticed the discrepancy between the disclosure of donations by the political parties and failure of the donor to comply with the simple provisions of Australian electoral law.

In late January Tasmanian Times first contacted Pathology Australia to discuss the group’s donations. After several unreturned calls, several questions were sent by email, including one about why it was that the organisation hadn’t submitted a return to the AEC. That too drew no response.

A little over a month later Pathology Australia’s CEO Liesel Wett finally submitted returns to the AEC for the three years it had made donations over the disclosure threshold. However, even then the lobby group didn’t get it right. While the Liberal Party of Tasmania disclosed receiving $25,000 from Pathology Australia in 2011/12, this was omitted from the pathology lobby group’s return. (In that year Pathology Australia only disclosed the $32,000 of donations to the Federal Labor Party.) Nor did the AEC notice the discrepancy of Pathology Australia disclosing a $2200 contribution in 2013/14 which the Liberal Party of Tasmania hadn’t disclosed.

After further phone calls and emails, Wett responded via email. She stated that Pathology Australia “has donated to both major parties over the years. We have donated to both the LNP’s Federal Leaders Forum and the Federal Labour Business Forum … Our AEC disclosures will indicate all funds we may donate from time to time to political parties according to AEC guidelines.”

Enforcement of donor disclosure? What enforcement?

The saga of Pathology Australia’s failure to disclose its donations raises many questions. While the political parties disclosed the donations, Pathology Australia didn’t. Compounding Pathology Australia’s failure to comply with electoral law, the AEC had failed to ensure compliance with the law.

The lack of enforcement in large part stems from the AEC’s lack of scrutiny of the returns which are submitted to it. After returns are filed to the AEC, the data is uploaded to their website. Each donor listed in the returns, for example by a political party, has a hyper-link created to their matching returns. Simply clicking on the hyper-links reveals which donors have filed returns and which ones haven’t.

The AEC told Tasmanian Times that it “conducts a year-round program of examining financial disclosure returns lodged by entities. This includes examination of apparent discrepancies.”

However, the AEC’s failure to notice the lack of returns from one of the largest Tasmanian political donors over a three-year period suggests the cross-checks are far from rigorous.

The AEC pursues non-disclosing donors only so far, stating that its first priority is “is to seek full and accurate disclosure in keeping with the requirements of the Act.” It only pursues the matter further if the donor fails to submit the required returns. In that case, the AEC can refer the lack of compliance to the relevant State or Territory office of the Commonwealth Directorate of Public Prosecutions (DPP). It is then a matter of discretion whether the DPP pursues the matter further. There is no readily available data on how many, if any, donors have been prosecuted for their failure to comply with electoral law.

The potential penalties set out in Commonwealth Electoral Act imply that failure to disclose political donations is viewed as a far more serious offence than failure of registered voters to cast a vote.

The provision of a nominal fine on non-voters is intended to ensure high voter participation in elections. The provision requiring major donors to disclose their contributions is designed to ensure that companies and lobby groups role in funding political parties can’t be entirely done without public disclosure.

The question remains though why it is that enforcement is vigorously pursued against non-voters but not against major donors. Powerful companies and industry lobby groups which aren’t entitled to vote but which donate tens if not hundreds of thousands of dollars to political parties arguably have a disproportionately large effect on Australian democracy. However, it seems major donors can largely ignore the donations disclosure provisions of Australian electoral law without risking any penalty.

Bob Burton is a Hobart-based Contributing Editor of Tasmanian Times and has previously been a freelance contributor to the British Medical Journal.

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Earlier on in this series of articles on Tasmanian Times:

•  October 27: The private pathology industry emerges as major Tasmanian Liberals donor

• October 28: Who’s a Liberal donor gonna? Rentbusters!