David Hargreaves suggests that if we want to get something positive out of this week's National Party meltdown, we should urgently consider changes to the way our political parties are funded

By David Hargreaves

Even very bad things should be looked upon as an opportunity.

And if the outrageous goings-on within the National Party in the past week lead us to have a serious re-examination of the way we fund our political parties, then good will have come from bad.

But I hope we do have a look at this issue. Dispassionately. Put aside all the torrent of rubbish that's been pouring out of Parliament and really have a cold, hard look at how our political system is funded.

The reality is that the seamy atmosphere generated by the allegations around recent donations to the National Party is nothing new. There have been 'issues' before. And nobody should think that this issue is a National Party issue. Because it isn't. Nor should we think it's a problem in any way unique to New Zealand, because it sure as hell ain't. In reality we are a lot 'cleaner' than many places - but that doesn't mean we should in any way congratulate ourselves.

The system itself is one that leaves an unpleasant taste in the mouth, and always has for me.

Contributions to political parties are styled as 'donations', but really this can be a misnomer in so far as how, certainly I, consider the concept of a donation - which is to give money expecting nothing in return.

Now there's no question some political donations are made on that basis. Some of the bigger companies have a policy of giving money even-handedly to the big political parties simply to assist the political process.

Seeking influence

But there's no question also that these 'donations' can be used by those making the donation to seek influence. If a donation 'buys' the people giving the money access to the political party concerned (such as dinner at someone's house) then the opportunity is there to carry influence.

So, you get the situation in which the person making the donation wants to be able to influence proceedings - without the public at large knowing that - while the party receiving the donations doesn't want the public at large to know that they are getting money from places that might suggest they are being subjected to particular influence.

There has to be obvious concern if particular vested interests are pumping money into political parties in order to seek influence. Now that could be say religious groups. It could be people from other countries - and what if other countries are seeking to assert their so-called 'soft power'?

This all has to be taken very seriously.

We want to have every confidence that our politicians are saying and doing things because they genuinely believe those are the right things for this country - not because they are in some way beholden to people standing in shadows stuffing money into envelopes.

Wide open to corruption

I don't think this country is corrupt and I don't think our political system is corrupt. But the point is, the way it's all set up at the moment leaves us wide open to the prospect of corruption and of unscrupulous people 'making donations' that buy favour and political policies.

It's the lack of transparency about the current system that's the real problem.

I'm no fan of political parties. I'm a fan of good governance and good government. If we could do that without political parties at all, I would be delighted.

But we do have political parties and they are the ones that fight elections and they do need money.

I increasingly think 'donations' should be banned. I think it should be illegal for anybody to contribute money to a political party.

Okay. Obvious question immediately arises. In terms of how the political parties are funded, would it be possible for some sort of levy?

All right, another tax, I hear you grumble. But could we just direct maybe some of the tax take towards a realistic pool of funds that are allocated to political parties to allow them to operate? Of course, we've already got public funding for election campaigns. This would extend that concept out to the day-to-day operations of political parties.

Even-handed

It would be quite even-handed and mean that no political party would enjoy a 'moneybags' advantage over its competitor. I mean, if one looks at the US Presidential elections, it often seems to come down to who is the biggest whiz at getting donors to cough up. It's not quite 'buying' victory, but possibly quite close.

There would be problems with my suggestion. How do you decide who gets how much money, for example? That's the argument we've already got when it comes to the way the system operates now. It is devilishly hard, for example, for a party outside of Parliament to get into Parliament at the moment because they don't get access to the state funding for election campaigns that parties already in Parliament do. 

We've had sugar daddies such as Colin Craig and Gareth Morgan attempting to bankroll fledgling parties into the House and failing.

So how would a system such as I suggest work for fledgling parties? Well, good question and it would require some thinking out.

I honestly think though that this is the way to go. Buy, hey, what do you think?

Our current system of 'donations' looks increasingly anachronistic. It's quaint. "Oh, my good chap, here's $500,000. No expectations on my part. You just run a jolly good party and do as you please." Yeah, right.

Let's be open and transparent. Let's be certain that when our politicians open their mouths and say things they are not parroting the words of someone who's just handed them a big fat envelope.

As I say, if some sort of solution to this problem does emerge from this week's shemozzle then good will have come from very bad.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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99 Comments

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David, thank you for sharing your views on political donations.
I'm totally with you regarding banning donations for political parties.

