Political Funding – Have your say (eventually).

Written By: - Date published: 12:45 am, September 8th, 2008 - 8 comments
Categories: election funding - Tags: , , , , ,

Lynn PrenticeIn 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.

No Right Turn: Election funding: a citizens’ forum
Annette King: Terms of reference
Russell Norman: Citizens to have say on electoral matters
NBR: National would ditch electoral law panel

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.

8 comments on “Political Funding – Have your say (eventually).”

  1. Rex Widerstrom 1

    One of the most balanced assessments of the EFA I’ve seen, Lynn. Congratulations. And I’d back your call for people to have a say on what is, as you say, a vital issue.

    While I’m not the National Party or one of their supporters (I prefer to support ideas and individuals) I’d replace it (the panel, not the Act) with an unfiltered process of consultation.

    A review of MMP was promised and although it was theoretically carried out by the Select Committee, that wasn’t what people were led to believe would happen. Why not take a genuine review of that, plus political funding, plus a bunch of related issues around political process, ethics and accountability and embark on a comprehensive process of consultation?

    The form that took would itself need consultation, but might involve a “summit” for those keen enough to spend days debating the issues, a public submission process (the web would help here), meetings around the country, and so on. Then a multi-question referendum.

    With all due respect to the academics chosen, I don’t think they’re omniscient (and to be fair, I doubt any of them would claim to be) and this is too important an issue for the eventual recommendations to be put through a filter of just three people.

  2. randal 2

    meanwhile hooter and squibber hide are making a daily meal of exceptionalising every single aspect of life and poltics as if just being alive is a crime. time to do something about these little pimples on the backside of reality besides bleating on and on about technical issues the public really doesnt understand but have thrown in their faces daily by a compliant media accepting this tripe as somehow having a bearing on putting food on the table.

    capcha: “of drexel”. millken sunk them (Drexel Burnham Lambert)with junk bonds and squibber and hooter are trying to do the same here with junk policy

  3. Bill 3

    An appointed panel of ‘experts’ and a forum of 70 ‘selected’ individuals (registered voters).

    Okay, better than nothing. Maybe.

    I don’t like for one minute the top down approach in so far as appointment and selection respectively. Or the fact the forum will be ‘directed’ by the panel and that panel’s final decision will merely be ‘informed’ by the forum.

    I suspect the goal posts will be firmly set to achieve a predetermined goal.

    On a question of window dressing versus robust substantive debate…(I was going to say robust inclusive substantive debate, but the process is anything but inclusive)….my money is very much on the former. The process does not appear to allow for participation other than by those chosen.

    The conclusions are likely to already have been drawn before the process begins and ‘education’,strategy/counter argument already drawn up to pre-empt any line of enquiry not conducive to aforementioned conclusions.

  4. lprent 4

    Bill: You could be correct. That is the ‘capture’ scenario.

    However it is better and more inclusive than how the commission did it in 1986. The issue is basically how many people have any idea about electoral law and practice amongst the public. How long will it take to bring them up to the standard to understand the arguments?

    That is achievable with 70 people. It is bloody impossible when you consider the voting population. Have you looked at the understanding MMP stats that the electoral commission put out?

    The way I’m think about this is that we’ve looking at having a panel of 3 judges and a jury of 70 members. It is a proven model for bringing citizens into helping to make complex decisions. Presumably they will allow the equivalents of lawyers as well for various points of view.

    The questions comes down to:-
    1. who gets chosen to be in the jury.
    2. public submissions.
    3. who gets to put in lawyers.

    I think that it has a good probablity of being workable. But I suspect that we’d need to help focus public attention on to the process to keep it transparent and to be more than a figleaf.

  5. macro 5


    “A review of MMP was promised and although it was theoretically carried out by the Select Committee, that wasn’t what people were led to believe would happen. Why not take a genuine review of that,…”

    Actually a review of MMP was never promised. An excellent discussion on MMP was held last sunday morning on Radio National – don’t have the link but I’m sure if your interested you can find it. Interestingly all panel members considered that with a few small amendments in hindsight, MMP was much preferable to FPP. It certainly has delivered a far more representative cross section of the population, than middle-aged white males as selected by FPP. (When Richard Prebble entered Parliament there were 3 women and the rest were male. Only 4 of the 80 members were maori, the rest european.)

  6. Swampy 6

    All this nonsense about National and trusts is a distraction away from where Labour gets a lot of its support from. Unions are investing large amounts of resources in getting people out to vote in various parts of the country, for Labour of course. I think it would be a reasonable question that this should be costed out and included in the candidates’ or partys’ financial returns.

  7. lprent 7

    Of course the unions do it openly.

    We should under your ideas attribute the work of the EMA, every pentocostal church, etc to some right wing parties.

    In fact where exactly do we let this end? Or would you prefer to simply put in a law as skewed as the 1993 act?

  8. SPC 8

    It’s about time unions ended affiliation with any political party.

    Then unions should simply represent workers interests – and leave it to individual workers to join political parties. It’s not as if the essential voice of workers would change – but lets note business lobby both main parties, why should unions not do the same.

    National professes concern about lower wage rates here compared to Oz, then why should not unions make this an issue to lobby any National government on? Not as groups seen to be in Labour’s camp – but as the voice of workers.

    Ideally such a transformation of the labour movement should coincide with what Glenn called “some rationing of funding” for political parties.

    Why not a form of matching funds – whereby whatever a party collects from its paid up members (up to a $100 maximum) is matched by a taxpayer top up. If a party collected 10,000 lots of $100 that would be $1 million and topped up to $2 million.

    In Labour’s case – I am surprised there is not a policy of donating 10% of Cabinet/MP and related staff pay to the party funding (this would be between $500,000 to a million). The Greens commitment to walking the talk is made manifest in their example here.

    If otherwise party funding was limited to identified donations by members (above the $100 level) or by non members – we would have a clean and transparent system.

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