Electoral (Finance Reform and Advance Voting) Amendment Bill Submission

June 17th, 2010 at 9:01 pm by David Farrar


About the Submitter

  1. This submission is made by David Farrar in a personal capacity. I would like to appear before the Committee to speak to my submission.
  2. I have over 15 years experience with the Electoral Act.  As a former parliamentary staffer I advised National Prime Ministers and Opposition Leaders on the Act.  I have been an electorate campaign manager and a national campaign staffer, requiring intimate knowledge of the Act. I also have blogged extensively on electoral issues.

    Executive Summary

  3. I support the Electoral (Finance Reform and Advance Voting) Amendment Bill as it is an improvement upon the status quo.
  4. I am disappointed that the bill does not go further in reforming our electoral finance laws. Specifically I believe that the broadcasting allocation needs significant reform, and the electorate spending limits are unacceptably low.
  5. However I accept the wisdom of the Government’s position that no major changes from the status quo will be included, without widespread parliamentary agreement. Effectively the Government has given a veto to the Labour Party over what changes were included in the bill.
  6. I believe it is highly desirable that there be widespread consensus on electoral laws. They should not be something for an incumbent Government to unilaterally change, as the ultimate prize in a winner takes all regime. For this reason, I somewhat reluctantly accept that there will not be broadcasting reform unless the Labour Party agrees to it – even though National and ACT who both support it could reform it by themselves.
  7. It is my hope that the consensual approach taken by the Government, and specifically the Minister of Justice, is adhered to by future Governments. Just as a National-led Government has given the Labour opposition a veto over major reform, the implicit assumption is that a future Labour-led Government will do the same, and we will never be treated to a process such as we saw with the Electoral Finance Act.
  8. I obtained cabinet papers relating to this bill from the Ministry of Justice under the Official Information Act. One of the options in those papers was a significant reform package which did reform the broadcasting regime and increase spending limits, but also imposed spending caps on parallel campaigners and lowered the donation disclosure limit.
  9. That package is one I believe to be slightly superior to the consensual package that this bill is based on. It would have delivered two extra reforms that broadly speaking those of the right tend to have wanted (higher spending cap, broadcasting reform) and two reforms that broadly the left wanted (lower donation disclosure threshold, parallel campaigner spending cap).
  10. I would urge committee members to consider a more significant balanced reform package, if it has concessions from both “sides”. For example while I am strongly against parallel campaigning spending limits, I would be prepared to compromise on that if it meant that the broadcasting regime was reformed to allow parties to buy their own broadcasting.

    Regulated Period

  11. The proposed S3(B) defines the regulated period as starting the day after the default day, which will be three months before the last possible day an election can be held. There are exceptions for when an election is called early.
  12. I believe it was the intention of the Government to avoid the problem of retrospectivity in the current law (which is highly desirable), but the solution they have come up with has consequences that would in most cases dramatically shorten the regulated period. This is because the last possible date an election can be called tends to be six to seven weeks after the previous election.
  13. For example the last practical date for the next election is 7 January 2012. This means the regulated period would only start on 8 October 2012, and if the election was at the traditional late November date of 26 November 2011, the regulated period would be 49 days –almost half the normal three months. There was no policy consensus on shortening the regulated period like this.
  14. The best solution to the issue of the regulated period would be to have a fixed election date, being the last Saturday in November every third year. This would allow the start of the regulated period to be known well in advance. It would also remove the tactical advantage an incumbent PM has in setting the election date, and stop snap elections on dubious grounds such as in 2002 and 1984.
  15. If a fixed election date is not adopted, then I recommend two principles be applied to setting the regulated period. They are:
    (1) The regulated period should never be retrospective
    (2) The regulated period should, where possible, be around three months
  16. I can testify with first hand experience the grave difficulties one can have as a campaign manager, when you do not know the start date of the regulated period until you are halfway through it. It is very important it never be retrospective. Now that it seems likely that the regulated period will also apply to the definition of MPs parliamentary advertising, I am hopeful this principle will be accepted.
  17. I believe the law should be based on what will be the normal experience – an election held three years after the last election, hence the start of the regulated period should be two years and nine months after the previous election.
  18. If an election is held early, then the regulated period should start from the day after the PM announces and gazettes the election date.
  19. If for some reason the PM announces the date of the election more than three months before the general election (which may happen to avoid a by-election), then it should start from three months out.
  20. Sometimes an election is more than three years past the previous election. This allows elections to move back to their normal November date, after an early election. In these cases the regulated period will be a bit longer than three months.
  21. I have attached a table as Appendix A, which shows how long the regulated period was, or would have been, for every election since 1981 under the existing law, the bill, and my proposal. The average number of days in the regulated period under the bill is 64 days. The status quo is 92 days and my proposal 108 days.
  22. This proposal can be implemented by amending the proposed S3B(5) so that it reads “default day means the day that is two years and nine months after the last general election”, and deleting S3C.

    Meaning of election advertisement

  23. I propose two amendments to the exclusions from election advertisements in s3A(2).
  24. I propose that s3A(2)(b) have the word “solely” replaced by primarily” in relation to the purpose of a news item being for informing, enlightening or entertaining readers. A test of “solely” is too restrictive and could result in newspaper editorials being classified as election advertisements.
  25. I also propose that s3A(2)(e) have the words “on a non-commercial basis” deleted. The intent of the section is to exempt people such as bloggers from being required to register as a promoter for merely stating their personal views. The test of “personal political views” is sufficient in my opinion to exclude someone being paid to promote someone else’s views. The additional requirement of non-commercial is not defined, and could catch a blogger such as myself who receives a modest amount of advertising income through their blog

    Candidate’s Election Expenses

  26. The limit on candidate election expenses should be set high enough so that a candidate can effectively communicate to the voters in their electorate, and low enough to stop a candidate from being able to gain an unfair advantage through dominating the local media.
  27. My experience in 2005 is that the limit of $20,300 is far too low to allow a candidate to do even basic communications with the voters. It is less than 50c per adult in the electorate. Excluding GST it will be only $17,650 or around 40c per adult – not even enough to send a single direct mail letter.
  28. This is hugely disadvantageous to candidates standing against incumbent MPs, as the incumbent has the benefit of parliamentary profile and resources.
  29. I would urge the committee to ask officials to obtain specialist advice on what would constitute a reasonable electorate campaign for three months. For example it could be two direct mail letters, two unaddressed pamphlets, six quarter page ads in community newspapers, 50 hoardings, and one billboard. The spending limit should be set based on empirical costings at a level to allow the agreed upon activities. That limit should then be inflation and population adjusted.
  30. If the committee is not wanting to empirically cost what an electorate campaign should consist of, at a minimum I would ask that the limit be increased to take account of inflation since 1993. That would move the limit to $29,000.

