Electoral finance: the principles I – Transparency

datePosted on 06:00, January 25th, 2009 by Anita

In the run up to the election there was massive hypocrisy in the right complaining about the Electoral Finance Act while simultaneously amping up the fuss around New Zealand First finances; complaining about the exploitation of loopholes that the EFA they so hate was supposed to close. So I thought I’d use this as a an opportunity to look at the principles that should underpin our electoral finance rule one by one.

One of the most serious issue raised by Jones, Glenn, the Velas, and the Spencer Trust (not to mention National’s Waitemata Trust, Ruahine Trust, and so on) is transparency. People voted for NZF (and National and Labour) without knowing who was paying their bills, without being able to assess what the funders might be expecting in return.

Would the same people have voted for NZ First in 2005 if they’d known it was being funded by Bob Jones and the racing lobby? Perhaps, but they didn’t in 2008 once they knew. National if they’d known about funding from the tobacco, pharmaceutical and insurance industries? Perhaps.

But perhaps they would have looked closer at the policies and made a decision about whose financial interests they were voting for.

What would NZ First do for the racing lobby? We have an answer.

What will National do for tobacco and pharmaceutical companies now they have the cabinet benches? We’ve already got a pretty clear idea about what they’re offering the insurance industry: profit from a privatised workplace accident compensation model, and the Herceptin decision is positioning for politicians making decisions on drug funding.

Perhaps knowing who’s bought influence would help us weigh up what to do with our votes, and it sure would help us keep the bastards honest! 

Principle I: Transparency – it is vital for democracy that we, the voters, know who is behind the candidates, who is paying their bills, who is pulling their strings.

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17 Responses to “Electoral finance: the principles I – Transparency”

  1. Lee - MWT on January 25th, 2009 at 08:12

    I agree. We must stamp out hypocracy wherever it rears its ugly head, but especially ‘the hypocracy of the right’. Which was the rationale Helen Clark used consistently during her defence of the EFA. Apparently, regardless of the points they were raising. Also regardless of the fact she had an opportunity to intorduce ‘Transparency’ into the original Bill and declined – although even that famous ‘hypocrite’ of the right David Farrer supported the principle. So, to use a ‘Hellenism’ – ‘What’s changed, MR Key?’

    ps have a great weekend.

  2. Lew on January 25th, 2009 at 09:49

    Anita: Hm, I think you’re off-base with this one. The aspects of the EFA surrounding trusts and donations were reasonably well-supported by parties including National – who (last I was aware) intends to keep them in their revised electoral funding rlegislation. Most of the objections from classical/market liberals to the EFA were on three bases (their arguments, not mine):

    1. it prevented individuals or groups from exercising the full extent of their rights to participate in the campaign, for an entire year
    2. it raised a legal barrier to substantive campaign participation, such that if a group wasn’t able to employ lawyers to vet one’s campaign actions (and as it happened, even if they were), the group could be liable to legal penalty and public ridicule – which, in election year, is a big deal
    3. it granted an unfair incumbent advantage to the government, who could continue to use ministerial and departmental resources to expound a policy programme which, in a year of restricted campaigning, was all the more valuable for lack of competition.

    Of course, there’s the argument that these were the public objections, while the private objection was that people and lobby groups and parties should be able to spend their money in service of whatever electoral aims they want – and this argument did emerge (notably from ACT).

    However, all the stuff regarding money in the EFA debate this election was a sideshow – the main act was the symbolic discourse (begun by Labour during the 2005 campaign) about freedom and transparency. National and ACT won that debate by convincing the electorate that Labour had cynically constrained everyone else’s campaign freedom to feather their own nest, and in calling for more transparency in the way they did, Labour in fact only intended to make non-government parties more transparent. National and ACT took the high moral ground by saying “ok, we also want transparency, and this ain’t it” – and there’s some validity to that position.

    Lee, is your comment intentionally unintelligible?

    L

  3. Anita on January 25th, 2009 at 09:58

    Lew writes

    Anita: Hm, I think you’re off-base with this one. The aspects of the EFA surrounding trusts and donations were reasonably well-supported by parties including National – who (last I was aware) intends to keep them in their revised electoral funding rlegislation.

    The trusts may have been the most well known of the holes in the old rules which allowed anonymous donation but EFA, as it stands, has continued a number of other loopholes (including donation splitting to below the declaration threshold, which was one of the criticisms of donations to NZF).

