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Allens Arthur Robinson

Focus: Planning – September 2008

Disclosure of political donations in NSW

In brief: Amendments to legislation in New South Wales will require developers to disclose political donations or gifts (of more than $1000 in value) when making a development or planning application. Additionally, the reforms require the relevant authorities to make a record of political donation disclosures and also the results of how councillors voted on planning decisions. Partner Paul Lalich (view CV) and Lawyer Tom Cregan report.

How does it affect you?

  • All persons with a financial interest in development and development-related matters are required to observe disclosure requirements in respect of political donations and gifts.
  • The requirements include disclosure of political donations made, or gifts given (within the past two years) with a cumulative value of $1000 or more by individuals with a financial interest in a development application or modifications of development consent, including Part 3A Concept Plan and Project Applications, or development applications to councils.
  • Disclosure is also required where submissions are made in respect of Environmental Planning Instruments or Development Control Plans.
  • Failure to disclose this information can result in a fine of up to $22,000.
Outline of the reforms

The Local Government and Planning Legislation (Political Donations) Act 2008 (NSW) (the Political Donations Act) introduces amendments (from 1 October 2008) to the Environmental Planning and Assessment Act 1979 (NSW) (the EP&A Act) and Local Government Act 1993 (NSW). The amendments provide for new reporting requirements in respect of political donations and gifts.

The obligations imposed by the Political Donations Act require that a person who has a financial interest in a relevant planning application made to the Minister, Director-General or a council disclose all 'reportable political donations' or 'gifts' (made within a period of two years before the application) at the time of the making of the application.

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What is a relevant planning application?

A relevant planning application is broadly defined to include applications for development or modification of development consent (including Part 3A Concept Plan and Project Applications, or development applications to councils) and also submissions made in respect of Environmental Planning Instruments or Development Control Plans (a relevant planning application).

An application for a complying development certificate, however, is not a relevant planning application.

Disclosure is also required where a political donation or gift is made subsequent to the lodgement of a relevant planning application by the person who made the application.

Additionally, the reforms require the general manager of a council to keep a record of political donation disclosures and also of how councillors voted on planning decisions. These records are required to be made available to the public.

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What are reportable political donations, gifts and financial interests?

The definition of what constitutes a 'reportable political donation' and 'gift' is found in the Election Funding and Disclosures Act 1981 (NSW).

Reportable political donations include donations of $1000 or more to, or for the benefit of, the party, elected member, group or candidate or made by a major political donor to a group or candidate, or made to the major political donor (a donation). However, a donation of less than $1000 is reportable if the aggregated total of such donations made to the same party, elected member, group or candidate or person, within the same financial year (ending 30 June) is $1000 or more.

A gift includes a disposition of property or a gift of money or the provision of other valuable service for no consideration or for inadequate consideration (a gift). A gift will also include a contribution or entry fee to participate in a fundraising function.

A person has a financial interest in a relevant planning application if:

  • the person is the applicant or the person on whose behalf the application is made;
  • the person is the owner of the site to which the application relates or has entered into an agreement to acquire the site or any part of it;
  • the person is associated with the person referred to above and is likely to obtain a financial gain if that development is authorised or carried out (other than a gain merely as a shareholder in a company listed on the stock exchange); or
  • the person has any other interest relating to the application, the site, or the owner of the site that is prescribed by the regulations.

(a financial interest)

Persons are 'associated' with each other if:

  • they carry on business together in connection with the relevant planning application or they carry on business together that may be affected by the granting of the application (in the case of a relevant planning submission);
  • they are related bodies corporate under the Corporations Act 2001 (Cth);
  • one director of a corporation and the other is any such related corporation or a director of any such related corporation; or
  • they have any other relationship prescribed by the regulations.

There are no relevant regulations that prescribe when persons are 'associated' and the Department of Planning has informed us that no such regulations are proposed. However, we understand that the Department of Planning is likely to publish, prior to 1 October 2008, further guidance on the practical application of when a person is 'associated'.

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When is a disclosure statement required and what must be included?

A disclosure statement must be made at the time of lodgement of the relevant planning application or if the donation or gift is made after the lodgement of the relevant planning application, then within seven days of the making of the donation or gift.

This disclosure must include the following details of each donation made during the relevant disclosure period:

  • the name of the party or person for whose benefit the donation or gift was made;
  • the date of the donation or gift;
  • the name of the donor or person who made the gift;
  • the residential address of the donor or person who made the gift (in the case of an individual), or the address of the registered or other official office of the donor or the person who made the gift (in the case of an entity);
  • the value of the donation or gift; and
  • in the case of a donor that is an entity and not an individual – the ABN.

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Penalty for failure to lodge a disclosure statement

A person is guilty of an offence under section 125 of the EP&A Act if they fail to disclose a donation or gift and the person knows, or should reasonably know, it was made and that a disclosed statement is required by the Political Donations Act. The maximum penalty for any such offence is $22,000.

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Implications of reforms

The reforms place considerable obligations on political donors to ensure that each relevant donation or gift is properly disclosed. The financial interest test is broad enough to require a disclosure by all individuals associated with, for example, an applicant for development consent or the owner of the subject land. Persons are relevantly 'associated' if they carry on business together in connection with the application for consent. This could require disclosure by consultants, as well as the applicant, for development consent. It is hoped that further guidance from the Department of Planning will identify a workable limitation on this potentially onerous obligation.

If you would like further clarification on this new regime or any other environment and planning issue feel free to contact us.

For further information, please contact:

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