Public wants parties to come clean

21:39, Aug 16 2014
John Key at dinner
MONEY SHOT: Prime Minister John Key poses for photos with supporters at a National Party fundraising dinner this month.

Reflecting on a political campaign featuring a convicted criminal wanted by the FBI and a humourless chap who doubts the moon landings happened, both hurling millions at the election, Massey University's Grant Duncan has one question: "Should political parties be something rich people can buy and use in the same way they can very fancy sports cars?"

For Duncan, the influence of Kim Dotcom and Colin Craig suggests it's time for a good think about how our political system is funded - and they're just the donors we know about.

In a poll commissioned for the Sunday Star-Times, 68 per cent of respondents say they would welcome a law change to make all political donations public.

Click here to see full graphics

Anything under $15,000 can be donated anonymously, and other loopholes exist to keep donors' names out of the public domain.

Today, the Star-Times launches a campaign calling for every donation, big or small, to be disclosed.


Labour leader David Cunliffe is one of the MPs open to something like that.

"A lot of New Zealanders are becoming increasingly concerned about what they are learning about the influence of big money in politics - whether single donors like Colin Craig and Kim Dotcom, or the pervasive influence of large corporates."

The rules around how politicians can get their money date to 1858, when candidates were first banned from "treating" voters. In 1895, funding returns were introduced.

A century later, a donor's register and expenses limits came in. Now, parties face caps on electoral advertising, and can use only state funding for broadcast adverts and must declare all major donations within a month of their receipt.

But the laws could be tighter. Greens co-leader Russel Norman would like a cap of $30,000 a year for individual donors and a $1000 anonymity threshold.

At present, says Otago University political lecturer Andrew Geddis, our threshold is high, both in international terms, but also given that our size means elections are comparatively cheap to contest.

But National President Peter Goodfellow said disclosing all donations would have a "hugely damaging impact on genuine involvement in political participation and party membership".

National leader John Key says the broad principle of transparency is for the most part sensible. "But it does have perverse outcomes - it deters good people from donating because they get very fearful of the repercussions.

"For a lot of people the increased level of transparency leads to inferences that aren't real."

So what do the donors get? "Most people donate to us because they believe in the causes - they fundamentally want a centre-right government or a centre-left one. They aren't after a particular favour or thing."

The Electoral Finance Act reforms removed some of the biggest wheezes - in particular, the Waitemata Trust, a blind trust long used by National to collect anonymous cash.

But there remain ways. On Wednesday, National will charge admirers $1350 plus GST a head to dine with the prime minister at the Pullman Hotel in Auckland.

The hotel's general manager, Rob McIntyre, wouldn't talk. "We're not even allowed to admit the event is at my establishment."

But an events industry organiser said it was likely National's costs for even the swishest event would be $200 a head. The rest, then, is really an anonymous donation.

That's the low end of the scale. Restaurateur Tony Astle gave $165,000 to National from dinners at his Parnell restaurant Antoine's, by charging diners $5000.

The Astle dinners, says Norman, are wrong: "I think it is basically circumventing the spirit of the law, because the idea of the law was to make large donations transparent to the public."

There are other "aggregators" who collect donations, which are then recorded in their name only. The only clue is a tickbox on the returns which says the donation "contains contributions".

There is one, at present, unpalatable alternative: ban all donations and let the state pay. Geddis, of Otago University, says historically that has happened after a major scandal that upsets the public.

"My suspicion is that until we get that shock to the system all you'll get is people saying we don't want politicans to get more money."

Grant Duncan hints that time may not be far away.

"The average Kiwi would choke on that. But the alternative is to go out and schmooze the rich people who may get some influence as a result, and it is unfair on those parties that represent the less-wealthy sectors of society."

Many Kiwis might not know the state already part-funds politics. All parties receive grants to cover TV advertising, and are forbidden from topping up that money with their own. It prevents wall-to-wall advertising seen before elections in countries like the US and Australia and, says former Labour president Mike Williams, stops anyone from "buying" an election.

Williams says in his decade raising millions for Labour he never once was asked for policy concessions by donors: "You cannot buy policy, but you can support democracy."

The system at least discourages parties from putting too much effort into fundraising. They cannot spend their own money on broadcast advertising, for example, and there is a $3m cap on other identified election spending for parties running candidates nationwide.

That takes some of the pressure off, says Norman. "Look at Australia, where it has gone crazy because there are no caps; or Obama, the billion-dollar president. Once you have to raise huge amounts of money, the pressure goes on political parties not to upset donors."

All the extra money parties raise, because it cannot go on advertising, will instead go on staffing, research and in particular, polling: a polling-industry insider said the big parties were likely to be polling in some form every day and a telephone poll could cost $10,000 to $25,000 for a 1000-strong survey.

Yet academics have struggled to work out how much influence money really has on who we elect. Professor Thomas Stratmann at America's George Mason University found voters' evaluations of candidates were influenced by the source of their campaign funding; in a New Zealand context, for example, it's possible some voters were turned off by the Exclusive Brethren wading in on National's side in 2005.

But what the flow of money may do, says Duncan, is excommunicate the average Joe. "The danger is we end up with a kind of plutocracy, rule by the rich."

Sunday Star Times