By Max Rashbrooke & Lisa Marriot*
Proposed changes to New Zealand’s political donation rules have put the spotlight on donors who give thousands and the motivations they have for their generosity. Our current research into New Zealand’s political donations system aims to shed light on this often obscure process.
Last year, just over NZ$2.73 million was donated to ten of New Zealand’s 15 registered political parties.
Current rules require the public disclosure of any donations over $15,000. The government has proposed dropping this public disclosure threshold to $1,500 (a move opposed by both the National and Act parties).
The proposed reforms to the political donation rules follow Serious Fraud Office investigations into the handling of donations received by the National, Labour and NZ First parties. All three investigations have resulted in court proceedings, with the first case just ended with the judge reserving his decision.
Given the apparent confusion and disputed legal requirements around transparency, a basic question needs to be asked: why do wealthy New Zealanders donate to political parties?
The motivation for political donations
As part of our research into political donations, we have interviewed several party donors across the political spectrum.
We asked them why they donate, whether they expect to exert any sort of influence from their donation, and what views they have on other features of the current system, such as the disclosure of their name and the size of their donation.
Our interviewees were not concerned about transparency. Having each given over $30,000, their names were published online within ten days of their donation.
All accepted this transparency as a necessary part of a democratic system. Some even believed it had positive effects, for instance in encouraging others to donate.
Self-interest or public interest?
Our interviewees’ reasons for donating varied. Most invoked some desire to “participate”. Participation took different forms – from supporting a party that had similar values to the donor, to just being part of the political process.
Perhaps unsurprisingly, academic research suggests political influence is expected from donations – although supporting existing policies is also a factor. But the donors we spoke to said they did not gain extra influence as a result of their donation, nor did they seek it.
A couple of cautions are in order, however. The fact they were willing to be interviewed by researchers may suggest our interviewees were more comfortable with their donations than other donors might be.
Second, even while insisting they did not gain extra influence, some made other comments suggesting some level of influence was a consequence of the donation. One noted interactions with multiple prime ministers and party leaders, some of them directly connected to fundraising. Such figures had, for instance, been to the donor’s house for meals.
Another donor said making a large donation would generate the opportunity to arrange a direct meeting. Even if policy is not explicitly discussed in such contexts, donors and politicians are clearly building close relationships.
These are the conditions in which the interests and beliefs of political leaders may gravitate towards those of donors, especially since ordinary voters do not generally get such privileged access.
Some donors alluded to such closeness. One said, speaking of the party to which they donate, “They are nice to me, and I’m nice to them.”
Another acknowledged that while donations were made in self-interest, “The self-interest is [seen as] public interest.” That is, donors rationalise actions designed to further their own interests by arguing this overlaps perfectly with the public interest, even though such a correlation is far from guaranteed.
Do our rules need to be more robust?
Some would argue the process for regulating donations works, evidenced by the ongoing court cases. However, those cases were triggered by whistleblowers, not because of regulatory oversight in the first instance. We cannot rely on whistleblowers to report all instances of alleged wrongdoing.
Much electoral reform work is currently taking place, including the contested changes to donation disclosure rules and a wider independent review of the Electoral Act.
With two more donations-related court cases to come this year, pressure is mounting for changes to the way political parties are funded.
Such reform appears necessary to create greater transparency about donations and ensure that trust in Aotearoa New Zealand’s political funding system is not permanently eroded.
*Max Rashbrooke, Research Associate, Institute for Governance and Policy Studies, Te Herenga Waka — Victoria University of Wellington and Lisa Marriott, Professor of Taxation, Te Herenga Waka — Victoria University of Wellington
This article is republished from The Conversation under a Creative Commons license. Read the original article.
14 Comments
I would feel better about this debate had both sides sprayed about allegations about 'rich mates' or 'union overlords' in relation to policy changes over the last couple of decades. Frankly, they seem all to happy to use this a political hobby horse to generate headlines, and thus I am immediately suspicious of anyone who suggests wholesale change, like state-funding or banning of donations.
State funding of the parties seems like an absolute no-brainer to me. For around $1 per household per year we can cut off a major source of corruption in our system.
There's a few wrinkles in how to distribute the funding to avoid embedding current political parties and keep the door open to new ideas, but I don't think it would take much work to come up with a system better than we have now where money can buy influence so easily.
I fail to see what state funding would achieve that a zero/functionally-zero (i.e. more than a raffle ticket) threshold for disclosure would achieve also, with the bonus that you're not violating principles around freedom of association, or the perverse outcomes like migrants finding themselves contributing to political activities of anti-migration parties who question their right to even be here.
Surely a total disclosure regime is workable, if not for the same reasons and logic that state funding is? People who want to break the rules will break whatever rules you put in place either way.
"...with the bonus that you're not violating principles around freedom of association.."