    Party’s Election Expenses

  31. I note the limit for political parties has also not increased significantly since the early 1990s, despite inflation of 27% and population growth of 14%.
  32. I support the proposal to inflation adjust the limit going forward. I believe it would be prudent to also population adjust it. Campaign costs do increase with population.
  33. I also believe that it would be beneficial to increase it to take account of the inflation and growth since 1994. This would suggest a limit for a party contesting all electorates of $3.5 million.

    Liability for political parties

  34. I would ask the committee to consider allowing political parties to be held liable for breaches of the Act, not just individuals such as party secretaries.
  35. The current law has, in my opinion, encouraged disregard for the law, by making sure those liable are kept in the dark about certain bank accounts and trust funds. We saw this reported in 2008 with regards to the NZ First Party where the poor old party secretary was in the gun for donations and transactions she knew nothing about.


  36. I am pleased to see the requirements for parties to disclose their total amount of donations, in bands, as this will give greater transparency. I was one of those who proposed this during the policy review.
  37. It would be desirable to make clear in the proposed s6A that the “total amounts” to be disclosed in bands are the total amount of money donated, not the total amount of donations made.
  38. The current law on donations was only put in place in 2008, and has yet to go through a full electoral cycle. I think it would be premature to make conclusions on its adequacy or inadequacy until we have the benefit of a full cycle to review. It would be useful to have a full review after the 2011 election.

    Parallel Campaigners

  39. The requirement for those who spend over $12,000 on election advertisements to register with the Electoral Commission is a useful transparency measure. The Electoral Commission should ensure it has full contact details of an individual representing the promoter, including their full name, address and phone number.
  40. I do not believe there needs to be a spending cap on promoters. Apart from the fact it would be trivial to get around, it may actually encourage higher spending campaigns as a cap can become a target – as it has for political parties.
  41. The public, assisted by the media, have shown themselves very capable of deciding how much value to place on an expensive advertising campaign funded by particular individuals or groups.
  42. Sometimes there may be sound public policy reasons for a promoter to spend a lot of money on election advertising. If for example a political party passed a law confiscating property off a group of citizens. They may have had the Government rob them of $100 million of assets. They should be entitled to spend say $200,000 to campaign against the party that did that.
  43. Take another scenario. What if the Crown confiscated land or property rights off an Iwi, as they have done in the past. That Iwi might want to campaign against the party in Government which stole their land or property rights. Do we believe it would be a good thing to prevent an Iwi from campaigning against a party that legislated away its rights?


  44. I was one of the “overseas experts and interested parties” who met in Wellington on 14 May 2010 to consider improvements to the bill. A joint submission was filed on our behalf by Andrew Geddis. I endorse the recommendations made in that submission..
  45. I think the process lading to this bill has been excellent, with both a discussion paper and a proposal paper, and then a bill. I would urge this to become the standard process for future electoral finance reform.
  46. While not a major focus of mine, I do support the provisions allow advance voting without needing to justify why.

In summary I urge the Electoral Legislation Committee to recommend the Electoral (Finance Reform and Advance Voting) Amendment Bill be passed, with amendments as proposed.

David Farrar

Editorials 10 May 2010

May 10th, 2010 at 2:00 pm by David Farrar

The Herald approves of the electoral finance bill:

The Government’s long-awaited bill reforming electoral finance law solves many of the problems created by its contentious, discredited and repealed 2007 predecessor and the dated 1993 Electoral Act. …

It is better than both the EFA and the status quo. Personally I wanted to see considerably more reform, but accept the Government made a decision not to push through changes, which did not have wide parliamentary support. Effectively Labour were given a veto over the changes.

Several new measures have been raised since details of the reforms were announced in February.

The most welcome is news that a separate bill will finally be introduced to tighten the use by parties and MPs of parliamentary funds to campaign to voters. …

A bill later this year will align the parliamentary and electoral law definitions in the “regulated period” or three months before an election. Parties will no longer be able to spend parliamentary money for communications other than those that “explicitly” seek people’s support or party vote or donations or membership of their party.

News I exclusively broke here, using papers I obtained under the OIA.

The Electoral (Finance Reform and Advance Voting) Amendment Bill sets a three-month regulated period, down from the entire calendar year of an election in the 2007 law, and limits it still further if an election is called fewer than three months from polling day.

The regulated period is shorter if the election date is announced less than three months before the last possible election date, not just the actual election date. Expect to see this change at select committee.

The Dominion Post has advice for Nick Clegg:

Welcome to our world. Britain is about to face the realities of coalition government. The voters have delivered an MMP result under a first-past-the-post system, effectively leaving the Liberal Democrats to decide who gets to form the next government. It is small wonder that the New Zealand Cabinet Manual is being avidly read in Whitehall offices. …

However, Liberal Democrat leader Nick Clegg will have to be careful not to overplay his hand. His party’s tally of 57 seats is fewer than he and others expected, and he needs to be conscious that how he behaves now will play a huge role in how Britons view proportional representation.

Mr Clegg is unlikely to have a better chance to push the cause of electoral reform with the other parties than he does now while still in the role of kingmaker – at the time of writing no deals had been struck – but if he is seen as putting his party’s interests ahead of those of the country, or of seeking to be the tail that wags the dog, there will be a backlash.

As some NZ parties have found.

And the ODT looks at local government:

The pros and cons of what exactly are local government’s “core activities” continue to be debated by the public in a somewhat desultory fashion, while it is obvious central government has long embarked on providing the statutory means by which local councils can shed what might once have been regarded as essential services in favour of the private sector. …

Mr Hide’s Local Government Amendment Act 2002 Amendment Bill, which has received its first reading in Parliament and will now be further considered in select committee, enables local councils to offer tenders to private companies to provide water services for up to 35 years, essentially a technical change since councils can already take that action, but only for a 15-year period.