I have held similar views for some time and recently watched "Saving Capitalism" by Robert Reich.
https://www.youtube.com/watch?v=8T9E2DBzAaI

"democracy is a very fragile thing"

At one point in the doco, Robert Reich shares a study on political policy and how it is influenced by "large donors" compared to the average voter. It shows how little democracy is actually left in America.

dobrydan,

I have his book "Saving Capitalism' and can recommend it.

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Asking Politicans who benefits...... to change rule.......is asking too much.

Vested Interest.

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One reason why I think we should have a public referendum on the matter of full public funding (no private donations).

The regulations as they stand now, and most proposals to limit party spending, give advantage to the incumbent parties. The established parties get a lot of "free" airtime that up and coming parties never do. Also, I don't want to pay for the Greens campaigning against my values and I am sure others feel the same from the respective points of view.
It should be noted that Hillary outspent Trump by some margin and still lost.

Good column, thanks David.

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Our politicians have to be citizens to be able to stand....

......and so should the voters who elect them.

It is already illegal for funding to be from overseas but some of these donations are obviously coming from the pockets of those who may reside here as 'permanent residents' but who have their allegiance elsewhere including governments.

So change the voter rules NOW!

NZ should seriously consider the Singaporean model.

The current NZ system is just simply not geared up to produce and promote the best person to sit on top to LEAD a country.

Singapore does operate well but I doubt that it would suit us here.
Probably more suited to North Korea but Nic J. nailed it with this one.

https://www.youtube.com/watch?v=cJOmUW5QyqQ

There is no 'good' answer, otherwise, all 'democracies' like ours would be using it.
What we have is the least bad option.
Whatever is suggested to replace it will be so full of loopholes that it could be even worse....

All I can think of is footy teams and salary caps.

I like the idea of a draft and transfer windows for politicians..

I think a party must be funded ONLY by real individuals who are eligible to vote in NZ and that contribution from real individuals must be capped at a certain amount (that should be a low figure). An individuals can chose to donate to all parties if they wish so.
The parties must do with whatever fund they receive in this way.
Allowing corporations and wealthy individuals to donate significantly more is undemocratic because that give them undue influence over politicians.

So you want to contribute $100k to your favourite party, but can only send them $10,000 as your personal limit? How many friends do you have....?

You are correct that there will be ways around that. My suggestion is more a principle. I am not capable of devising a method for implementing this principle in practice in a way that is immune to misapplication. That requires brighter minds. The question is, is it a sound principle or not?

Mum, Dad, the kids, the dog, the cat and the budgie...

mmm. I am sure the dog, the cat and the budgie are not eligible for voting. And I have already conceded to the point that there are ways around a personal cap for donation.

Although I'd prefer full public funding, how easy would it be to move to an online donations system only via the Electoral Commission's website.

Donations only by individuals and all donations must be in their name as registered on the electoral roll. All donations go via online/electronic transfer to and are processed by the Electoral Commission and then passed onto the relevant party or candidate as specified in the donation.

Real-time disclosure of who donated and the amount - regardless the amount.

Here we go again. If some people don't like the way we do it BAN IT. That never fixed anything.
What needs to happen is before voting people really need to think about it. Not just tick a box.
The Big question is why can we not attract the best talent to run the country. Simple the people who have got the talent have better things to do with their time than sort out other peoples problems which were of their own making in the first place.

What a load of nonsense .. starting from the headline ( what "envelopes of money" - nothing like that is alleged ). If I want do give money to a political party of my choice it is my business .

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I disagree. You are entitled to one vote. Why should you be allowed to contribute significantly more than an average Kiwi can afford?

Following your logic my consumption of Domdom Perignon ( I wish :) ) should also be limited by law , to what an "average Kiwi" can afford.
Further , all public protest and other forms of political participation should be outlawed - average Kiwis with jobs and families have no time for that.

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no. A vote is a democratically granted right. All voters are equal as they only cast one vote and that all votes are weighed equally. It is therefore not reasonable to allow wealthy indivduals to use their wealth to undermine this equality.

Your ability to consume luxury products is a matter of your spending ability and taste (as long as you have not accumulated that wealth via illegal means).

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It is therefore not reasonable to allow wealthy individuals to use their wealth to undermine this equality.

