Dr Bryce Edwards’ daily political review of New Zealand politics: Wouldn’t it be great if political parties opened their books

An unusual thing happened on Friday, when the National Party proactively released public information about the financial donations it had just received. The party said its former deputy leader, Paula Bennett, had just raised $1.8 million in donations from a handful of wealthy supporters. And she had raised the money in just three weeks. A donation of $250,000 came from New Zealand’s richest man, Graeme Hart.

The unusual part was that the party published the details of large donations publicly and early, instead of just leaving them to be silently added to the register at a later date on the Election Commission website, which would be picked up by the media later. . down the track.

Normally, parties are keen to minimize large donations from the wealthy. With the public suspecting that political parties are beholden and even corrupted by large donations, there is a reluctance to allow this information to be released.

National going ahead and publicizing their bargain involved a big element of bragging and game play. The National had to reiterate to the public that they are competitive again, after years of losing faith in the party. It was a concrete sign that they were approved and would be in solid condition to fight next year’s election.

Of course, the information was going to be made public anyway. The Elections Act of 1993 stipulates that any donation of $30,000 or more must be reported to the Election Commission within ten working days of receipt. (And although Bennett was promised the donations, National had actually only recently received the donations.)

So National made a virtue of reporting something that they had to make public anyway. Party chairman Peter Goodfellow said the donors were “open and transparent” and National wanted to “be upfront about that as well, which is why we are proactively releasing this information.” In this regard, journalist Thomas Coughlan wondered if the party was “aware of the donation scandals that clouded much of the last Parliament”.

Political parties should open their books

Nonetheless, National’s proactive statement begs the question of whether all political parties should be much more transparent and go out of their way and just open their books to the public to see how they get their money. At the moment, we only have a glimpse of how parties are funded, and there are lingering suspicions that much of party fundraising is structured to circumvent disclosure.

After all, we currently have three of the biggest political parties – National, Labor and New Zealand First – all embroiled in legal action over the donations they have received. And Te Pāti Māori is currently under police investigation over more than $320,000 in undeclared donations. Controversies over allegedly hidden donations have cast a shadow over the integrity of all political parties.

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If parties were to open their books to the public, this could be done on a voluntary basis, or could even be a condition of registration with the Electoral Commission, which allows a party to compete for the party’s vote in elections. . Such an approach of radical transparency would allow the public to have much more confidence in the integrity of the political process.

Of course, the Minister of Justice is currently undertaking a review of the law on political financing, with the stated desire to make donations more transparent. But it’s hard to have great confidence in what leads to meaningful improvements. When it was announced last year, the reaction from experts was skeptical, believing that the status quo and vested interests would be protected by the review. And the policy options explored did not seem very impressive. There is certainly nothing more radical on the table than asking the parties to open their books to the public.

There is a public interest in political parties being much more candid about their money. One has the impression that all is not well in this area and that large donations have an unfortunate impact on politicians. As always, donors are likely to support policies and parties that retain and strengthen their privileged position.

On Friday, right-wing political commentator Matthew Hooton called for more transparency in donations in his weekly Herald column. He suggested that foreign interests could influence our parties, as is happening elsewhere in the world. He points out, for example, that the usually anti-free trade New Zealand First party was exceptionally pro-trade when it entered government in 2017: deal with Russia and Belarus – at odds with its usual mercantilist stance – that he demanded that Labor enshrine him in the 2017 coalition deal.”

Hooton calls for much more openness from our parties: “It is not unreasonable to require all parties to be transparent about their campaign donations, policy-making processes and candidate selections “.

The influence of wealth on politics

The Labor Party responded to the windfall from the National by using it as leverage in its own fundraising campaign among party members and supporters. Labor general secretary Rob Salmond emailed those on the party database to say the latest $1.8million to National was ‘worrying’, and urged supporters to make a donation to help match National.

Labor will inevitably hold more fundraising events in an attempt to raise big money. Last year, the party used “cash for access” meetings in which “interactive sessions” with key ministers and the prime minister were sold for more than $2,000 a ticket.

More recently, the party has continued to sell such access to Cabinet ministers, but at a lower price and suited to the age of Covid-Zoom meetings with decision-makers, with tickets just $25. But we can expect Labor to up its game in the race for more corporate funding to match National.

Meanwhile, Act has also been very successful in raising large sums in the form of donations from the wealthy. In March, he said he raised $850,000 from a number of donors, some giving as much as $100,000, including Xero’s Rod Drury.

Immediately there was speculation as to why the large donations were due. Maori Party co-leader Rawiri Waititi pointed to Act’s policies on co-governance and suggested the party’s major donors were complicit in a racist agenda. He called for a boycott of Xero.

Many Act donors have also donated money to National. For example, Graeme Hart donated $100,000 to Act this year, in addition to the $250,000 to National. And other National donors, such as Craig Heatley and Trevor Farmer, have previously been high-level financial supporters of Act.

Some commentators have suggested that the increased amount of money going to the National is due to leader Christopher Luxon who recently announced policies such as tax cuts that will help the wealthy. Others argue that donors are more likely to reflect National’s rise in opinion polls – as money often follows success, as donors like to support parties that have a good chance of gaining access in power.

Another reason for high levels of donations to right-wing parties was advanced today by National Alignment political commentator David Farrar. He says the “most important” factor “is a deep unease with the direction of the Ardern government” felt in the business community. Farrar argues that “these large donations are coming because donors are extremely worried about what would happen to New Zealand if there were a third term of the current government.”

Farrar also points out that the levels granted to right-wing parties are unprecedented this far from an election. Referring to previous record donations in the year before an election, the $3 million just given to the National and the law is about 10 or 20 times more than usual.

Whatever the reason for large donations to political parties, there is also another fundraising area that may be even more important to political party funding: the increased financial value of MP assets. On Friday, research showed the houses of Auckland MPs from all parties had risen by $14 million in just three years. They collectively benefit from what oddly appears to be a cross-party consensus on housing policy. Thus, perhaps the personal enrichment of proprietary politicians has the greatest impact on the functioning of parties.

So while we desperately need more transparency about political donations that undoubtedly impact the policies being implemented, we also need to focus on how individual politicians are often personally enriched by those same policies. .

Background Reading on Political Donations

Bryce Edwards: Political Roundup: Will Election and Political Finance Law Reform Succeed This Time?
Bryce Edwards: Political Roundup: Money for Access to Politicians Continues
Bryce Edwards: Political overview: Maori party must be clear

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