Except of course, donating money to a political party does not meet the NZBORA bar of freedom of association - we're in line with the UNHDR which regards this in a minimalist, negative rights context (that is, the right to associate without interference from the State, not any rights beyond that like anonymity etc.)
I'm on the fence about State political funding of parties, but IMO anything that takes anonymous donations away from politics - or the ability for any non-human entity to donate - is a good thing. A sensible ceiling of maximum per voter per year (say $100) is also highly desirable from a democratic context.
Well no it's hardly having a gun held to your head and being forced to join a trade union, but the point is I'm currently not required to fund the political activities of parties I don't agree with by way of choice (to some extent anyway, parliamentary funding aside) which seems ideal. Parties have to prove that they are genuinely interested in representing my interests before I'll go anywhere near them. Moving away from this should be a massively high bar for any proposal to clear. You only have to look at NZ First to see the quality of representation you get if a party doesn't even become accountable to its financial member and I'm not sure we want to bake that in by default.
As for a '$100 limit' - I'm all on board if we can find an equitable way to cost volunteer time or resources that associated parties like unions may choose to contribute. Usually this kind of discussion leads to third-party campaigners being very conveniently dropped from the discussion altogether.
"Well no it's hardly having a gun held to your head and being forced to join a trade union..."
...a problem that doesn't exist today either so not really relevant. The days of compulsary association are long gone.
"I'm currently not required to fund the political activities of parties I don't agree with by way of choice (to some extent anyway, parliamentary funding aside) which seems ideal. Parties have to prove that they are genuinely interested in representing my interests before I'll go anywhere near them."
100% - however, centralised funding political parties does not change this position. You could opt out (exactly as you can out of voting) and the money that you would have allocated would get pro-rated.
"I'm all on board if we can find an equitable way to cost volunteer time or resources that associated parties like unions may choose to contribute."
Totally agree in principle, but the complexity here though is the governance and the fact that people ascribe differing values to their spare/voluntary time than their waged labour. This is about getting dirty, undemocratic money out of politics - which would include resources paid for by unions "volunteering" on their employers dime - not about people having free association (as you point out).
Transparency certainly helps and I support it, but even if everyone knows about it I think we are assuming super-human powers of our Politicians to think they will be able to ignore their list of donors when deciding on policy. Are you less likely to bring in strong regulations against a sector if you know your party relies on donations from them?
When a party is funded by donations the incentives are not aligned with the population. We can easily remove those poor incentives and any appearance of corruption.
In an ideal world (without really considering the cost) I'd have every voter able to direct their share of the party funding to the party of their choice. Any unassigned funds could be spread out according to last election vote share. That way no one has to fund a party they find abhorrent and the incentive to appeal to the broad public is reinforced.
If you have a transparent method of divvying up the money fixed in legislation, I don't see this as being a problem. At its most basic you could set a fixed budget, a method to increase it e.g. by CPI each year, and a method for splitting it e.g. proportional to vote at the last general election. Not much scope for a hostile bureaucracy to interfere in that is there?
Could be worse...
As the midterm primary season rolls along, voters may have noticed a strange phenomenon of political advertising: Democrats paying for ads supporting Republican candidates.
In multiple states – including Colorado and Illinois, which hold primaries on Tuesday – Democrats have been attempting to boost far-right Republicans, under the assumption that they would be easier to beat in a general election.
https://www.npr.org/2022/06/27/1106859552/primary-illinois-colorado-rep…
The mistake here is that the population, when you actually ask their opinions, like the harder right far more than the centre right. It depends on media manipulation and artificial social imposition to beat them out of that.
Also Dems are the party of the billionaire class aligned with the poor, it makes sense for them to have more funding and to attempt to portray their enemies as radical.
Democracy is fragile and a large chuck of our planet doesn't have it. Thankfully we do, but we have paid dearly for it in blood. If you think about it, everything in our daily lives is the result of it. We should definitely fund it properly, or we deserve what we get.
You are naive if you think large donors don't expect and receive favorable policy in return. You would also be naive to think these large donations are transparent. Rules are optional for those with the wherewithal to skirt around them. We heard the taped call between Simon and Jamie. The Hollow Men revealed a million dollars of funding offered from one very large employer to try and get Don Brash elected. Labour and NZFirst are still being investigated for how donations were potentially not declared. History is littered with episodes of political corruption...someone explain to me why it wouldn't happen in NZ.
Another related thing I would like to see are ongoing audits of the finances of retired senior politicians.
"donors who give thousands and the motivations they have for their generosity."
A young uni graduate might donate for a cause, worth fighting for.
A wizened businessman does not donate for nothing.
A lobbyist survives ( and flourishes) on the coat tails of power. A "deep state", news shy, does exist.
No sir, "generosity" is too kind a word.
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