Well said. And the more unequal a society becomes, the more disdain shown for politics/government generally.

“And the more unequal a society becomes, the more disdain shown for politics/government generally.” I’m pretty sure many socialists and communists disdained their governments as well?

Inequality is just one of the many ways a government can attract disdain.

But Believer1980 you do want to limit how much speech a person has. I think most rights are actually influenced by how much money a person has - speech, movement etc. Also, I am totally against equality of outcome as you seem to suggest. Again this benefits the incumbent parties.

No one is questioning one man one vote principle .. it is a straw man you have put up.

As to ability to influence what others may decide to do with their vote there are many ways to do that.
Contributing money is just one of them ( and not a particularly effective one ). If you are going to outlaw it you should also outlaw most other methods- such as political protest as most people have no time for it.

Political protest has achieved quite a lot, from independence movements, ending various types of discrimination, environmental progress, workers rights etc. It's harder to come up with definite benefits from large political donations, but please feel free to enlighten me.

"Achievement" is in the eye of the beholder of course...
Protest has also achieved political victories of Hitler and Mussolini of course - not just the things you listed ; it is neither good or bad by definition - just like financial donations.

From what you wrote I gather your are OK with "disproportionately" influencing the political process - as long as it is in the direction you find beneficial.

Sure, not every movement has turned out well, but it's hard to imagine the relatively fair and equal society we enjoy in the West without political protest getting us there. I'm saying in my mind political protest can be a force for good, and of course it only works if a significant mass of people come together and agree.

Pure financial donations, I'm not so confident about. It feels like an attempt to get around the awkward 'convincing people to agree with me' part of democracy, which makes me suspect that it's generally not to promote policies that are actually in the public interest.

I was not really suggesting that we ban protest - the point was that it is a ( sometimes useful , sometimes not ) form of free speech - no more or no less so as political donations.

If you are going to allow free speech ( including protest ) - and I am in favor of that you should also allow other forms of free speech ( including donations ) ; US Supreme Court hit the nail on the head .
There are many other forms that I personally do not like ( celebrity endorsements spring to mind ) - that is not a reason to ban them though.

This argument doesn't follow for me, regardless of the US Supreme Court. For example, if I'm picked up by Police I'm free to argue that I am innocent and convince them they have the wrong guy. I'm not free to offer them money to let me go. I don't quite see the equivalence that you're trying to argue.

You are not allowed to buy the Police off- but you ARE allowed to hire the best lawyer you can afford to argue for you . No different from making a political donation .

Still not sure I'm convinced by the argument "the rich can afford to escape justice so they should also be allowed to buy political influence"

So you think people should not be allowed to hire lawyers of their choice ?

Hahahaha. Not really free speech if the other guy doesn't have $100k to spare is it?

A donation in this context is nothing more than shouting over everyone else's voice.

Precisely ... there is no law against shouting over everyone else's voice - that is protest for you .

Shouting? more like using a PA system.

.. which is not illegal either..

Legal != Right.

I see .. right is what YOU think is right ?

That's not what I said. Just pointing out that because it's legal doesn't make it right

I concede to your criticism that it will be impossible to effectively minimise the undue influence. I.e. we may successfully stop a wealthy individual from directly paying the party their prefer. But how can we stop the same person from using their wealth in other ways to benefit the party?

The question is whether how a party is funded is of any significance. if yes, then banning undue direct contribution will be a meaningful measure, even though the supporters may find other avenues for channelling their support. However, if party finances are not important, then the whole discussion is moot.

paashaas,

You are quite wrong and you need only look at the US and its broken system. Big money does buy influence and opens the way for outright corruption.
Democracy is pretty robust,but needs looking after carefully. As the Roman poet Juvenal put it over 2000 years ago, Quis Custodiet,ipsos Custodiens.

Now that is just a bunch of generalities ..
I do agree with you that US system is broken - this does not necessarily mean money is the issue.

It is everyone's business if the wealthy are able to pay for policies that suit them.

Do you have any issues with the unions doing that ?

Yes. Another reason why public funding would be a much better system.

How much tax do you want people to pay.!!!

None .. they expect you to pay it .

At least we've clarified that imhenry isn't people.

But if you then wish to use that giving to leverage your interests with those politicians the it most definitely becomes my business too.

