Labour’s electoral finance submission

July 8th, 2009 at 4:00 pm by David Farrar

have put online their 41 page submission on electoral finance laws. I have three general points to make on it, and then will go into lots of detail.

  1. They have backed away significantly from their position on the provisions of the Electoral Finance Act, and are not supporting limits on third party expenditure etc or having the regulated period last all year.
  2. Most of what they argue for is reasonably self serving – it is what is good for Labour. In my submission I have argued for many things which I doubt National would find desirable (such as banning over $100 and requiring parties to published audited accounts). So Labour’s submission should be regarded very much as an affected party. That does not mean their arguments have no value.
  3. They make many assertions without evidence or proof. An example if their call for state funding when the evidence of 2008 is that it is not needed as both National and Labour raised enough money privately to spend to the limit.

Now into details.

Election rules should not advantage one party over another, nor should they place inequitable barriers to the formation and entry of new parties into Parliament.

Labour claim this, but the actual details of their submission do not match this. Current parliamentary parties have a huge advantage over those not in Parliament yet Labour proposes they be given even more additional state resources and further that parties not in Parliament be banned from purchasing broadcasting time.

Voter registration is one barrier to participation. From 2002 voters have been able to register up till the day before an election, and this has been an important step in improving participation. However, given that voter registration is compulsory, it should also be available on election day itself provided the normal statutory criteria for residence are met.

Good God. Never before have I heard voter registration be called a barrier to participation. That is like calling school enrolment a barrier to eduction.

Recent New Zealand political history has seen a number of occasions where significant sums provided to political parties across the spectrum have raised questions about their purpose in relation to the purchase of influence.

Yes the most recent was the revelation by the Serious Fraud Office that certain racing interests had personally paids debts on behalf of the Racing Minister in Helen Clark’s Government. Labour slammed the SFO for revealing this, and Helen Clark said she would not read the SFO evidence as she had better things to do.

This gives you some idea of how genuinely concerned Labour is by corporate influence in politics.

To better ensure transparency, the threshold for declaration of donations should be reduced to $1000 for both constituency candidates and for political parties.

The argument outlined in the Issues Paper that lower thresholds would be an unjustifiable imposition on freedom of speech is weak and contrary to the principle of transparency. It confuses the right to say what you think with the right to buy policy outcomes without disclosing your interest.

This is an example of Labour failing to back up their assertions with a shred of evidence. What evidence do they have that the current $10,000 limit allows people to buy policy outcomes? Are they speaking from experience?

They need to justify why the disclosure level should be lowered from $10,000 to $1,000.  In other words why should someone not be able to privately donate $1,500? Do they seriously assert you can buy policies or MPs for say $1,500?

$1,000 represents around 0.05% of a major party’s total election year expenditure. Are Labour really saying funding 0.05% of annual expenditure gets influence?

I’m not saying that $10,000 is the perfect limit – but I want a rational reason why why donors who give less than that should sacrifice their privacy?

The current provisions on protected anonymous donations should remain.

This is very self serving of Labour. Having railed against big undisclosed donations, they now say they want to continue the regime where a major donor can give $36,000 to them anonymously through the Electoral Commission. I advocate there should be no anonymous donations (above a minor level such as $100) as it is near impossible to prove or disprove that the party doesn’t actually get to know who donated the money. The protected anonymous donations regime should bs scrapped.

So everyone should remember this – Labour’s official position is to allow for $240,000 of anonymous donations per political party. They are for anonymous donations – not against them.

Overseas donations should be banned completely (except for New Zealand citizens, residents or voters for the time being overseas).

I have no problems with donations from any legal source, so long as they are disclosed if significant. It is ironic that we will accept $127 million donation of art work from Julian Robertson, but claim it is corruption if he donates $1,100 to a party. People can care about New Zealand without being citizens.

But having said that, I’m not greatly fussed either way. However if one is to ban overseas donations – ban all of them – can anyone not on the electoral roll(and over 18) from donating.