He has argued that the change is necessary because 15 years is not sufficient to enable an adequate return on the economic life of water assets.

In other words, his Bill is designed to make the possibility of privately contracting water services more attractive.

But even if the Bill survives without radical change, it does not necessarily mean water services will be privatised.

Indeed, councils will retain control of services should they opt to have components contracted to private providers; the restrictions on the sale of council water services in the Local Government Act 2002 remain.


Electoral Finance Reform Bill out

April 29th, 2010 at 3:04 pm by David Farrar

The Government has released its Electoral Finance Reform Bill. Have just started reading it myself.

Mainly based on previous cabinet paper. One significant change is they have changed the regulated period definition so that it can never be retrospective (which is very important). So if a PM gives less than three months notice of an elections, the regulated period will be from the day of announcement.

Some key details:

  • Comes into force 1 January 2011
  • exemption from regulation as advertisements “the publication by an individual, on a non-commercial basis, of his or her personal political views on or through the Internet or any other electronic medium.”
  • Regulated period starts the later of day after PM announces date or 3 months before the election date
  • A significant non financial change – anyone on the printed roll can now do an advance vote, without having to justify why.
  • Non party/candidate promoters must register is spend is over $12,000
  • Electoral Commission can provide advice on whether a proposed ad is an election ad
  • Candidate spending limit $20,300 (and inflation adjusted)
  • Party spending limit is $1,015,000 plus $20,300 per electorate, which is a possible $2,436,000 for all 70 electorates
  • requirement for corporate donors to declare all their “associated entities” so donations can’t be split between them to avoid disclosure
  • $1,000 limit for donations from overseas persons
  • New disclosure requirements for total amount of donations (but not identities) in three main categories – under $1K, $1K to $5K and $5K to $10K

Already spotted a few clauses that may have unintended consequences. Looking forward to first reading, and then making a submission. I will also put the case for reconsidering the decision to not liberalise the broadcasting allocation and limits.

The electoral finance reform the Government turned down

April 20th, 2010 at 12:00 pm by David Farrar

Last week a courier delivered a fairly large batch of documents to me, from the Ministry of Justice. They were all their internal papers on the latest electoral finance reform, which I had requested under the OIA. There were a couple of deletions (which I may appeal to the Ombudsman) but what they did deliver has revealed what reform packages were considered by the Government, and hence what we might have got.

Nat Lab Green ACT Maori
Taxpayer Funding Any campaign expense Broadcasting only Broadcasting only Any campaign expense (if any funding) Any party expense
Parties able to pay for own broadcasting Yes No No Yes Yes
Donation Disclosure Limit $10K and inflation adjust $1K $1K $10 K and inflation Adjust
Overseas Donations Limit $2K $0K $1K Lift from $1K
Donations Cap None Yes $35K
Party spend limit Inflation adjust from 2008 Inflation adjust back to 1995 $1.50 per capita
Elect spend limit $30K and inflation adjust Inflation adjust from 2008 Inflation adjust back to 1995 $1.50 per capita
Regulated Period 3 months Starts 1 May Starts 1 May From Writ Day 3 months
Parallel Campaigning Transparency only Registration threshold of $100K and a spending limit Low threshold for registration and $120K spending limit Transparency only Proportionate restrictions
Parallel Campaigners allowed broadcasting access Yes No No Yes

This table shows the positions of the five main parties (more than one MP) on some of the key issues.

The Government put great weight on having consensus amongst parties, in contrast to the Electoral Finance Act. Effectively the Labour and Green parties were given a veto over any changes from the status quo. This meant that that changes I personally would have liked to have seen, did not occur.

On the issue of the taxpayer funded broadcasting allocation, National and ACT supported allowing it to be spent on any medium (not just TV/radio) and allowing parties to purchase their own broadcasting time. Labour and Greens opposed this

Views on the donation disclosure limit ranged from $1,000 to the status quo of $10,000.

Labour and the Greens supported a cap on the amount one donor can donate. The Greens advocated $35,000.

In terms of the party spending limit, the Greens supported adjusting it for inflation retrospectively (which I support). National oddly had no position on this. Labour wanted inflation adjustments to apply from 2008 onwards only, and ACT suggested a limit of $1.50 per person (which I also support).

National and Maori Party supported a 3 month regulated period. Labour and Greens a six to seven month period (from 1 May) and ACT a period of around four weeks (from Writ Day).

National and ACT did not support a spending limit for parallel campaigners. Labour supported a spending limit, but did not say what. As they advocated a $100,000 threshold to register I presume a fairly high limit. The Greens wanted a low threshold to register and a $120,000 spending limit. Maori Party supported some limit.

Simon Power put up five options to Cabinet. They were:

  1. Consensus Package – changes which all or almost all parties supported
  2. Comprehensive Package – a full reform package which includes reforms supported broadly by parties on the right (broadcasting liberalisation, higher spending caps) and reforms supported broadly by parties on the left (spending limits for parallel campaigners)
  3. Parallel Campaigning Package – a left leaning package which is the consensus package plus more regulation of parallel campaigning
  4. Broadcast Reform Package – a right leaning package which is the consensus reform package plus liberalisation of the broadcasting regime.
  5. Status Quo

Packages 3 and 4 were politically untenable. The left would attack Package 4, and the right would attack Package 3.

The comprehensive reform package, as it had aspects supported by both left and right, could have been politically feasible. I don’t know if it would have been supported by both sides, or attacked by both sides, so I guess in the end the Government went for the safer consensus package of limited change.

