In 1993, the then National government reluctantly implemented the MMP system by putting in the Electoral Act 1993. This was an act that had some serious flaws, some of which were fixed in the Electoral Finance Act of 2008.
One of the Electoral Act’s innovations appeared to be designed to make sure that the true sources of funding for political parties were always going to be dodgy because of the non-detailed reporting in anonymous trusts.
New Zealand First used the Spencer Trust in 2005 for funneling anonymous donations to itself, legal bills, electoral refunds, etc. However the major beneficiary has been the National Party who wrote the Act originally. For instance they used the Waitemata Trust to funnel about 2.3 million dollars in anonymous donations to itself for the 2005 campaign. Almost all political parties have used this anonymous trust mechanism at some time or another to shield the sources of donations from the recipients, but more importantly from the public.
Political beneficiaries of these trusts were not meant to know who the donations were from. However this is such a pathetically weak “Chinese Wall” that you’d have to treat this claim with the same high degree of skepticism as for various other failed “Chinese walls” in failed financial institutions. There are so many ways of passing the sources and expectations prior to donation. I suspect that most voters would probably consider this type of ‘protection’ with the same degree of contempt that I do.
The Electoral Finance Act 2008 tightened the rules for anonymous donations. But they are still in my opinion far too lax, inherently undemocratic, and too susceptible to abuse. The voters should know who is funding political parties.
In the ERB negotiations, the Greens pushed for and got a commitment to a “Citizens forum” to look at the electoral system, including the funding options.
After the election this should be of major concern to the politically active. In some ways this is as important as who forms the coalition after the election. It is the first time since the 1986 Royal Commission that you may get to make submissions on the electoral system in a way that isn’t a simple binary vote or done in a heated political atmosphere (although I’d expect that some on the right will attempt to create one).
If you don’t participate, it could be decades before you are able to put significant input into your electoral system.
Predictably the Nat’s have said that they’d stop the initiative if they win the government benches. Presumably they’d prefer to have their own custom written act back with all of those nice clauses that they put in for their own benefit in 1993. For all of their bleating about the EFA, I’ve never heard the National party or their supporters say what they’d actually replace it with. They criticize is the process and never put up their ideas for consideration. A good example is David Farrars comment on the legal panel.