By Gareth Vaughan
New Zealand ought to change its political party funding system so it encourages politicians to connect with as many ordinary New Zealanders as possible, Max Rashbrooke argues, whilst noting it's not in political parties' interests to do so meaning such a change probably won't happen anytime soon.
Rashbrooke, a senior research fellow in the School of Government at Victoria University, spoke about political donations in a new episode of interest.co.nz's Of Interest podcast as the October 14 election looms. Rashbrooke, and his Victoria University colleague Lisa Marriott, last year published a report on political party funding in NZ called Money for Something.
Rashbrooke says work on the report gave the authors "a glimpse into quite a murky world" of access and influence. One where party leaders, including prime ministers, fund raisers and big money donors, are in each other's company through a socialisation network featuring big fundraising dinners and other encounters.
This enormous and informal access to party leaders is something the rest of us wouldn't hope to enjoy, he says.
"So there's an immense socialisation and during that process I think it's fairly obvious that the views and interests of the donors and the politicians are to some extent going to become aligned," Rashbrooke says.
One of five key recommendations from the report is for the introduction of state funding in the form of tax credits and democracy vouchers, plus lump sum payments to smaller parties.
Rashbrooke notes NZ already has state funding for political parties via a broadcasting allowance, and money for parties to run their parliamentary wings. The question is whether we would benefit from a small increase in that, when the public has "massive distrust" in the current system given research shows more than 70% of New Zealanders say they don't trust the way political parties are funded.
"The thread that I think holds together all of our recommendations is that we as New Zealanders would all be better off if we shifted from a system that relies on large amounts of money from a small number of donors to a system that relies on small amounts of money from a large number of donors. You are preserving peoples' freedom to donate to a political party of their choice, but what you're doing is creating a world where political parties aren't beholden to any one donor because no one is giving them a very large amount of money. And actually they are incentivised to go out and connect with a huge range of ordinary New Zealanders, which is what we want political parties to do," Rashbrooke says.
"Whereas the current system for their funding just encourages them to spend a huge amount of time on a small number of very wealthy people."
The report recommends a version of the Canadian system where for small donations, up to about $2,000, the donor gets a tax credit for a proportion of that donation.
"So basically through those tax credits the state is subsidising people to give small amounts to political parties, but capping the subsidy at a very low level so the incentive is just for those small donations," says Rashbrooke.
"We're talking about maybe $5 million to $6 million a year, that's it. So my pitch is for probably for less than $2 per person in New Zealand, $2 per voter, we could just clean big money out of the system completely and remove the potential for influence that it brings."
In the podcast he also talks about why he doesn't think such a change is likely in the short-term, the unprecedented situation where National and ACT are getting way more money than Labour, what a donation is, who can make one, how important donations are to political parties, what we know about the people and entities that donate and what they want, whether it's possible to draw a direct line between donations and policies, whether there's an advantage for the party or parties who raise more money, and more.
*You can find all episodes of the Of Interest podcast here.
35 Comments
Very interesting, drawing a line from donations to policy...
I'd pay $2 a year to change the system from biggest wallet wins.
Perhaps we could do something similar with media too.
There is a podcast called gaslit nation (Very American and about America) where they talk about how news articles that prove connections between people/groups/influence are removed or put behind paywalls, making it very difficult for an average person to get a clear understanding. They noted that sometimes the articles have been removed from the English version but are still there in other languages, which suggests interference at a reasonably high level.
Don’t be fooled. Voting only benefits the government and the political parties themselves, not the voter. My single vote has no real influence on the final outcome, but I still spend my spare time following politics and deciding who to vote for.
The way I see it, I’m doing the government and politicians a service by wading through the BS and deciding who is genuine and who isn’t. So really, they should be paying me!
"The USA is a perfect example of where money has completely bought out politics."
Utter nonsense .
Clinton's unsuccessful campaign ($768 million in spending) outspent Trump's successful one ($398 million) by nearly 2 to 1.
Source : https://www.washingtonpost.com/news/wonk/wp/2017/04/14/somebody-just-pu…
mainly being given to the right hand side of the spectrum
Also utter nonsense. Labour is entirely beholden to the unions, which shovel truckloads of cash their way, historically far more so than any vested interest on the "right hand side" of the spectrum. (Although admittedly this year National in particular *are* cashing in.)
"Donations" are also provided in non-monetary ways - i.e. biased media coverage (E tu union dominated workforce)
Of course 'Market Interests'. Let's ignore the fact that Wellington Airport majority-owned by Infratil are lobbying Willis like crazy to build '4 lanes to the planes' and Chris Bishop's wife was (still is?) a lobbyist for the airport. Corporate snouts in the public trough have tons more $$ to throw around than unions.
Interesting discussion Max although I have a problem with the logic though
If a party leader spends all his time focusing on a few big donors that means focusing on a small number of votes - not a winner position really
The alternative proposed is also open to abuse - as NZ First tried to do and as the unions and business entities and other organisations can also do - they raise the funds and arrange the spending outside of party processes.
I think the biggest issue right now is the way that the labour party has made what are political payments from taxpayers funds - and are still using parliamentary services budget for advertising their MP's - definitely dodgy
Transparency is essential. Similarly, I'm quite worried about all the government propaganda NGO's that are popping up everywhere. Overseas you've got the Anti Defamation League (ADL), Centre for Countering Digital Hate (CCDH), and the Institute for Strategic Dialogue (ISD). I'm sure everyone knows the ADL is being sued by Elon Musk for defamation. In New Zealand we've got Internet New Zealand which fund "The Disinformation Project" and FACT aotearoa. FACT recently tried to get Sue Grey stripped of her ability to practice law. Internet NZ was recently given 600K by the government.
