5.1 Introduction

Amendments to the Electoral Act 1993 that came into effect on 1 January 2011 made a number of changes to the obligations and requirements on third party promoters.

Third party promoters are responsible for expenses in relation to election advertisements promoted by them that are published during the regulated period. Third party promoters no longer need to appoint a financial agent for the purposes of election expenses.

The regulated period for the 2011 General Election will start on Friday 26 August 2011 and will end on close of 25 November 2011 (the day before polling day).

5.2 Registration

The Electoral Act requires individuals or organisations that spend, or intend to spend, more than $12,000 (including GST) on election advertising during the regulated period to register as a registered promoter with the Electoral Commission (see Part 3 for details of registration).

5.3 Expenditure limits

An unregistered promoter’s advertising expenses must not exceed $12,000 (including GST) in relation to election advertisements published during the regulated period.

A registered promoter’s election expenses during the regulated period for the general election must not exceed $300,000 (including GST). It is a serious offence to spend more than this.

Not all campaign expenses are counted as election expenses. Election expenses are the costs associated with election advertisements.

5.4 Election expenses

Election expenses, in relation to a registered promoter, include any advertising expenses incurred in relation to:

• election advertisements in any medium (see section 4.2),
• that are published, or continue to be published, during the regulated period, and
• are promoted by the registered promoter.

[See section 206S Electoral Act]

Advertising expenses, in relation to registered and unregistered promoters, include:

• the cost incurred in the preparation, design, composition, printing, postage and publication of the advertisement, and
• the reasonable market value of any materials used for the advertisement, including materials provided to the third party for free or below reasonable market value.

[See section 3E Electoral Act]

Costs of food, hall hire, surveys or opinion polls, free labour, or replacing materials destroyed through no fault of the third party are not advertising expenses. The cost of any framework that supports a hoarding (other than a commercial framework) is no longer 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 or persuading voters to vote for a candidate or party then it will not be a survey or public opinion poll for the purposes of the Act. It will be an election advertisement and the costs associated with the survey are election expenses.

The Electoral Commission is happy to review a proposed script or survey and provide a view on whether or not it is an election advertisement. If it is an election 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 third party advertisement signage on campaign cars and other forms of mobile 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 election 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 a third party distributes items such as t-shirts, bumper stickers and flags before 26 August 2011 (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 5.5 for details of how the expense is apportioned).

However, 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 (see section 4.6).

Reused materials

Expenses cannot be apportioned between elections. If materials such as banners are purchased and then re-used in subsequent elections, at each subsequent election you must account for the reasonable market value of the materials as an election expense. We advise third parties to err on the side of caution when determining ‘reasonable market value’. We suggest that third parties 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 paid staff might be an expense is where the staff member is directly involved in preparing copy or artwork.

5.5 Election expenses paid for outside the regulated period

Expenses paid for or incurred either before the regulated period or after polling day must be included in the return to the extent to which they relate to election advertisements published during the regulated period.

Where a registered promoter’s advertisement is published before and during the regulated period, the registered promoter is responsible for apportioning the advertising expenses so that only a fair proportion of the expense is attributed to the regulated period.

5.6 Election expenses authorised by a candidate or party

Expenses cannot be apportioned between a candidate or party and a third party promoter. If you are authorised to publish advertising encouraging people to vote for a candidate or party, the entire cost of the advertising will form part of your election expenses. The same costs will also be an election expense of the candidate or party. You will need to provide information to the candidate or party about costs incurred.

5.7 Expenses for joint election and referendum advertisements

Expenses cannot be apportioned between joint election and referendum advertisements.

If a third party promotes an advertisement that encourages people to vote for a party and support a particular option in the referendum, the entire cost of that advertisement must be accounted for twice by the third party promoter. First as an election expense and second, as a referendum expense.

If a party authorises a third party to publish the advertisement the entire cost of the advertisement will form part of the party’s election expenses. The same costs will also need to be included as part of the third party’s election expenses and referendum expenses. See Part 6 for further information on referendum advertising.

See Appendix E for a summary of how election advertisements are to be accounted for.

5.8 Paying expenses

Invoices for election expenses must be sent to a third party within 20 working days of the official result being declared. The Electoral Commission expects that the deadline will fall on 27 January 2012 unless there are recounts.

The third party must pay any bill within 40 working days of the declaration. The Electoral Commission expects that the deadline will fall on 27 February 2012 unless there are recounts. 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.

5.9 Third party donations

A third party does not have to account for donations of money, goods or services that are given for use in the third party’s campaign.

5.10 Keeping records of expenses

Registered and unregistered promoters must take all reasonable steps to keep records of all of their election expenses. Registered promoters must keep invoices and receipts for all election expenses of $50 or more for three years after polling day.

5.11 Return of election expenses

All registered promoters who spend $100,000 or more on election advertisements published during the regulated period are required to file a return of election expenses with the Electoral Commission.

The return must be:

• made on form M41-Prom Exp GE, and
• filed by Monday 26 March 2012 (within 70 working days of polling day).

The return form is available through the Electoral Commission or at www.elections.org.nz.

The form requires the registered promoter to provide details of all election expenses incurred, including expenses incurred by any person authorised by the registered promoter.

The Electoral Commission may require a registered promoter to obtain an auditor’s report if the Commission has reasonable grounds to believe that a return may contain any false or misleading information.

Registered promoters who fail to meet these requirements are committing offences and may be referred to the New Zealand Police.

The returns are open to public inspection and will be published on www.elections.org.nz.