I tend to agree - however that argues for transparency of donations , not a limit or a ban on them.

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I can't believe how affordable politics is in NZ.
In most democracies $100k might get you 10 minutes of a junior ministers time.
Here it potentially gets you 2 people in parliament.

Laughable amount in the USA.

100k = chumpchange
Seat in Parliament = priceless..

Just shows you how clueless, short sighted and self interested our politicians are.

Yes its all very messy and what of the unions seeking powers to recruit members to extract fees and to then support the Labour party. Then the Greens and Labour craving for taxpayer funding for political parties. Clinton spent nearly $1bn and failed. I think these issues have been with us for a very long time within our political system. What is missing is genuine leadership with a clear workable long term vision for the country based on realities, not meaningless fuzzy platitudes, or revisiting failed ideas from the past.
The Nat's need a major overhaul starting with a declaration of just what they stand for.

s

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Unfortunately corruption has seeped in the parliament decision making specially in last 9 years as everyone was blinded by so called prosperity which was the result of money laundering / safe heaven.

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Just me or did Ross get on like a house on fire with the previous National setup (Key, Joyce etc) - so if like is attracted to like, what might it suggest about the last 9 years of government?

Key knew as much about money manipulation as the rest of his lot put together or he would not have made his tens of millions in the first place.

How long do you think Key knew about the poor conduct of Ross?

Yes state funding may help, but at the end of the day it comes down to the honesty of our society. No matter what system you put in place, if we have politicians who are open to corruption, then the corrupters will find a way around it. The recent arrivals from China seem to be the source of our problems (coupled with a whole bunch of National MPs who are very open to these very questionable arrangements) Will Labour be any better now that they are in power. One would like to hope so but probably not.
I suspect that this problem with National is just the tip of the iceberg and I hope that it all comes out. I would not be surprised if Jamie Lee Ross goes silent suddenly, and not long down the track takes up a really plum job offered to him by one of Nationals mates. Is that what he is really after at this stage?

Agree, allowing donations only sets the stage for corruption.... check.. The parties should be fully funded, preferably out of their own wages.

I understand that is how the Greens work in part - all sitting MPs pledge/donate a percentage of their salaries to the Party.

Yes and look at the lot we have got. in their party. Help us please

Whoops sorry now where have all the politicians gone.

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If we start with cutting back the number of MP's to 75, and let's face it we do have a very high number of MP's in relation to population. The money that is saved with that can be accumulated and every 3 years dished out to the various parties. No donations needed and for that matter not allowed. They will all have a very healthy sum of money to spend on advertising.

While some may see yesterday’s debacle as a minor event, I believe it is a chance and a turning point for New Zealand.

For too long we have perpetuated the idea that we are different from the rest of the world, that we are immune to corruption and certain aspects of human nature, but now the facade is chipping away and we are finding out that we are perhaps no better.

In the last 10 years at least I have started to see a growing division between many kiwis, I have seen it in our neighborhoods, in our schools and in our work places. We are becoming more divided. The wealth gap grows, immigration continues to outgrow infrastructure and our “kiwi values” are being eroded at the core.

Parts of our democracy need an update to suit a modern and changing New Zealand, starting with more transparency. Individuals or corporations who make party donations should be made public. There is no reason why not.

Kate posted a petition that you can sign online, but is perhaps not enough. A bigger change in attitude must be made by us. We should make this issue a public referendum.

https://our.actionstation.org.nz/petitions/fix-political-donations?utm_s...

Yes, I like the idea of it going to a referendum - interesting that ActionStation say at the bottom that this petition is a first step. Perhaps they will go down that referendum route.

I hope so and thanks again, Kate.

You are taking commonsense Kate. Won't happen

Corruption is no different in this country to any other in the world. Its all about the money, the more of it the bigger the corruption problem becomes. Many people only see the materialistic side and what it buys but money is power and influence, it buys people.

Pay $100,000 and can stand for Natioanl party = 5 Million and 50 People can fight and even if 50% win can highjack the parliment.

That is peanut for China (But too much for our politicans)

This is no donation but investment. Slowly can take over the country. This is happening not only in NZ but all over Pacific.

The worst part about political donations is that they spend it all on telling us more lies.

Comment of the day.

Don't worry, you can be sure they tell lies to their donors too.

Apply here: https://www.trademe.co.nz/1806893488

TradeMe took it down.

