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Electoral finance part deux: have your say!

Written By: - Date published: 12:30 pm, June 23rd, 2009 - 7 comments
Categories: activism, election funding - Tags:

Guest post by Rob Salmond

It is almost time for you to send your submissions on the government’s issues document on electoral finance. Submissions are due on 26 June, here’s where you can email the submissions. This is the only time we all get to throw around options before the government comes out with its preferred set. From then on out we’ll all be reacting to them, not helping set the agenda.

So what should our electoral finance arrangements look like? There is no ‘right’ answer, which is why it is so important for the government to hear what you would like to see.

In my own submission, I make some suggestions. In short, they are:


Essentially adopt a version of the American model:

  • An overall per-person cap on annual political donations (across all parties, candidates, and parallel groups), set at the level of the average adult income (about $26k in 2008). This limit would also apply to businesses and unions, with some loophole-closing rules to prevent shenanigans, and would operate every year, not just election year.
  • All donations over $200 to be declared right away to the electoral authorities, who keep running totals for everyone.

Public funding

Essentially adopt a version of the German model:

  • A retrospective dollars-per-vote scheme for parties, where the first few votes you get are more valuable than the votes that follow. This favours new parties and small parties over large parties.
  • A top-up subsidy on privately made donations, up to a low cap. This favours parties with a large base of somewhat committed members over parties that rely on a small band of zealots.
  • Those subsidies, however, are subject to the rule that you can’t make more money off public funding than you make off private funding. This prevents too much reliance on the state and distance developing between the politicos and the public.
  • Ditch all the broadcasting allocations and requirements and such, except the ones preventing broadcasters from taking sides and ripping off parties they don’t like.


  • Keep spending limits on political parties, but increase them to take account of the lack of separate broadcasting funding.
  • No spending limits on parallel campaigns. If they can convince people to give them the money (especially in light of an overall donation cap and the structural advantages that parties enjoy), then they should get to spend it.
  • Keep existing rules on what parallel campaigns can and cannot do on television.


  • Regulated period from Queen’s Birthday weekend for normal elections (giving about a 6 month period that really only limits parties, as they are the only ones with budget constraints), from the time the election is announced for early elections. This is longer than National likely wanted but shorter than Labour tried for.
  • Introducing American-style ‘stand by your ad’ requirements.

What do you think the system should be? Is it anything like this one? If not, what direction would you take? Saying your piece in the comments is fine, but even better to write it down and send in a submission!

7 comments on “Electoral finance part deux: have your say!”

  1. Rex Widerstrom 1

    Thanks for this Rob. It’s an excellent submission and has prompted me to re-think some of my preconceptions, like opposition to any public funding of campaigns. I wasn’t aware of the German model, but it seems to have some merit. I’ll look at this in greater detail this evening.

    I still believe the system needs to somehow take account of the fact that any party which gets even 1 MP elected gets a huge advantage over those that are in the wilderness, so to speak. Not just in tangible things, like funding for staff and travel, but also less tangible but equally valuable aspects such as privileged access to the Press Gallery.

    Yet under MMP the party with the elected MP may well have received less votes than those who have no Parliamentary voice (eg Dunne’s vanity vehicle).

    The dollars-per-vote idea could be adjusted to take account of this I guess, though it still leaves the problem of a completely new party trying to gain any traction at all. Perhaps some sort of one-off boost to fight your first election?

    Also $26,000 can be a lot of money if it’s given to a campaign rather than at national or even regional level. And that could leave an individual MP feeling rather beholden. I know when someone stepped up and gave me over $6,000 I felt – and still to this day feel – incredibly grateful. I felt fairly safe accepting it because even if I’d won (in 1993) I wouldn’t have been able to influence much on their behalf and because they were retired and didn’t, on the face of it anyway, seem to have anything going on that they’d want an MP to influence anyway.

    Disclosure over $200 certainly helps, but I’d tend to have different caps at different levels.

    I’ll just end by echoing your call for everyone to submit (and set myself a reminder to do so).