A matrix showing the salient aspects of each package is below:

Consensus Comprehensive Parallel Reg Broadcast Reform Status Quo
Taxpayer Funding Broadcasting only Any campaign expense Broadcasting only Any campaign expense Broadcasting only
Parties able to pay for own broadcasting No Yes No Yes, up to $300K No
Donation Disclosure Limit $5K draft but $10K finally $5K $5K $5K $10K
Overseas Donations Limit $1K $1K $1K $1K $1k
Donations Cap None None None None None
Party spend limit Inflation adjust from 2008 Inflation adjust back to 1995 Inflation adjust from 2008 Inflation adjust from 2008 $2.4m
Elect spend limit Inflation adjust from 2008 Inflation adjust back to 1995 Inflation adjust from 2008 Inflation adjust from 2008 $20k
Regulated Period 3 months 3 months 3 months From Writ Day 3 months
Parallel Campaigning Register at $40K, no spend limit Register at $40K, spend limit of $500K Register at $40K, spend limit of $500K Transparency only Transparency only
Parallel Campaigners allowed broadcasting access Yes Yes No Yes No

The comprehensive package would have seen the taxpayer funded broadcasting allocation able to be spent in any media, and parties able to buy their own broadcasting time (so long as under an overall spending cap).

The spending caps would have increased by inflating adjusting back to 1995.

Parallel campaigners would have a spending cap of $500,000 but be able to purchase their own broadcast advertising.

Before the Electoral Finance Act, I would have quite happily supported a reform package based on the comprehensive package. The third party spending cap of $500,000 is four times higher than the EFA, and the other gains (higher spending caps, ability for political and third parties to buy broadcast advertising) more than compensate for this.

The EFA, partly because of the malignant way it was negotiated in secret, and the hypocrisy that the Government was trying to clamp down on taxpayers spending their own money, yet exempt parties taxpayer funded parliamentary spending from the campaign cap, generated great hostility to the idea of third party spending caps. I helped lead that hostility.

In a post EFA world, I am not sure even a $500k spending cap would not face significant public resentment. It would have been widely supported before the EFA, but as a trade off to the other liberalisations may have been a package worth pursuing.

One other interesting revelation from the OIA documents, is that the consensus package originally included a lowering in the donation disclosure limit for parties from $10,000 to $5,000.  This was absent from the final package announced publicly, so Cabinet presumably did not support that.

International perspectives on electoral finance reform

April 13th, 2010 at 10:00 am by David Farrar

Otago University and the VUW Institute of Policy Studies have organised a public seminar on National’s proposed electoral finance reforms, and international perspectives on such reforms. The key details are:

Friday 14 May 2010
RW501 Level 5, Wellington Railway Station (West Wing)
8.40am to 12.15pm

The programme is:

8.20-8:40: Registration and coffee/tea
8:40-8:45: Welcome by Jonathan Boston
8:45-9:00: Andrew Geddis – New Zealand’s proposed new political finance rules.
9:00-9:50: Jacob Rowbottom – What lessons does the U.K.’s experience have for New Zealand’s proposals?
9:50-10:40: Colin Feasby – What lessons does Canada’s experience have for New Zealand’s proposals?
10:40-11:00: Coffee/Tea Break
11:00-12:15: Joo-Cheong Tham and Graeme Orr – What lessons does Australia’s experience have for New Zealand’s proposals?

Please note the Symposium will be followed by a seminar by Jacob Rowbottom entitled The British General Election and the Prospects for Electoral Reform

If you wish to attend then email: law.reception@otago.ac.nz (please include the “political finance symposium” in the subject line of your email).

I’m attending and looking forward to it.

Editorials 20 February 2010

February 20th, 2010 at 3:43 pm by David Farrar

The NZ Herald slams the latest stunt by the anti-whaling activists:

Peter Bethune knew precisely what he was doing, and the consequences, when he boarded the whaling vessel Shonan Maru 2 to make what fellow-protesters described as a citizen’s arrest of its captain. …

Mr Bethune was intent simply on grabbing publicity. He, and the Sea Shepherd Conservation Society, wanted to prompt a diplomatic incident, thereby putting further pressure on the Japanese to end whaling. …

The Dominion Post argues against a city wide liquor ban:

On one of Wellington’s rare balmy nights there is little to compare to a quiet picnic on the south coast, watching the sun go down and the kids paddle in the surf as you enjoy some cold roast chicken, a nice green salad , and a glass of Martinborough’s best sauvignon blanc.

Soon that pleasure may come with the dubious frisson of being a law-breaker, and the prospect of a visit from police to tell you you are breaching a Wellington City Council bylaw. Under the proposed liquor ban, the wine has to be tipped out on the sand, or the picnic packed up and moved to a non-public place. If you refuse, you will be arrested. If you wait till police go away and then carry on enjoying your picnic, you will be arrested should they return.

That is the future that could face Wellingtonians should the city council go ahead and pass its city-wide booze ban.

It’s a daft idea that should be shot down. Have outdoors liquor bans in areas where there is a problem.

The Press talks about the future of their regional council:

Environment Canterbury chairman Alec Neill managed to put on a brave face after the damning report into his institution’s performance and governance yesterday. The reality is that if the Government adopts the recommendations in the report, ECan as we know it today will be gone. …

The report will provide vindication for the region’s mayors, business figures and farmers, who have been queuing up to slate ECan for some years.

They would also agree with the comment of review leader Wyatt Creech that ECan had a “fortress” and “we know best” culture. …

I predict it will be gone.

The ODT talks about electoral issues:

It will be recalled that, in 2005, the Exclusive Brethren attempted to influence the outcome of the poll by mounting a covert and costly campaign against the Greens and Labour.

Labour had also been concerned about the extent to which campaign finance was both anonymous and uncapped, raising the spectre, it claimed, of “big money” interests tilting the odds against a fair contest: the even playing field argument.

In an attempt to close loopholes in the campaign finance rules, and to prevent parties “jumping the gun” and subverting the spending caps, it also created a controversial regulated campaign period of three months prior to polling day.

Ummn, no. That was the old regulated period. Labour extended the period to be all of election year.

Editorials 18 February 2010

February 18th, 2010 at 2:05 pm by David Farrar

The NZ Herald wants the MMP referenda held earlier:

There appears to be no reason the final referendum could not have been held a year or so after the 2011 general election if the first found a majority wanting change. A new system, if favoured in the decisive vote, could then be used in the 2014 election, rather than waiting as long as 2017.

I disagree. The first referendum is likely to have a low turnout, if not held in conjunction with an election. We found this out in 1992.