There should there be a limit on donations from a single source of $100,000 over a three year period. This limit should be inflation adjusted every three years.

This is from the party that took $500,000 from Owen Glenn. Think that would be their position if he still liked them?

Again Labour fail to make a case for their preference. What is the harm done by someone openly donating $120,000 (say $40,000 a year) to their preferred party. Transparency is crucial, and these should be publicly disclosed so the public can decide on whether or not they have a problem with said donations. Trust the public I say.

If Greenpeace International wanted to donate $150,000 to the Green Party, I would say let them. We should all know about it – so we can decide what we think that means in terms of desirability of supporting the Greens.

Political parties should be required to provide annual audited accounts with itemised categories of donations income so that actual income can be compared with declared donations.

Now this one I agree on, and in fact am very pleased to see Labour advocating it. After the NZ First funding revelations I concluded some sort of audited accounts with donations grouped by size is desirable. I only want the names of those who donate more than $10,000 (as that is level influence may be a factor) but it would be useful to see how many donations between say $1,000 and $10,000 are received. This allows the public to decide if (for example) NZ First’s claims of being all funded by cake stalls was the reality or not.

In election year, donations received by a party after its last annual return to the Electoral Commission should be publicly declared through the Commission on a regular basis after they are received, and up to and during the regulated election period.

This is one issue I forgot to cover in my submission. I actually think donations should be declared monthly during the whole three yearly cycle, and weekly or daily during the last month – we should know about donations when they are made, and always in advance of an election.

So I agree with Labour here, but think they do not go far enough.

The Labour Party believes that the corollary of tightened controls on private funding of political parties – with the greater disclosure and compliance requirements involved – is some provision of public funds for political parties.

Again Labour have failed to prove there is a problem. The Electoral Finance Act brought in much tighter controls on donations, yet both Labour and National spent to the limit. Both were able to raise all the money they needed privately.

Labour want state funding on the basis, there *may* be a problem in the future with inadequate private funding. Not good enough. The 2008 election has shown that there was no shortage of private funding, and Labour’s attempt to gain (even greater) state funding is sheer opportunism.

Both the registered party and parliamentary party contribute to the formation of policy on which the voters base their choice. The accountability provisions in the also devolve to the registered extra-parliamentary party.

Public funding would contribute to the independence of the extra-parliamentary party by providing a balance and the avoidance of parliamentary capture.

This is hogwash. The opposite is the case. One of the few accountabilities that the main party has over the parliamentary party is that they raise the money. This is why parliamentary parties suffer consequences if they ignore their membership.

You bring in state funding, and it allows the parliamentary party to marginalise even further the organisational party.

In our view, a base level of public funding should be available to parties who meet the statutory criteria of 500 members and contesting seats in Parliament. Currently the only available form of public funding for such parties is provided through the Broadcasting Act 1989, which on its own is clearly insufficient.

Parties outside Parliament are massively disadvantaged. But giving Labour $800,000 a year and the Alliance $2,000 a year is not going to change that – in fact it will make it far worse.

My proposal to help parties outside Parliament, is that the broadcasting allocation be restricted to non parliamentary parties only. The parties in Parliament get three years of broadcasting exposure through the media for free.

Broadcast advertising is the primary means that wealth-based electoral systems use to influence opinion.

What decade are they in? How many people even watch TV ads now? Heard of My Sky. Broadcast advertising is no longer as dominant as it once was.

The limitation of broadcast advertising to allocated public funds is an excellent feature of New Zealand’s political system and should be retained.

Far from being excellent, it is a travesty. If a party registers late in the piece they are banned from broadcast advertising. The current rules not only give National and Labour more money for broadcast advertising – but they ban the other parties from being able to spend as much as them with their own money. This is not a level playing field – it is one that favours the two main parties massively.

It may be preferable for the cost of the time allocation to be added to the broadcasting allocation and the time allocation discontinued and replaced with funding that can be used to buy time as best suits the parties. This would allow for freer use by political parties of the resource for broadcast advertising.