Screenshot of the auction: https://i.imgur.com/1w4WChP.png
Screenshot of the questions: https://i.imgur.com/oYcbRLV.jpg

100% recommend a read of the questions and answers section.

Has this gone National ...or is it only for overseas Buyers.?

Is this guaranteed, as I believe you are Labouring under an old recipe...NZ First...by all means.?

Rick, that link is brilliant - recommend to everyone, esp the Q&A's
Damn... they ( trade me?), have taken it down!

Canadian stock markets are on a high..

We should have got in first....Could have been the richest country in the World.

No Dairy, no need to sell our Country to the highest buyer.....No need to import other Meth-odds from China.

We could have all been on a high...Multi-millionaires one and all.....

smokin.

https://www.marketwatch.com/story/canadian-market-celebrates-pot-stocks-...

Oh...and Tax evasion would Potty.........Who would have even cared.....Yay.

We could have all stayed at home....high as a Kite.....weeding our Gardens.

Oh well ......what's next on the Agenda.....legalise....murder by proxy...by the High and Mighty...I suppose.?

THis has got a cracking discussion going - as much as I cringe to put it forward - Political Donations should perhaps go through the IRD, thus the Donor can be quietly vetted as to their ability financially, also the handling of any tax rebate is assessed at the time. The issue could arise only those with a NZ IRD number be allowed. Following on from this perhaps be limitd only to individuals, because there must be some shareholders of Companies that may not agree to a political donation, but get no say in the matter.
Just a good forum to get these things out there.

NZ and NZ political parties court China and their connected representatives in NZ for money - while NZ slowly loses its sovereignty, independence, alignment with western values, and ability to govern freely.
What a bind!

China actively leveraging its cash globally. Look at their "investment" in Africa, Pacific Islands, and other parts of the world. Have a new port...cant aford the rent...volla its now a chinese military base.

The next stage could be the growing suppression or pushback on any critical analysis or critical commentary in universities and the media of states with command control economies. Because of the dependence on the income streams and the ownership of infrastructure and primary supply chains.

Just add a name and shame and a penalty to the current model and make anyone caught not disclosing put it into a public fund that splits equally on all parties based on their last election vote.

If we do "ban" political donations it will mean the only people who can use money to influence politicians are those rich enough to work around the rules - we will make our system less democratic. Banning things never stops them entirely, it just makes them more difficult to do and favors the more corrupt practices.

Some people think cannabis should be illegal, some people think that political donations should be illegal. I think that lots of people want to smoke dope and lots of other people want to influence politics. And am therefore absolutely positive that prohibition will fail.

Yes, agreed. A more transparent system is probably the best step we can take at the moment.

When are the next party polls released? If National Party polls don't drop, then to me it makes it quite clear that the voters and the party deserve each others company (and our country has integrity/moral compass issues).

Snap, I've been saying the same thing about the other side for the last year.

Yip - but we could probably put the Mongrel Mob in blue ties and you'd vote for them because you only see blue.

Don't live in Botany do you?

Transparency maybe the key. At the mo donations are deposited from perhaps a variety of bank accounts, around the same week or so, yet someone in the party decides a list of names and addresses to match. That sounds dodge to me. All is ultimately traceable n all, tho Westpac is hardly a non-govt affiliate. It's good the AML laws have ramped up in recent years, let's perhaps legislate all donation deposits incl IRD numbers etc n r verified with ID by relevant donation audits (added to the AML legislation) AND made public every month

This afternoon I received the following email in response to this article;


Dear Mr. Gareth Vaughan, Managing Editor, Interest.co.nz,

With regard to the article entitled “David Hargreaves suggests that if we want to get something positive out of this week's National Party meltdown, we should urgently consider changes to the way our political parties are funded” on the Interest website on China, Chinese Embassy wishes to make it clear that non-interference in other countries’ domestic affairs has always been one of the core principles in China’s foreign policy. China never uses any person to interfere in any other country’s domestic affairs. Those speculations on China’s role in New Zealand politics are totally groundless. 

Thank you for your attention,

Chinese Embassy in New Zealand


I would note David's article doesn't actually mention China.

Can't read it all due to the 100 word limit thing and blockquotes not playing nicely.

You can read it all if you hit reply btw.

We've fixed that problem, should all be readable now.