I do think there is an argument for the second referendum (if needed) to be held before 2014.  As that will be a simple referendum that will change the electoral system if change is voted for (the earlier referendum is only about if there is a second referendum, and what that is), I think that would achieve a very high turnout even if held separate to an election.

Also, without an election at the same time, the public would be more turned into the pros and cons of the two choices. A change of electoral system si so important, that it almost deserves to have its own debate, not cluttered up with a general election.

So my growing preference is the first referendum in 2011, with the election (to maximise turnout), but have the second referendum in 2012.

If the 2012 referendum votes for change, I am not sure one could implement it in time for the 2014 election, due to boundary changes. But one way you could deal with that is to have the Boundaries Commission (which should start work in late 2011) to prepare boundaries for both options, which would allow them to be finalised in 2013.

The Dominion Post compares Kiwirail to Fawlty Towers:

Kiwirail is to the transport industry what Basil Fawlty is to the hospitality trade.

It treats its customers as impediments to the smooth running of its business.

Current management can be excused responsibility for the creaking trains and dilapidated tracks in the Wellington region.

They are the consequence of 40 years of neglect by public and private owners of the rail system. But KiwiRail bosses cannot escape responsibility for the way customers are treated.

If they are not left waiting on the platform for services that have been cancelled, they are shut in trains that have mysteriously stopped part way into their journeys. Either way, they are kept in the dark.

Who would have thought a subsidised monopoly would give bad service?

The Press examines the electoral finance reforms:

The Government’s proposed new electoral finance system is a mixed bag.

Compared to the Labour’s now repealed Electoral Finance Act, which was a knee-jerk reaction to the covert 2005 Exclusive Brethren advertising, it gives greater freedom for lobby groups to conduct parallel campaigns.

But the new regime has swung too far towards a laissez-faire approach and does create the danger that money could play too great a role in New Zealand politics.

The most unwelcome feature of the new regime would be the absence of advertising spending limits for lobbyists, who are technically but confusingly known as third parties. The preceding legislation imposed a cap of $120,000.

Although few lobbyists came close to this limit in the 2008 election, the lack of a cap might tempt interest groups from across the political spectrum to spend up large in an effort to influence future campaigns. It is also inconsistent with the position of political parties which do have a spending limit. …

But it is also important for voters to know how much lobbyists have spent. In this respect the registration requirement provides only partial transparency, as lobby groups will not have to submit returns on their advertising expenditure.

I don’t have a problem with those who register, disclosing their total spend. That can be something the Select Committee looks at. I prefer transparency to restrictions.

But the Government decided not to amend the taxpayer funded broadcasting allocation system for political parties. Worth further thought is allowing parties to spend their allocations on advertising in newspapers, not just in the broadcast media.

Sadly Labour and the Greens opposed reform of the broadcasting allocation.

The ODT reflects on Michael Swann:

Last week, the people of Otago were served a timely reminder of white collar crime with the sentencing on additional charges of convicted fraud Michael Swann in the High Court at Dunedin.

It will be recalled that Swann was sentenced last year to a nine-and-a-half-year prison term for defrauding the Otago District Health Board of almost $17 million between 2000 and 2006.

On Friday, he was sentenced to 20 months’ imprisonment – concurrent with his present term, meaning that he will in fact serve no extra time behind bars – for accepting $755,000 in bribes from long-time friend and business associate Robin Sew Hoy.

Makes you wonder the point of the additional prosecution!

Espiner on electoral law changes

February 17th, 2010 at 11:00 am by David Farrar

Colin Espiner writes:

Voters are set to be bombarded by record levels of advertising during the next election, after Government moves to relax some campaign spending rules.

Bzzzt. I really wish one would not treat an opinion as a fact. As no third party came close to spending the $120,000 limit last time, it does not follow that having no limit will lead to record levels of advertising.

In a big change to the former Electoral Finance Act, National is proposing to allow lobbyists, such as unions or special interest groups, to spend any amount during election campaigns – provided they register with the Electoral Commission and identify themselves in their advertisements.

I will make a prediction now. The vast majority of third party spending will be unions advertising against National. In Australia the unions spends ten times as much as any other groups.

The move could see a return to the sort of high-spending negative campaign run against the Greens by the Exclusive Brethren during the 2005 election. In addition, lobby groups will be able to advertise for as well as against political parties – raising the possibility of “back door” donations that get around the limits on what politicians can spend.

This is just plain incorrect. A third party can not advertise in support of a political party unless the party agrees, in which case the spending counts as part of the party’s spending under their limit.

You can not get around the spending limit for advertising in favour of a party, by having a third party do it.

But the advertising can only take place in non-broadcast media, after the Government decided to keep current limits on broadcasting during campaigns in place.

They are not limits. They are a ban. The ban incidentally is almost certain to be inconsistent with the Bill of Rights Act.

Consensus kills most meaningful electoral finance reform

February 16th, 2010 at 11:26 am by David Farrar

Simon Power has announced the Government’s electoral finance reform package:

The Government has today announced its reform package for electoral finance laws.

Justice Minister Simon Power says the decisions are the result of a thorough process.

“The package comes after extended consultation with all parliamentary parties and the public.

“As a result, Cabinet has decided to progress reforms only where there is broad public and political support.

“If we are to have a system which is fair, workable, enduring, and in place before the 2011 election, broad consensus is essential.”

Sadly, this means that many good reforms are not occurring. I will detail these below. There are some useful changes, but I am frustrated that some really stupid parts of the law are remaining.

However I have great sympathy for the need to have broad support for the electoral law, so that changes to electoral law do not become the ultimate prize of the victor, trying to skew the playing field to keep them in power (as Labour did with the Electoral Finance Act).

Effectively Simon Power (and Cabinet) has given Labour a veto over major reforms. I don’t like the outcomes this has led to, but do think it is generally the right thing to do, to not force changes through which don’t have widespread support.

It is the polar opposite of what Labour, the Greens and NZ First did with the Electoral Finance Act.