Here I agree. But again the hypocrisy – they are saying a party should not be allowed to (for example) spent $50,000 less on billboards and $50,000 more on radio advertising but they are saying parties should have freer use of broadcast advertising. Inconsistent.

Political parties should not be able to purchase broadcasting time with their own resources. This will only serve to advantage parties with access to money.

Nonsense so long as you still have an overall spending limit. The current law gives National and Labour a bigger spending limit that all the other parties as they can’t purchase broadcasting time beyond the allocation. This is about protecting Labour’s statutory advantage.

It must be made clear in the Electoral Act that no spending authorised for parliamentary purposes by Parliamentary Service rules can be counted as election expenses under the Electoral Act.

And this is what they tried to do with the Electoral Finance Act. They want to have the pledge card not count as an election expense. They want to be able to spend say $1.5 million in the final week of the election on “parliamentary publications” and not have it count as an election expense.

I go the opposite direction. During the regulated period, there should be a ban on parliamentary funding of advertising except essential advertising such as office hours.

You see what I mean about how self serving Labour’s submission is. They want to keep their anonymous donations. They want more state funding. They want to stop competitors from buying broadcasting time and they want to be able to spend thir parliamentary budget as late as they like durign an election campaign and not have it count as an expense.

The current limits for constituency candidates ($20,000) and political parties (a maximum of $2.4 million, if all electorates are contested) should be retained but be inflation adjusted (from the 2008 limits as a base) before the 2011 election.

Again Labour make assertions with no emperical basis to them. Mr argument is that the spending limits should be set high enough to allow an affective communication with the public, yet below the level at which you may be seen as “drowning out” others.

$20,000 is totally inadequate for being able to communicate with 45,000 voters. It doesn’t even allow one direct mail letter.

The 1996 limits should at a minimum be adjusted for inflation and population growth. Ideally though, as I submitted, there should eb an attempt to actually calculate what is a reasonable or desirable amount of communication from candidates and parties, cost it and then set the limit high enough to allow that. Don’t guess at what the limit should be – calculate it.

The extension of the regulated period in the Electoral Finance Act to the beginning of the calendar year in which an election takes place added greatly to compliance requirements.

And whose idea was that? Credit I suppose for admitting it was a disaster.

Considering the pattern of the last 25 years, a reasonable fixed date for the start of the regulated period would be 1 May of election year.

I am not against a fixed start date but 1 May is far too early. You have not even had the budget by then. I like the proposal of 90 days before the term of Parliament expires – which will be a known date. If a fixed date I would never go earlier than 1 July.

Provision would need to be made for where a particularly early election was called. We suggest that in the case of an election date being announced earlier than 30 April, the regulated period begin the day after the announcement.

Yes, The regulated period should never be retrospective.

The atomistic redefinition in the Electoral Finance Act (section 5) of “any form of words or graphics, or both” proved problematic.

And we warned against it.

The true name and address of those who promote election advertising should be disclosed.

Yes, but this need not be on the advertisement. The Electoral Commission could have on its website contact details for political parties, candidates, and registered third parties.

Where the third party campaign is issue based and does not seek to promote a vote for or against a particular party or candidate, we do not propose any spending cap but do propose transparency above, say, $100,000 of spending.

This is a better position than the EFA. Transparency is key I agree.

However they seemed to have not covered what rules should apply to advertisements against a party or candidate? Are they sayign these should be banned?

I think everyone accepts you can’t advertise urging a vote for National without National’s permission. But what say you wish to advocate people do not vote for ACT? Are Labour saying this should be banned?

Consequently, parallel campaigners should be regulated if they propose to spend over a specified threshold, say $100,000. They should be required to register with the Electoral Commission, and a list of all such parallel campaigners should be made public, as should their donors.

As I said this is an improvement on the EFA.

The financial agent provisions from Electoral Finance Act should be
reinstated – accountability is only possible if responsibility is clearly
defined.