    National have, as far as anyone can tell, no intention of closing those other loopholes, and their likely intention is to raise a couple of the thresholds which will make the loopholes bigger.

    While on the one hand they complain about Peters hidden donations they didn’t ask for legislation that actually closes the loopholes, and appear to want to widen them. (Although widening them is probably unnecessary, when I spoke to a Nat national office staffer during the election they weren’t finding the slice-and-dice threshold so low it was a hassle).

  4. Anita on January 25th, 2009 at 10:01

    Lew,

    1. it prevented individuals or groups from exercising the full extent of their rights to participate in the campaign, for an entire year

    This baffles me, I understand that it is an effective campaign meme, but it seems so baseless that I would’ve thought the media would have examined it a little more thoroughly. Which rights do they think individuals have been prevented exercising? The ability to spend a Very Large Amount of Money on buying influence is the only one that really seems to have gone.

  5. Lew on January 25th, 2009 at 10:08

    Anita:

    TThe ability to spend a Very Large Amount of Money on buying influence is the only one that really seems to have gone.

    This is a matter of what you consider to be a Very Large Amount of Money. Argument is that $12k over the course of a whole year before you have to register and become liable for a whole lot of other regulations, or $120k for a whole year, isn’t all that much and effectively locked third parties out of many types of campaign communication. This was Labour’s major error with the EFA – they went too far. Parties would possibly have accepted it (and they wouldn’t have had the HRC against them) if they’d constrained it to, say, 90 days. But the symbolic matter of `one year in three you can’t speak truth to power’ trumped any arguments they put about transparency and openness.

    L

  6. imperial zeppelin on January 25th, 2009 at 11:52

    If our current parliamentary system is meant to operate in such a way that individuals are represented in some fashion or other, then there is no place for groups funding preferred parties, surely.

    The group/org bullhorn silences the individual. And no party can claim to represent individuals if individual voices are absent, or at best, muted.

    If all party funding came from the tax payer, the undemocratic influence of wealthy donors would be diminished.

    Still wouldn’t give us democracy, but would at least improve the system we’ve got.

    Private donations lead to governments being bought to a greater or lesser extent; the dollar vote….kind of a parody of the times when landed gentry were the only ones with the vote.

    Funding scenarios won’t offer a complete solution insofar as there are powerful actors influencing our political environment in a number of different ways.

    But it could be a start.

  7. Rich on January 25th, 2009 at 13:13

    My understanding is that National is going to repeal the EFA under urgency and will then have an extended consultation process to kick any replacement way into the long grass. So basically, it’ll be back to unlimited secret donations, unattributed smear campaigns and all the rest.

    Bet I’m right in three years time.

  8. SPC on January 25th, 2009 at 13:15

    Transparency International certainly outlined the flaws in our 2005 era electoral finance law.

    In 2005 Labour had been so desperate to counter National’s pre campaign spending throughout 2005 they responded with their tax paid funding (knowing they were warned by the AG not to) of the card.

    So their EFA tried to control party spending throughout the election year.

    And after the EB subversion of the campaign spending cap law by running negative ads against Labour and partners they brought in caps for third parties.

    It was a little like re-fighting the last war rather than developing transparency.

    National has said they support transparency. But then words mean little. National once thought the Foreshore and Seabed Act too moderate a defence of Crown ownership. In 2008 they campaigned on the basis of closing the wage gap across the Tasman, now its capping or cutting pay in the public sector.

    I personally like the idea of all party funding coming from membership dues of party members (which would exclude union funding). But at the moment party membership levels are too low and thus party funding would have to be supplemented by taxpayer funds, if all other sources were closed off. The best form of taxpayer funding is a form of matching funds – where each members dues (up to say $100) would be matched by a taxpayer top up.

  9. Anita on January 25th, 2009 at 13:24

    Rich writes,

    My understanding is that National is going to repeal the EFA under urgency and will then have an extended consultation process to kick any replacement way into the long grass.

    I’m pretty sure that as the EFA was passed into law some electoral finance provisions were removed from the Electoral Act, so any move to repeal the EFA would have to decide what to put back into the Electoral Act.