The Cabinet paper is here. Major aspects are:

  1. Parallel campaigners who spend more than $12,000 must register with the Electoral Commission, but there is no spending limits of such campaigners.
  2. Spending limits for parties and candidates to be inflation adjusted for future elections, but no increase to compensate for the lack of such adjustments since 1993.
  3. The definition of an election advertisement will exempt personal political opinions on the Internet
  4. One does not have to use your home address on election advertisements
  5. The Electoral Commission can give advisory opinions on the legality of proposed advertisements
  6. A new requirement that parties disclose all their income from donations in bands, including those below the disclosure threshold
  7. Include an associated persons test to make it harder to do what NZ First did, and not disclose donations as they were from seperate companies, even though they had the same owner.
  8. No change to the regulated period or the broadcasting regime.
  9. A proposal to align parliamentary and electoral advertising rules

My thoughts on the changes are as follows:

  1. A pretty major win with no limit for parallel campaigners. It is not that I want third parties spending huge amounts of money for or against a party (the unions tend to be the biggest spenders) but that it is wrong for MPs to legislate to restrict the amount of criticism that can be advertised against them. Also the public are quite capable of forming their own views about very expensive campaigns.
  2. The lack of any change to the broadcasting regime is hugely disappointing. It is quite simply wrong that parties can not purchase their own advertising on radio or television, and also that effetively the major parties get a higher overall spending limit than smaller parties.  I also think it is wrong that current parties in Parliament get so much of the broadcasting allocation. Labour and the Greens refused to back change here, so the Government did not proceed.
  3. I am rather pleased with the decision to have further transparency with donations, by having disclosure in bands of all income. I proposed this at both stages of the review as it will give the public a more accurate picture of a party’s funding. It will be interesting to see under the OIA who else, if anyone, proposed this.
  4. The associated persons test for donations is very much needed to prevent what NZ First did.
  5. The lack of an increase to party and (especially) candidate spending limits is regrettable as they are too low, and prevent candidates from being able to do even basic communications such as direct mail. Even the Green Party supported retrospective inflation adjustments back to 1993, but Labour did not support this, so it did not proceed.
  6. While it is good the length of the regulated period has not increased from three months, I am astonished they did not go for a fixed start date of 1 August to avoid the current problem of candidates not knowing when the regulated period starts until they are halfway through it. I will be interested to discover under the OIA why this change did not occur. As far as I can tell from the Cabinet paper it may have been technical problems with snap elections.
  7. Allowing the Electoral Commission to issue advisory opinions on advertisements is very welcome. It should be difficult to breach the law.
  8. Also very sensible to allow a non-home address on advertisements so long as one can still contact the identified promoter.
  9. There is a proposal that Parliament ban use of parliamentary funds, during the regulated period, on any publicity material that can be deemed electioneering under the Electoral Act. I strongly support this and proposed such an action. Outside the regulated period only material which explicitly calls for votes (or members or money) is banned, but during the regulated period anything which even appears to encourage support for a party or candidate will not be able to be funded by the taxpayers.

I back the change package as announced, and will submit on them. My criticism is about the changes not made. Hopefully over time a consensus can be gained to do further reform.

US Supreme Court strikes down electoral spending restrictions

January 22nd, 2010 at 5:00 pm by David Farrar

The US Supreme Court has struck down part of the law which restricts private organisations from spending their money on election campaigns.

Cnet explains why:

The U.S. Supreme Court’s sweeping ruling on Thursday that invalidated large chunks of campaign finance law arose in part from an unlikely source: the emergence of Facebook, YouTube, and blogs, and the decline of traditional media outlets.

A 5-4 majority concluded that technological changes have chipped away at the justification for a law that allows individuals to create a blog with opinions about a political candidate–but threatens the ACLU, the National Rifle Association, a labor union, or a corporation with felony charges if they do the same.

The now-invalidated law “would seem to ban a blog post expressly advocating the election or defeat of a candidate if that blog were created with corporate funds,” Justice Anthony Kennedy wrote in the majority opinion (PDF). “The First Amendment does not permit Congress to make these categorical distinctions based on the corporate identity of the speaker and the content of the political speech.”

In NZ we don’t have a court that can strike down laws that breach the Bill of Rights. To get rid of the Electoral Finance Act, we had to sack the Government.

The court pointed out that the now-invalidated laws are more sweeping than the term “campaign finance” might imply–and amount to simple censorship. It listed these acts of political speech that previously would have been criminalized: the Sierra Club running an ad (close to the time of an election) disapproving of a congressman who favors logging in national forests; the NRA publishing a book urging a vote against an incumbent U.S. senator who supports a handgun ban; and the American Civil Liberties Union creating a Web site telling the public to vote for a presidential candidate because of that candidate’s defense of free speech.

This law was even worse than the EFA!

Joel Gora, a professor at Brooklyn Law School and ACLU lawyer who argued a landmark 1976 Supreme Court case, wrote at The New York Times’ Web site today that the justices “dismantled the First Amendment ‘caste system’ in election speech. Before today, the right to speak depended on who was doing the speaking: business corporations, no, unless they were media corporations; nonprofit corporations, maybe, depending on where they got their funding; labor unions, no.”

What happened of course was these groups formed PACs instead, and just donated to the PACs.

The left in the US are calling this an awful decision. This is ironic as the Obama campaign was the highest spending of all time – the first oen to turn down federal funding and an associated cap. They are not against big money in politics – just against other people’s big money!

Electoral Finance submissions close tomorrow

October 29th, 2009 at 10:00 am by David Farrar

Submissions close at 5 pm Friday on the Government’s proposed electoral finance reform.

I have included below my submission.

I would urge as many people as possible, regardless of your views on political finance, to do a submission. The last Government did not allow you to say what you think the law should be, until after it introduced a bill into Parliament – by which time it is much harder to get changes. You have an opportunity here to have your say and influence policy before Cabinet makes final policy decisions.

This is especially so, in the areas where the Government has not yet indicated a preference, but has put a number of options.

You can e-mail a submission to this address. The Government’s electoral finance reform page is here, and a pdf of the proposal document is here.

If you don’t want a compulsory system of registration and limits for “parallel campaigners”, then make a submission – don’t complain about it later, if you don’t submit.

If you do not want a seven month regulated period, make a submission.

If you think political parties should be able to spend their own money on broadcasting advertisements, then make a submission.