I tend to agree. But I also worry that parties often get off the hook by claiming x did this without y knowing, so hence no prosecution. This helped get Labour off the pledge card. I propose that parties themselves can also be held liable for breaches. So if they have crummy systems which leads too a breach, they get pinged.

Consideration should be given to reforming and amalgamating the electoral oversight agencies, and giving the oversight agency power to obtain further information about parties’ accounts. This is especially the case if additional state funding is made available to registered parties.

Amalgamation is well overdue.

The role of the Police should be retained for prosecution referrals.

No no no no no do. They don’t want the job. They don’t dedicate sufficient resource to it. They don’t have the expertise and in 2005 especially they made some appalling decisions.

Wow this is a long post. I am looking forward to the pubishing of the other submissions, or a summary of them.

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17 Responses to “Labour’s electoral finance submission”

  1. david (2,563 comments) says:

    what is it with labour and Parliamentary Services? They continue to try and perpetate the myth that PS are an approval agency with supervisory powers to decide esoteric issues such as relevance for “parliamentary ” vs “electoral” purposes. Is it that they see PS as being able to be compromised to their advantage in the event that they will, one day, be the Goverment going into an election for a second term?
    No mention of PS needing to be beefed up to prevent rorting though in their submission.

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  2. davidp (3,587 comments) says:

    I think transparency would be improved if the government were forced to publish a list of all the criminals that it had approved residency and citizenship for in return for donations, along with the size of the donation. I can’t imagine Labour supporting such a policy.

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  3. Ryan Sproull (7,279 comments) says:

    What decade are they in? How many people even watch TV ads now?

    As a quick note on this, all TV election ads are subtitled by my excellent old posse at TVNZ Captioning, and it’s a prime source of interaction with elections for hearing-impaired NZers – which is a significant number.

    [DPF: I suspect hearing impaired NZers also read newspapers and the Internet]

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  4. Adolf Fiinkensein (2,917 comments) says:

    Ahaaah! Labour’s new constituency. They’ve seen off the Maoris, the Christians, the Monarchists, the Accountants, the golfers, everyone earning over $40k so who do they turn to?

    The deaf, the blind and the dumb.

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  5. Nicholas O'Kane (168 comments) says:

    “To better ensure transparency, the threshold for declaration of donations should be reduced to $1000 for both constituency candidates and for political parties.”
    Looks good on principle, until I started laughing when I read:
    “The current provisions on protected anonymous donations should remain”

    What principles do these people have? And this from the same party that rallied against big anonymous donations, trumpeted the Hagar book, and attacked national for being funded by secret donors.

    The hypocrisy and lack of principle is utterly astounding.

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  6. Kimble (4,443 comments) says:

    “and it’s a prime source of interaction with elections for hearing-impaired NZers”

    It really is a shame that New Zealand doesnt have some sort of physical, perhaps printed, medium of communication.

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  7. Nicholas O'Kane (168 comments) says:

    Just remember that if Labour wins in 2011 they will implement many of these policies.

    The electoral finance act may yet come back from the dead. And I guess the free speech coalition should still exist in 2011 to make sure they stay in opposition until they change (or instead get0 some principles on this issue.

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  8. wreck1080 (3,956 comments) says:

    Labour pricks.

    They’re happy to index donations to annual inflation, but not for income tax thresholds to be linked similarly.

    The greedy greedy greedy greedy little pigs!!!

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  9. F E Smith (3,307 comments) says:

    I agree that the Police should not have responsibility for prosecuting electoral finance breaches. That should lie with the Electoral Commission. Prosecuting is not difficult as they already have all of the necessary evidence when they recommend prosecution to the Police. The Police have shown with the current set of Electoral Commission recommendations and the Brash emails that if they see a matter as unimportant, or just simply to be political (which I suppose means Labour may have done something wrong) then they simply drag their heels until they say it is a moot point so no point in doing more.

    If the Electoral Commission feels nervous about doing it themselves they can always instruct counsel. There are plenty of barristers who could do the job, or they could instruct the Crown Solicitor for the region where the charges need to be laid.