  10. Anita on January 25th, 2009 at 13:26

    SPC writes,

    I personally like the idea of all party funding coming from membership dues of party members (which would exclude union funding). But at the moment party membership levels are too low and thus party funding would have to be supplemented by taxpayer funds, if all other sources were closed off. The best form of taxpayer funding is a form of matching funds – where each members dues (up to say $100) would be matched by a taxpayer top up.

    I would feel more comfortable with this if there was a cap on membership dues. So that no individual could give more than the cap (preventing unequal influence) and no not-people (e.g. groups, companies, unions) could give at all.

  11. Anita on January 25th, 2009 at 13:28

    But mostly I just want what imperial zeppelin suggests :)

  12. SPC on January 25th, 2009 at 13:53

    I don’t see that there should be too much regulation of membership dues of political parties.

    One would imagine that parties would have categories of membership in a matching funds system.

    Standard, the full $100 level (for those willing to contribute to the level required to realise the full matching fund) and a higher level (which would include the Green MP’s puting in 10% of their pay as well) – possibly defined as $100 membership + donation. If there was no higher level, the same people would just form third party groups as vehicles for support to their favoured party.

  13. Lee - MWT on January 25th, 2009 at 14:04

    Lee, is your comment intentionally unintelligible?

    No just based on information

  14. Lew on January 25th, 2009 at 15:05

    Lee: Do you think you could explain what it means for those of us who only understand English?

    L

  15. Lee - MWT on January 25th, 2009 at 19:11

    Lew – If I am inarticulate I apologise – please try to work with me a little.
    Ok I agree that hypocracy should be stamped out regarding Transparency. However, to pick out the ‘hypocracy of the right’ when the ‘left’ were equally to blame is risible – so I was being sarcastic about that part of the post. On September 16th 2007, Helen Clark indicated in Parliament that the ‘purpose of the EFA was to ‘stop people like the Exclusive Brethren and John Key from rorting the electoral process.” which to my mind is as hypocritical as it gets. But people on the ‘left’ tend to ignore this.
    Initially, I understand that dealing to ‘anonymous’ donations and improving ‘transparency’ were fundamental to the original thinking of the EFA, but that was jettisoned by none other than – Helen Clark. Now, ‘the left’ refer to the continued use of that as ‘exploiting loopholes’ when the ‘right’ do it. To sit in judgement of the ‘hypocritical right’ when we had to endure a litany of quite smug and dismissive defences of the EFA by certain people on ‘the left’ for merely Party=political reasons, again, is another aspect of the hypocracy that pervades the debate. So, now the election is over, and the EFA has so signally failed to do what it was designed to do – ie rort the system to the advantage of the encumbent Government, and suddenly ‘the left’ want to have it re-examined, I have to ask, as Helen Clark famously did to John Key during his first day in Parliament as Leader of the National party – ‘What’s changed, Mr. Key?’
    My rather cryptic post was referring to the tendency of some on ‘the left’ to take cheap shots, such as accuse those who disagree with them as ‘hypocritical’. If we really want to move forward on this very important issue, isn’t it about time we all got over ourselves and (in the spirit of MMP, perhaps) stopped using the subject of the EFA as an opportunity to pour fuel onto the smouldering flames of our anachronistic and petty left/right spats?
    Sorry the last bit was unintelligible, but I can’t be arsed rewriting it. I personally think that NZ Electoral Law needs to be subject of a new Royal Commission, and the resultant findings should be endorsed by all sides of the House in a cross-party agreement. If this means that both ‘big business’ and ‘unions’ involvement should be addressed, then so be it. It’s worked in Canada, hasn’t it? However, I am not a fan of State-funded Elections, which, of course, nutters such as I suspect would have been part of the ‘end-game’ of the original EFA, had Labour won the last election.
    http://monkeyswithtypewriter.blogspot.com/2008/03/electoral-commission-now.html

  16. Anita on January 25th, 2009 at 19:18

    Lee write,

    Ah, if that’s what you mean… :)

    I should clarify, I don’t support the EFA as it stands, I don’t support Labour’s process for writing it (nor did I at the time), and I judge Labour just as harshly as National when it exploits the loopholes.

    As it happens I largely agree with your Royal Commission solution (although I might have preferred different structure), I think you and I would disagree with what the outcome should be, but we agree it should be a transparent public process.

  17. Lee - MWT on January 25th, 2009 at 22:38

    I thought I’d covered it all with the first post – but still….A great weekend over, so onwards and upwards.

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