Politicians have vested interests in electoral finance law. Some want state funding. Others want to cut off private funding to their opponents. Many don’t like citizens being able to spend their own money criticising them.

Regardless of your views on the issues, have your say. The more submissions people make, the better. They don’t have to be anywhere near as long as mine. You can just state your opinion on one or two issues such as should there be compulsory registration for parallel campaigners and the length of the regulated period with a paragraph or two backing up each issue.

Submission from David Farrar in response to the Government’s Electoral Finance Reform Proposal Document


1. The Government proposes that the following principles both guide the development of electoral finance law and be incorporated in the purpose section of the new legislation: clarity, equity, freedom of expression, participation, transparency, accountability, legitimacy.

I support the addition of the new principle of clarity.

I did not see a need for the principles to be incorporated into the Electoral Act itself, but if they are, they should not be relied on as a substitute to clarity in the legislation itself.

State Funding

The Government is consulting on three options for reform of the broadcasting regime in Part 6 of the Broadcasting Act 1989. Under each option, the Government does not propose to change the total amount of funding that was allocated to political parties at the 2008 general election ($3.21 million) or the arrangement where the total amount of funding is set by Parliamentary appropriation.

I would ask the Government to reconsider that the amount of funding be set by Parliamentary appropriation. This would allow a future Government to increase the funding with no public consultation and as part of a Budget which is effectively guaranteed to pass.

I believe the amount of funding should either be set by statute, and then inflation and population adjusted, or be set at a level recommended by the Electoral Commission.

Status quo option – parties can only spend funds on election broadcasting, and can not purchase any broadcasting advertisements with their own money

Moderate reform option – parties can spend funds on any election advertising, and can purchase broadcasting advertisements with their own money

Significant reform option – parties can spend funds on anything they like (including admin), and can purchase broadcasting advertisements with their own money

I strongly support the moderate reform option, specifically both the provision to allow parties to decide what mediums they advertise in, and the provision to allow a party to purchase broadcasting advertisements with their own money.

Taking the latter point first, I believe the current law is an unjustified restriction of access to the airwaves. A minor party gets a far smaller allocation than a major party, and the current law doesn’t allow them to use their own funds to match the major party. This is not a level playing field. The restriction on buying broadcasting advertisements is a legacy of the past, when it was a much more relatively powerful medium.

The current law also prevents a party that forms just before an election, not only missing out on a broadcasting allocation but they also lose the opportunity to have any advertising in broadcast media.

In terms of what the allocated amount can be spent on, I think the moderate reform is sensible. The significant reform option would introduce full taxpayer funding of political parties. This is not something with public support, and nor it is desirable or necessary. Even worst, the fact the allocation is done by parliamentary appropriation, would allow governing parties to easily vote their parties more funding.

The current taxpayer funding is provided to parties specifically for the purpose of communicating with voters at election time. I submit allowing the parties the flexibility of deciding what medium to spend it on, is sensible, so long as it is spent on election advertising.

Finally, in this section I would repeat a point I made in my earlier submission. Parliamentary parties have a huge advantage over parties not currently in Parliament. They receive considerable free media over the electoral cycle, have MPs working to promote them, and benefit from parliamentary staff and parliamentary budgets. It would be desirable to increase the amount of funding available for parties not in Parliament, and decrease the amount of funding for parties in Parliament due to their considerable advantage.

Parliamentary Service funding

The submissions received in response to the issues paper showed that opinions were divided on whether the relationship between Parliamentary Service funding and election advertising needed to be clarified and how this should be achieved.

The Parliamentary Service Commission is considering these issues as part of the process for developing a permanent definition of funding entitlements for parliamentary purposes in the Parliamentary Service Act 2000. In addition, the Speaker of the House has recently convened a cross-party committee that has developed a public disclosure regime for Parliamentary Service funding.

The Government proposes to ensure consistency between the Parliamentary Service Commission‟s work and the work undertaken as part of the electoral finance reform by raising the suggestions made in the submissions with this cross-party committee for further consideration.

I reiterate that the simple solution here is for the Parliamentary Service to not allow expenditure on advertising for MPs or parties during the regulated period.

MPs and incumbent parties already have a huge advantage. They should not be able to spend parliamentary budgets on advertising during the regulated period, and most of all any advertising they do undertake should be counted as an election expense unless it is totally mundane such as electorate office hours.

Private Donations

The Government proposes to retain the regime governing donations to constituency candidates and political parties that was developed as part of the Electoral Finance Act 2007, and now forms part of the Electoral Act 1993.

In my earlier submission, I advocated a number of changes such as repealing the ability to make anonymous donations through the Electoral Commission, lowering the level for anonymous donations to $100, requiring more frequent disclosure, and requiring a party to publish its total income from donations, in bands.

I still regard these changes as desirable.

However I note that the regime introduced in the Electoral Finance Act two years ago has not yet been through a full parliamentary cycle. I am comfortable with the proposal to make no significant changes at this time. After the 2011 election, the donations section of the law should be more fully reviewed to see if further changes are necessary. Many submitters have made the mistake of concluding the regime does not work due to the low level of disclosed donations in 2008. This overlooks that it is likely significant donations were made in 2007, prior to the law change. Only after we have had a full cycle (2009 – 2011) of donation disclosures, will we be well placed to judge what level of changes, if any, are needed.

Campaign Expenditure Limits

The Government proposes to increase the expenditure limits that apply to constituency candidates and political parties (the Government is seeking submissions on the level of expenditure limits that should apply) and that expenditure limits be adjusted every general election to keep pace with inflation through a formula set in legislation.

As previously submitted, the current expenditure limits have not even kept pace with inflation, and are set so low that they actually prevent candidates and parties from effectively communicating to electors.

Ideally I would like the limits to be based on the cost of an effective advertising campaign to 2.5 million adults for parties, and 40,000 adults for candidates. The Electoral Commission asked an ad agency to calculate such things for its advice on the Electoral Finance Bill, so this can easily done. An empirical approach to setting limits is far preferable to just debating numbers without a context of what they can purchase in terms of advertising effectiveness.

