The funding of political parties in democracies is a key aspect of the quality of that democracy, the degree to which the will of the people is represented, and the confidence the public have in the democratic process.
Some countries provide public funding to parties to create a level playing field so that elections take place without undue influence from large donors. In other jurisdictions we see a huge emphasis on private funding of politics which tends to create barriers to entry for new parties and gives enormous power to those funding, some might say buying, politicians.
You might be thinking about a certain country about now without me even mentioning them, but the United States is actually the 27th least corrupt country according to the Corruption Perceptions Index. In this index New Zealand is the least corrupt, alongside Denmark and Finland in first place.
So we’re doing well, but it is something that should be monitored and can always be improved on. To that end we currently have the Electoral Amendment Bill before our Parliament:
This bill will amend New Zealand's electoral legislation to increase transparency around political donations, extend the ability of New Zealanders overseas to vote in the 2023 General Election, and allow for the regulated election period to shift if the election date shifts.
Here is a summary of the changes the bill introduces around political donations and loans:
lowering the public disclosure threshold for donations and contributions to political parties from $15,000 to $5,000
amending the reporting requirements for donations received from the same donor in excess of $30,000 (either in one lump sum or in total over the preceding year) by reducing the threshold to $20,000, but requiring disclosure within 10 working days only in a general election year
requiring parties to report donations under $1,500 that are not made anonymously
requiring the annual return of party donations to separately state the total amount of monetary and in-kind donations received
requiring parties to disclose their financial statements
requiring candidates to publicly report on loans received to support their campaigns.
In August cabinet announced that they would add the closing of the “shadow entity” loophole to the legislation. In other words remove the farcical situation we saw with the New Zealand First Foundation.
From the Electoral (Integrity) Amendment Act 2018, which added waka jumping to the electoral act, to this electoral amendment, it is curious how much of our electoral law has been changed specifically due to New Zealand First.
The second reading of the bill took place on Tuesday evening and was passed Ayes 74 Labour 64; Green Party of Aotearoa New Zealand 10 versus Noes 40 National 30; ACT 10. The bill has now returned to committee before a third and final reading at a later date. There were some interesting things said during the speeches...
I saw the tweet and thought - well, there is no big surprise there is there? Sure some financial backers might donate for general reasons - they own a business and would prefer less regulation - minimum wage, health and safety that sort of thing. But I can well imagine larger donors from certain industries are probably looking for more specific returns for their money.
Be it business owners wanting to maximise profits, farming lobbyists who don’t want the true costs of their industry - the emissions or water pollution recognised, or large corporations wanting to extract gas or minerals, they all want something and you know who’s going to give it them? The National Party.
So why might financial backers of the National Party wish to remain anonymous?
Paul Goldsmith in his speech would have had us believe that there are a bunch of business people who want to give money to the National cause but are fearful of people knowing they support National because the mean old lefties in government won’t give them any contracts any more.
Come on guys - we know who you vote for! Who you support - it isn’t going to be a huge revelation if your donations to National or ACT are made public.
The problem is that they assume other people operate the same way they might. Looking after their mates, crony capitalism, corruption - and that’s what we’re talking about fundamentally isn’t it - corruption. If a political party is beholden to the wishes of wealthy individuals, or businesses, in a democracy then that is pretty much the definition of corruption.
National of course have had scandals over attempts to hide donations by breaking them down into smaller amounts, to avoid the law in a very cynical way. Because when it comes to the the party of Law and Order there often seems to be scant regard for following the rules themselves.
Jami Lee Ross ended his political career trying to expose such scandal, a miscalculated career-ending move unsurpassed until Gaurav Sharma shot himself in the foot. With a bazooka. Both MPs should have known you don’t go public you just go to ground and wait for the scandal to wash away as if it was never there - like Sam Uffindell.
So what did Paul Goldsmith say that caused Golriz Ghahraman to tweet that message? I checked the Hansard to see what she was referring to, and here are his exact words:
"..it actually ultimately makes politicians less accountable, because actually persuading somebody to vote for you is quite hard but persuading somebody to give you some money is even harder.”
Pretty blatant stuff, in other words - we are more accountable to people that give us money.
We know Paul, but you’re not supposed to come out and say it! As the person posting the tweet for the Greens on Facebook put it “They said the quiet bit out loud”. Oops.
The “it” Goldsmith is talking about is the public funding of political parties, removing financial interests from our political system. It isn’t hard to imagine why National might oppose a more level playing field, where elections are down to one person one vote without interference - perhaps that sounds a bit too democratic?
Whether it is large private donations or the disproportionate platform given to the views of the folks in the boardroom clearly the intent is that some voters are more influential than others - so democratic.