    Why is it that these whingers always go on about not buying an election but then celebrate Obama winning in the US and Rudd winning in OZ when both spent megabucks more than their more conservative opponents?

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  10. calendar girl (1,264 comments) says:

    Well reasoned, DPF.

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  11. AG (1,831 comments) says:

    FE Smith (and DPF),

    The problem with giving the Electoral Commission the job of prosecuting is that you would then have to set up within the Commission a team of dedicated investigators to do the job. (It simply isn’t true that “they already have all of the necessary evidence when they recommend prosecution to the Police” – they may have enough prima facie evidence to believe an offence may have been committed (which is what the present statutory test requires), but you and I well know that level of “evidence” is a long way short of gaining a conviction!) And once you set up a team of dedicated investigators, then they will need to justify their existence. And if there aren’t enough important (or “real”) offences to pursue, then they will have to justify their existence by hitting minor (or “fake”) offences. Which will result in a lot of court time and wasted resources spent chasing old Mrs Murgatroyd for giving $150 without declaring her identity (on DPF’s preferred rules), or the Secretary of the 99 MP Party ’cause on the party’s election expense return he incorrectly named the person the party used to print its pamphlets. Bottom line – set up a new hammer, and you’ll find it looking for a whole lot of nails.
    As for the point that the Police don’t want the job – neither does the Commission! So that’s a wash.

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  12. reid (16,632 comments) says:

    [Liarbore] Election rules should not advantage one party over another, nor should they place inequitable barriers to the formation and entry of new parties into Parliament.

    [DPF] Labour claim this, but the actual details of their submission do not match this. Current parliamentary parties have a huge advantage over those not in Parliament yet Labour proposes they be given even more additional state resources and further that parties not in Parliament be banned from purchasing broadcasting time.

    Hence the first syllable in their party’s name: Liarbore. Strangely, even some of their own MPs still get confused by this. You’d think they knew what they were signing up to.

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  13. Chris Diack (748 comments) says:

    AG is right.

    DPF is a bit hard on Labour on the anonymous donations they are an important safety valve in a close society like New Zealand when Governments can tend to get a bit bossy. There is almost a hysteria about this issue.

    The current system with the Electoral Commission has deficiencies however one being that it isn’t actually anonymous in the sense that the donors are known to an agency of the State.

    He is right to call Labour out on the disgraceful broadcasting allocation system – it will be interesting to see who in Parliament actually support it.

    However Labour are right on the prosecutions issue –this should be left to the discretion of the NZ Police they are a branch of the Executive that is used to and set up for exercising this discretion. If there is a problem with the law being hard to enforce – clean up the drafting of the law. If there is a problem with the Police understanding the law – up the training.

    The danger with a specialist prosecutor is that to justify its budget and existence we will get more prosecutions – that is the last thing we need – they will add to cycle of even more regulation. And having the prosecution decision with the Electoral Commission incentivises the Commission to be over zealous especially if they get DPF’s rule making powers.

    We need to get a grip and keep things in proportion – pledge cards and pamphlet authorisations are hardly capital offences.

    At any rate these is another obvious way to guard against decisions not to prosecute due to error of law and that is to allow a private prosecution with leave of a judge who is there to guard against over use.

    I cannot understand why some on the right clamour to prosecute what are in most cases political offences which aren’t in the great scheme of things that important.

    Over all Labour get a bare pass mark – no real new thinking. Thanks again to DPF for posting these.

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  14. Sean (301 comments) says:

    I have a suggested amendment: “To better ensure transparency, no donation under as defined in this Act may be made by any entity registered in accordance with the provisions of the Employment Contracts Act”….

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  15. Michaels (1,318 comments) says:

    Maybe The National Party could make it law that The Labour Party and their side kick Jim, The Greens and Winston First are all illegal. This would work :)

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  16. david (2,563 comments) says:

    Instead of the Police being the prosecuting agency, it could easily be added to the SFO’s little catch-bag of offences to take on. That might make a few miscreants wake up and smell the roses!

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