  2. Rob Salmond 2

    Hi Rex – Thanks for the nice comments, and I’m glad you enjoyed the thing. If you are interested in the German financing system, they have some nice publications about it, in English, at:


    You are right that parliamentary incumbents get a large advantage over newcomers – I just don’t know the best way to deal with it. If we just start handing out cash to anyone who registers as a political party, that opens the door to some fairly shameless wastage of public money. Perhaps a system whereby new parties get access to dollars-per-vote money (as if they had been in the previous election), so long as they show up at over 1% in three reputable opinion polls? I’m not sure – we would need a list of polls that we think are kosher for a start. But certainly you are right that it is an important issue to deal with.

    I also agree that $26k is a lot of cash, especially if it all given to one organisation. If I got to be dictator and nobody was allowed to get upset with what I decide, I think I would opt for a lower limit than that. But I don’t NZers are willing to buy into Canadian-level donation limits of $1,100 per person per party. If someone proposed that I think the Free Speech banners would be up again in a hurry.

  3. RedLogix 3


    Thank you very much. Much the same sentiments as Rex, although I’ve always felt that public funding of parties was pretty much an inevitable development given how relatively few people can be arsed joining a party these days, much less actually donating to one. Essentially our political system these days is the preserve of a relatively small number of committed activists and party workers. Now while these people (most of whom are fine, sincere folk whom I have every respect and admiration for) are funded by a broad based stream of numerous supporters, they have every reason to articulate openly and clearly what they believe in, and what policies they intend implementing, in order to attract more funding.

    By contrast, when the bulk of a parties funding is sourced from a handful of sources, there is only a weak incentive to articulate their agenda. Because funding is assured, the principal motivation of a campaign is to simply to win votes, by whatever means on one day, once every three years. But that effectively excludes democratic participation and accountability all the other 1094 days of the electoral cycle. It’s no help in determining WHAT choices get put to the public, either as policy or as candidates.

    The problem with assured funding (either from private or public sources) is that it inclines Parties towards formulating their positions in isolation from their electorate. It’s all very well developing lots of rules about how Parties are to fund and conduct campaigns, but if they are all bought and paid for anyhow, leaving voters faced with a choice between two or more impalatable options on polling day, then they really haven’t solved anything… just added layers of complexity and potential game playing.

    It seems to me that underlying the whole funding/spending/campaigning issue are deeper questions of party engagement with a wider, more informed and actively committed membership base. I would guess that the total number of active members of all parties barely amounts to 1% of the whole voting electorate. That’s not good enough.

  4. Ari 4

    Personally speaking, I’d like any public funding to involve bonuses for more directly representative party democracy, eg. subsidies for holding mail ballots among members to determine party lists and policy issues, topups for parties with large amounts of members, etc… so that parties that really engage the grassroots also get their share.

    Granted, that kind of model does advantage the Greens, so it’s not exactly an entirely altruistic sense, but it would probably mean that some paler imitation of our policies would be adopted in order to pick up funding bonuses. You catch more flies with honey… (of course, this is more like getting bees to lay out honey for the flies, but that’s a very stretched metaphor 😛

  5. Rob Salmond 5


    Thanks for the comment. The argument you make about assured funding leading politicians to not care quite so much about their broad support base is a persuasive one, although I haven’t found a lot of rigourous evidence to back it up. Have you seen any? Lack of evidence notwithstanding, I think the argument remains pretty persuasive, and one of the things that attracted me to the German system of public funding was that it really is not assured. If you raise $0 privately, then you’re not entitled to any public money. So the public funding, while still public, is not assured.

    You are right about the worrying decline of partisan activism in New Zealand. Unfortunately, there is a similar decline across almost all post-industrialised democracies. (Russell Dalton and Martin Wattenberg have a good book on this). The consistency and broadness of the trend, across some politically pretty different societies, makes me suspect that it will be a difficult trend to turn around all on our own. For the short term at least, I would rather take that decline as a given and work to set campaign finance rules within that context.

  6. Rob Salmond 6


    While I share your enthusiasm for intra-party transparency and democracy up to a point, I would not want the State getting involved in financially rewarding particular forms of political party activity. That, for my taste, runs a little too close to having the State explicitly influencing the political stances of political parties. But, as I said in the main post, these things are matters and of sliding scales of taste rather than of right and wrong.

  7. Anyone knows some references about American economy,I’m about to live there for a shot time to study there ,(I’m German ) and I’d like to have an idea first.Best of luck ,for everyone.

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