It is a curious coincidence that the MP who raised the issue of politicians being accountable to those who elect them is the MP that everyone knows literally asks his constituents not to vote for him, but to give their electorate vote to another party.
When ACT receive less than 5% of the party vote but win the electorate this means that the votes of the people of Epsom are essentially worth two votes as they get their party vote deciding the composition of parliament, like all other voters, and also a local MP from a related party as well. How’s the democracy?
Curiously when National and ACT complain about the Māori seats and suggest they are not democratic (they are) they never seem to mention the one electorate that has regularly produced an undemocratic result through voters gaming the system. There is nothing illegal in what they’re doing, but it is certainly not democratic.
An argument often put up by the right when the issue of political funding is discussed is that unions support the left so why is it not OK for businesses to support the right. To which I’d say - they can, they just can’t be anonymous doing so. National often demand transparency, well hello - here is a law promoting transparency in our electoral system.
Unions don’t have an issue disclosing their support and it isn’t exactly secret what they want for it - better rights and conditions for workers. There is nothing to stop a right wing organisation donating to National saying - hey we want more of a focus on leaving things to the market and less involvement from the government. Where we have an issue is when company XYZ invests money in the local candidate with an expectation of favourable treatment when it comes to contracts in return.
If a company that wants to be allowed to to undertake deep-sea oil drilling is a major sponsor of a political party - don’t you think the people voting in the election have a right to know that?
So why would someone become a financial supporter of a party? I imagine for the vast majority it’s not with an expectation of personal reward but is to do with the way they would like Aotearoa to be. Some prefer less regulation, lower taxes, less government spending, others believe there is a wider role for the state in society, stepping in where leaving it to the market just don’t work. For example minimum pay rates or regulations around construction.
Anyone remember the leaky homes nightmare than many kiwis went through as a result of deregulation of the construction industry?
In the interests of putting my mouth where my money is, full disclosure even though it is far below the threshold for declaration, I’m a member of a political party and I have contributed financially for many years. That party is the Greens and my only hope from donating is to help achieve a Labour government with a stronger Green influence - that’s it.
It was twenty three years ago yesterday that the Greens entered parliament and I have great respect for all the party co-leaders in that time - Jeanette and Rod, Russel and Metiria, Marama and James. They represent the policies and values that are important to me, and you can’t ask for more than that in a political party.
Well, some people ask for more than that - which is why we’re here.
Anyway while I’m being all non-hypocritical and open about who I contribute money to, it is probably time for a hypocritical confession. This post is about how precious the democratic process is, but I fully supported the move last week to entrench the law preventing privatisation of water assets so that it could not be changed without 60% of the vote.
When it comes to protecting water as a public good I’d say democracy can go take a great big flying jump in the lake - hopefully not near any dairy farming runoff.
Some things are more important than democracy. So yeah - I’m a hypocrite.
I imagine there are thousands of people who financially support other parties for the same reason I support the Greens. The policies of that party best fit what that person wants for New Zealand. This amendment does not impact the rights of an individual to support a party anonymously up to $5,000. This bill is about providing transparency around larger donations.
Sometimes we even see wealthy individuals donate to multiple parties, one can only imagine to curry favour with which ever side can help them. You might remember Donghua Liu who gave to both National and Labour culminating when Maurice Williamson resigned as a minister after an admission he intervened in a police investigation on Liu's behalf.
Despite all of this we still have relatively little corruption, our political system is largely free from the influence of money we see elsewhere. But that innocence, some might say naïveté, makes us quite vulnerable.
Many of us thought we wouldn’t see the level of misinformation here that has made such a mess of political processes like recent US elections or the Brexit vote. But our election next year looks like it will be rife with misinformation and people deserve to know who that is being distributed on behalf of, even if we can’t stop the false information.
Nobody is suggesting we get rid of political donations but lets have visibility of who is funding our political parties with large donations so we can consider why they are doing that when we cast our vote.
Hi all, I noticed that the read rate was very low for this newsletter, less than 10% of usual. I assumed there had perhaps been a problem sending emails out so I switched the newsletter to "public" from "paid only" to try and force a resend. Just received the following message from Substack so it looks like emails were sending after all, my apologies for any confusion caused.
"We are observing delays in our email statistics, including open rates. Email sending is unaffected. We are working to remediate the problem, and apologize for the inconvenience."
Great piece, Nick. And you're right, I joined Labour, and donate to them, for the sane reason as you with the Greens. No party gets everything right, but I'm very happy to associate myself with folks focused on the good of the many rather than the few.
Have a great Friday Eve! Stunner in Nelson.