Interviews were conducted with more than 30 current and former actors in the New Zealand political system. Chapter three presents what is known about donations, access and influence, while chapter four provides a brief history of political finance in New Zealand.
The funding of political parties
Fully disclosed' or 'named' donations are finally those where the identity of the donor is not only known to the political party, but is also publicly disclosed. In the first category, New Zealand funds both individual MPs and leaders and whips.
The issues at stake
As Rowbottom puts it: "One person's greater spending and promotion of a particular view may come at the expense of another's political influence." Someone who can send a letter to just one newspaper is not in the same position as someone who can spend large sums on advertising. In the words of the UK's Phillips Review: “Healthy parties are inherently good for democracy.
Why money matters
Using Repeat Challengers to Estimate the Effect of Campaign Spending on US Election Results Sometimes questions arise about whether donations to political parties in New Zealand can really be considered problematic, given how small the amounts in the be a global context. This evidence shows that individuals are immensely susceptible to influence when applied properly.
In the words of the award-winning chronicler of the Sackler dynasty, Patrick Radden Keefe, “The people who pay for the steak dinners know what they are doing.”112. Given that political parties were not even a feature of the early New Zealand landscape, it is not surprising that the first political finance rules, contained in the Corrupt Practices Prevention Amendment Act 1895, focused instead on individual candidates. When it came to party donations, there were "absolutely no rules – it was open," in the words of the former Labor general secretary.
Political finance in New Zealand
These provisions were introduced in the Electoral Act 1902 and then remained largely the same under the Electoral Act 1956. The limit on voters' spending was raised to £500, although with inflation in the intervening 60 years this was only £26,000 dollars in today's money. In the 1980s, National's membership was estimated at 250,000, and Labor was interviewed for this report by a former chairman of the National Party who claimed that the membership largely sustained the party in its day-to-day operations, while election campaigns were funded by major corporate donations in the operation , which was known as the "business house".
As a general rule, National received donations from businesses and Labor from unions; however, many prominent businesses have donated to both, either out of an altruistic belief that the democratic system requires well-funded parties or simply to keep up with whichever was elected. banks regularly donated $5,000 (more than $10,000 in today's money) to both parties. Nevertheless, the 1986 Royal Commission on the Electoral System felt able to assert that party funding “shows no sign of corruption. And even if the Royal Commission's 1986 ruling was correct, it was overturned just a year later.
Donations: data and dollars
Furthermore, looking beyond the work of Anderson and Chapple, the funding imbalance between the left and the right seems to have widened in recent years. The imbalance is now particularly pronounced in donations. This suggests that the imbalance is not simply an artefact of the 2011-17 period when National was in government and particularly popular. Corporate donations to the Labor Party do not seem to imply endorsement of their alleged centre-left ideology,” argue Anderson and Chapple.
Finally, little is used of the protected disclosure channel, where, as above, sums can pass through the Electoral Commission so that even the party does not (theoretically) know the identity of the donor. During the research for this report, we interviewed over 30 people with participatory or expert knowledge of the political finance system. The size of the donations is very small by my standards these days, but they are treated like huge sums of money.” It is worth noting that the donations of tens of thousands of dollars were, for this donor, "very small" amounts.
The view from inside the system
Raising $2-3 million is difficult if you're raising $1,500 at a time.” Another echoed concerns about evasion: "If you stop large donations, then you encourage people to find a way out." One commented: “From a practical point of view, [the detection threshold] should not be too low. A national trade union secretary argued that unions were "one of the few structures that can compete with the many donors or high net worth corporations that come to the right of politics". In their opinion, "Lobbying is not inappropriate - but you don't know if there is something that might come of it." One former MP, while defending fundraising schemes such as the Cabinet Club or the President's Club, said: “You are telling local people that you can give the minister a voice in a more personal setting.
In their view, "it is unfortunate that the bulk of the funding is not coming from ordinary New Zealanders." Separately, the argument was made that "the weaker. A similar view was raised by a former party president who said: "The cost of a campaign is growing. A former party chairman argued: "If you're not able to raise money through membership fundraising and donation efforts, that's one of the best barometers of how you're doing." Similarly, a party leader advised that the need to attract donors "can be a good check on whether you have a good plan/proposal".
