Party Secretary handbook

Intro

This section explains the rules your party must follow when taking out loans.

A party loan is an agreement under which a lender lends money to your party

A party loan is a written or spoken agreement under which a lender lends money to your party.

The loan amount is the money the lender lends under the loan. If a lender agrees to lend money in the future, such as a revolving credit facility, the loan amount is the maximum amount your party may owe at any one time.

A registered bank lending at a commercial interest rate is not a party loan

Money that a registered bank lends your party at a commercial interest rate is not a party loan. Credit cards and overdraft facilities with registered banks are not party loans.

Registered banks are banks registered with the Reserve Bank of New Zealand. Read the full list of registered banks on the Reserve Bank’s website:

www.rbnz.govt.nz/regulation-and-supervision/banks/register

Only the party secretary can enter a loan on the party’s behalf As party secretary, only you can enter a loan on your party’s behalf.

Loans you don’t approve or record are illegal contracts

A party loan is an illegal contract under the Illegal Contracts Act 1970 if any of the following apply:

  • you didn’t approve the loan
  • someone who isn’t you entered the loan
  • you don’t keep a proper record of the loan.

Keep a record of the loans your party takes out

Take all reasonable steps to keep records of all the loans your party gets. You need to be able to track the total amounts individual lenders lend your party.

Record the following details about party loans as you enter them:

  • the lender’s name and address
  • the loan amount
  • the date you entered the loan
  • the date you need to repay the loan by, or a statement saying there’s no repayment date
  • the interest rate or rates
  • any guarantor’s name and address
  • the details of any security given for the loan.

Also keep a record of whether any loan lets the lender:

  • reduce or end the loan amount or interest
  • make any concession about repaying the loan
  • both of the above.

If you enter a loan that’s not in writing, you must keep a proper written record of the loan. 

You must report your party’s loans to us each year

You need to report to us on all your party’s loans each year as part of your annual return of donations and loans. You need to report specific details about:

  • loans over $15,000
  • series of loans from one lender, if they add up to more than $15,000.

You must also report the total number and total amount of loans that are between $1,500 and $15,000.

Send us your annual loan return by 30 April each year

We must get your return of loans by 30 April each year. The return must include:

  • loans your party took out in the previous calendar year
  • loans from earlier years that had an unpaid balance in the previous calendar year.

For example, the return you must send us by 30 April 2021 needs to include:

  • the loans your party took out in 2020
  • loans from earlier years that had an unpaid balance in 2020.

We’ll provide you with the Annual Party Donations and Loans Return form that you can use to make your return.

The form will guide you through the loan returns process

The return form includes detailed advice about how to complete your return and send it to us.

Combine loans from the same lender. You need to combine loans from the same lender on your return. Use the principal sums of the loans when you combine them.

For loans from earlier years that have unpaid balances, use the amount your party owed as at 31 December in the year you’re reporting on.

Include an auditor’s report with your loan return

You must include an auditor’s report with your annual return. Section 214D of the Electoral Act sets out the full requirements for audits of your party’s loans. The audit requirements for loan returns are similar to the audit requirements for election expenses and donations.

Send us a return even if your party doesn’t have any loans

If your party doesn’t have any loans to report, you still need to complete and send a return form with an auditor’s report. The form will tell you how to show your party has no loans.

You must track each lender’s combined loans

Your party must have a system in place to track how much each lender lends over the course of a year.

We’ll release your party’s loan returns to the public 

We’ll publish your party’s annual return on our website. Members of the public can also visit us to view the return forms. 

You must immediately report loans that are over $30,000

You must tell us immediately if your party gets more than $30,000 from a single lender, either in one loan or a series of loans within a 12-month period.

Tell us within 10 working days of getting the loan, or final loan if it’s a series of loans.

Use our return form for loans exceeding $30,000 to report the donation.

You must track each lender’s combined loans

Your party must have a system in place to track how much each lender lends, so you can immediately tell us if someone goes over $30,000. Use principal amounts when working out if a series of loans adds up to more than $30,000.

Tell us about the lender and the loan

Include the following details on the form: 

  • the lender’s name and address
  • the loan amount
  • the date you entered the loan
  • the date you need to repay the loan by, or a statement saying there’s no repayment date
  • the interest rate or rates
  • any guarantor’s name and address
  • the details of any security given for the loan.

Also include whether the loan lets the lender:

  • reduce or end the loan amount or interest
  • allow any concession about repaying the loan
  • both of the above.

Tell us if the same lender lends more than $30,000 again

Once you file your return, you must tell us if the lender lends your party more than $30,000 again within that same 12-month period.

We’ll release your returns of loans over $30,000 to the public 

We’ll publish your party’s returns of loans over $30,000 on our website. Members of the public can also visit us to view the return forms. 

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