These ostensibly grass roots NGOs, are in actual fact government funded sock puppets whose purpose it is to enforce orthodoxy and promulgate propaganda. This is extremely dangerous when governments start doing things like this!
I personally don't care. A party can have massive donations to try and influence people, but ultimately the voter still holds all the power. If the voter remains unconvinced by the messsage, however it is funded, then their vote won't budge. It insults the intelligence of voters to think that money matters this much.
If money was critical then some US Democrat presidents would never have been elected. Some UK Labour govts would not have been elected. Some NZ elections may have had different results. Voters are often dumb but not so dumb as to be influenced by endless repetition of political slogans.
Why is it always those of the left that want donations to be funded by the taxpayer? I certainly don't want any of my money going to the extreme left Greens or Labour. Why would I want to fund idiots?
And never lose sight of the fact that if it wasn't for Bob Jones and Greg Loveridge donating $50k between them, Labour would been pretty much defunct before the 2017 election as they couldn't afford any advertising.
The idea is that our government is not simply directed in what to do by whoever has the most money. So we don't get too many ideas like selling off our houses to overseas investors, or restarting live exports of dairy cows, or allowing bigger trucks on the roads. You know, the sort of ideas where a select few people make money in the short term, to the detriment of NZ in the long term.
By the way, your money is already going directly to Labour and Green MP's pockets.
Isn't it obvious? Those who have lots of money, assets, or for whatever reason associate with that 'team' are quite happy with the current system where big money can buy policies. People on the left are generally less keen on this kind of crony-capitalism.
The current system where politicians have to spend their time and attention going out and getting donations, using their main currency of political influence to do so, is absolutely crazy.
1. No to taking money out of taxpayers pockets to subsidise donations. Already we have far to much government involved in dollar transfers from A to B to suit someones pet solution.
2. Require each and every cent contributed to a party to be listed and published. From organisation and by whom authorised.
1. I am very happy to see contributions made as people see fit. It's a free country. But made in the full glare of disclosure and scrutiny.
Businesses paid $23B in corporate tax in FY23. One of the core principles of democracy since the 1600s is "no taxation without representation". Since businesses cant vote, why shouldnt they seek representation through lobbying and donations? Businesses should have a say in how they will be governed, taxed, and regulated - not just individuals.
And if you were going to prevent businesses from having any political influence, you should also ban all the other organisations like trade unions, environmental activists, and ideological entities like the UN. What's good for the goose is also good for the gander, right?
"we could just clean big money out of the system completely and remove the potential for influence that it brings".
The direct quote indicates that it is not money that is the problem, its the influence. Businesses simply exercise that influence through money. Other organisations exercise it differently. If you want to remove "potential for influence" you remove it for ALL organisations, whether they donate or not. Including things like the UN. Why prevent one group from exercising influence, while allowing others unfettered access to do so?
My point was that the reason given for removing donations is to remove influence. But there are other ways of exercising influence. So if the genuine purpose is to remove influence, then all organisations who seek to influence Govt should be prevented from attempting to influence policy. Not just one group (businesses) singled out. But the fact of the matter is that we allow many entities to influence Govt policy, and we don't object to them, so what is the problem with allowing donations from business?
Is paying for advertising like this not the same as a "donation"? https://www.rnz.co.nz/news/political/497258/national-decries-ctu-attack…
Business managers, shareholders and employees are able to vote for parties that represent their interests. If we stopped political donations, obviously trade unions should be prevented from donating as well (leaving them to their main role of representing their members in employee disputes, pay deals etc).
Lobbying is a different question - I'm all for banning lobbyists of all stripes although I think direct financial donations are more obviously damaging. Drawing a line may be difficult - am I still allowed to e-mail my MP? I guess the distinction could be no paid lobbyists?
I'm not sure how that turns into banning the UN...
Buisiness's can't vote, but the people who work at them can. All of the people who helped create that wealth, not just the business owner.
If the business owner is not happy about only having one vote, they need to understand democracy is about organising society to be best for all people. Not a shop where you get whatever you pay for.
Businesses are not owned by their employees, they are owned by their shareholders. A business represents their collective individual interests. Those interests might be held directly, or indirectly through managed funds, and may be local or foreign. And as you said, society should be organised to be best for all people, that includes those businesses who are responsible for employing people, paying a large chunk of tax, and contributing to the economy by providing the goods and services that everyone needs. If businesses all departed overseas because of a non-business friendly Govt, what do you think would happen to the NZ economy?
All those shareholders can vote if they live here too.
If all businesses left NZ, which is a pretty strange argument, the people still living here would start new ones. People like making money, and existing competition is a big barrier to starting a new business.
You are unashamedly arguing for extra voting rights for the wealthy, yet I am pretty sure you would be the first to be outraged at the thought of other groups getting more voting rights.
Only completely out of touch , ivory tower academics would recommend taxpayer funded political parties. It is obvious to all of us that the parties that say they will give the voters what they want, without it being too obvious that they are lying, will get the votes. The money only runs the party machines, which will always grow to be as big as their funding will allow. Taxpayer funding will most certainly improve nothing.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.