Public opinion
Recent polls provide insight into public opinion on proposals for tighter regulation of political donations and more state funding. The second provided respondents with three possible options for state funding and asked their views on each option. These differences may stem from the lack of a 'total ban' option in our study, which in the previous study not only gave respondents an additional option, but may also 'anchor' responses towards a stricter limit: the signified its presence.
To test for interdependencies between people's views on different elements of the question, we asked whether they would oppose or support increased government funding if there were tighter limits on donations. Nevertheless, 40% supported it in the first instance, although this dropped to 34% when additional information was provided. Unlike in the survey and previous research, there was not a high level of support for this proposition.
Per-vote funding
Preventing Offshore Influence by Prohibiting International Donations As with the research findings, there was universal agreement on this point. The second group was stronger about the need for policy development, claiming that this was the “cornerstone”. We then presented the focus group participants with the same three options as in the survey, and asked them to rate each on a scale of 1-10.
Tax credits
Democracy vouchers
International approaches
Although we cannot review all such practices in this report, Table 5 shows that Australian states typically regulate donations more strictly than New Zealand does at the national level. In addition, every party that gets over 2% in a general election gets half of their election expenses reimbursed by the state. That consensus has only been strengthened by incidents such as the infamous 'sponsorship scandal' of the early 2000s, in which donors were found to have been paid large sums by state-run 'slush funds'.
Together with the New Democratic Party, the Bloc Québécois and the Green Party, these parties achieved 94% of the vote received in the 2021 election. The table below shows donations and donors over the four-year election cycle (again in Canadian dollars). Figures 13 and 14 show the relationship between donations and the share of votes received in the 2021 Canadian election, and election expenses reimbursed and votes received.
Summary of concerns
International comparisons show that New Zealand takes a significantly less robust approach to the regulation of political finance than most of its peers in developed countries. Our polls and focus group data show a strong preference for parties to be transparent about their sources of funding, just like previous surveys. Our data also shows that people prefer donations to come from registered voters, not companies and unions, a change that, if adopted, would improve transparency.
New Zealand is also unusual in its approach to funding political parties, with little assistance provided to those outside parliament. Our data shows that most people would prefer political parties to receive at least some government funding in addition to donations. [Then] it will be extremely difficult to shut it down,” he writes, “given the momentum and ability of vested interests to distort democratic processes.” The USA is again a warning in this regard.179.
A potential reform architecture
It would be in line with the threshold set by roughly a third of the OECD countries surveyed above. The donor would not have given anything more than the "market" price, so there would be no donation attributable to him. This would be an example of the proverbial "balloon" effect, in which squeezing one part of a balloon simply causes it to expand elsewhere.
Therefore, in what follows, we make the most of the information available for New Zealand, combined with international comparisons. To assess the impact on the public purse, we would need to know how much of the above $8 million donation would effectively be subsidized by tax credits. The broad estimate of the costs of this system is just over $6 million, which is safely close to the estimate of the tax credit derived from Canada.
The path to reform
Appendices
Political finance regulation in 32 OECD countries
Funding of approximately USD 115 million allocated based on the number of votes received and the number of seats won in the last election. Regular funding of USD 6 million: 25% to be distributed equally among parties represented in Parliament; 75% goes to parties that received 1%+ votes in the last election, in proportion to the votes received. 86 million funds (2021) paid based on the vote to parties that received 2.5%+ of the vote in the last election or with 1+ representative elected to the Storting.
Campaign funding: 25% of the total amount is distributed equally between all parties entitled to vote, and 75% distributed in proportion to the number of votes received by parties. Total support of $81 million (2019) awarded to parties winning 2.5%+ of the vote in one of the last two general elections. Some cantons (regions) subsidize parties that win 20% of the vote and/or provide indirect aid for election advertising.
Canadian state funding and political party revenue