I would note that in an electorate campaign you would expect a candidate to be able to do at least two direct mail letters, a couple of unaddressed pamphlets, a series of ads in local newspapers, and 100+ hoardings. I believe a spend of $50,000 to $60,000 (excl GST) in the regulated period is necessary for a new candidate especially to achieve adequate name recognition and profile. A low spending limit protects incumbents.

I support having a formula set in legislation for future increases. I would submit that the formula should take account of both inflation and population growth. Much of today’s marketing is personalized direct mail, and every extra voter is an extra cost.

For electorates, in the absence of detailed empirical research,  I would submit the formula should be $1.20 per adult in the average electorate. The number of adults would be based on number of residents aged 18 or older in the last census, divided by the number of electorates.

So for example the 2006 census had 3,103,360 adults, which spread over 70 electorates is an average of 44,334. At $1.20 this would be a spending limit of $53,200 for the 2011 election.

If population growth remains steady the adult population in the next census would have 3,370,640 adults. If, as is likely, there are 72 electorates that is 46,814 per electorate. In inflation has been 2% a year from, then the limit would go from $1.20 in 2011 to $1.27 in 2014 for a total limit of $59,600.

The national limit of $2.4 million was set in the early 1990s. Since then inflation has been 27% and population growth 14%. Adjusting solely for that would suggest the limit should be a minimum $3.5 million. If one also adds in the maximum allocation given by the Electoral Commission for broadcasting, that suggests a limit of at least $4.6 million for a party (including the broadcasting allocation) contesting all 70 electorates.

If one takes the current formula of $1 million plus x per electorate, and keeps x the same as the electorate limit, this would be $1 million plus $53,200 per electorate (for the party vote) which would be $4,724,000 limit for 2011 – very close to what it would be inflation and population adjusted.

I would then inflation adjust the $1 million, and inflation and population adjust the amount per electorate.

Regulated Campaign Period Options

commencement on writ day (i.e. a likely regulated period of approximately four to five weeks)

commencement on 1 August in the third year of the election cycle (i.e. a likely regulated period of approximately three to four months depending on the date of the election)

commencement on 1 May in the third year of the election cycle (i.e. a likely regulated period of approximately five to six months depending on the date of the election)

retain the status quo where the regulated period commences three months before the date of the election.

I do not support the status quo. This means that no one knows when the regulated period starts, until the election date is announced, which is often after the start of the then retrospective regulated period. Certainty is welcome.

A regulated period commencing writ day has problems also. It gives the incumbent Government a significant advantage as they know in advance when Writ Day will be, and can tailor their spending around this.

The proposal to start on 1 August is supported. It has the benefit of a fixed date, known in advance, but also means a regulated period of around four months which is in keeping with the traditional length.

I do not support a 1 May start date, and would prefer the status quo to this. This would see regulated periods of around seven months and for a three year electoral cycle, this would be over the top – almost 20% of the cycle. It would also mean that the Budget would get caught up in the regulated period, and parties should be able to promote the budget, and respond to the budget, without it being deemed an election expense.

If there is an early or snap election, then the regulated period should start on writ day, to avoid retrospective application of the regulated period.

Election Advertising

I am not responding in detail to this section, as the devil will be in the detail. I am broadly supportive of the intention to exclude as advertisements:

news and comment published or broadcast by the news media
personal correspondence between private individuals,
low cost merchandise,
personal opinions published on the internet, and certain websites

The Government proposes that on every election advertisement promoters are required to disclose their true name and full street address and suburb or locality (not a PO Box number) of either their residential address, or an address at which the promoter can usually be contacted during the day. Promoters are not required to disclose a private home address if they choose not to.

I support the requirement for transparency, and also that a private home address need not be used. I would propose that a name alone is sufficient on advertisements, if the promoter is registered with the Electoral Commission and their full contact details can be accessed on their website. This would encourage more people to become promoters. They can still be contacted for reasons of transparency should people wish, but don’t have to have their address on billboards and pamphlets all over town.

Parallel Campaigning

I do not support the option to have a “proportionate” regulatory scheme for parallel campaigners. Introducing scheme a scheme will be deeply resented by many as MPs restricting the ability of citizens to spend their own money criticizing them.

There is no documented problem to be solved. The case of the Exclusive Brethren in 2005 is not rationale enough. First of all, their spending was largely deemed to be counter-productive. The public, aided, by the media can be trusted to make their own judgements about the appropriateness of a parallel campaign.

Secondly any parallel campaign limits, would not have necessarily prevented the Exclusive Brethren campaign. They could have had all seven spokespersons register and spent say $100,000 each.

Thirdly the experience in the United States of political finance reform, is that more regulated you make it, the more loopholes get exploited and the effects are counter-productive.

Fourthly the existence of any sort of compulsory registration system for people to spend money criticizing the Government, or other parties, can discourage citizens from political involvement. The Electoral Commission itself noted this, when they referred to the chilling effect on political participation from the former Electoral Finance Act.

Finally, any sort of limit could prevent groups with legitimate grievances from pursuing them against the Government, by campaigning against the governing party. Proponents of such regulations always cite the example of the Exclusive Brethren, and they are a group not many in society feel affinity for, so some may conclude they should not be allowed to spend their own money campaigning.

But take another scenario. What if the Crown confiscated land or property rights off an Iwi, as they have done in the past. That Iwi might want to campaign against the party in Government which stole their land or property rights. Do we believe it would be a good thing to prevent an Iwi from campaigning against a party that legislated away its rights?

This situation could fit the Foreshore & Seabed Act. What if an affected Iwi wanted to campaign against the parties that passed the Act? Bad enough, they have their rights legislated away from them, but even worse is they can’t spend their own money campaigning against the parties that did this.

The current debate over an Emissions Trading Scheme could see some Iwi lose hundreds of millions of dollars of value from their lands. I submit it would be wrong to stop an Iwi from campaigning against parties that it believed had destroyed so much of their value.

Advertising by parallel campaigners on radio and television

Currently parallel campaigners are not allowed to purchase advertising on broadcasters. The Government has put forward only two options – to retain the ban, or to allow parallel campaigners to advertise on broadcasters only if they are subject to registration and spending limits.

I do not support either of those options, and would like the Government to reconsider the option of allowing parallel campaigners (many also known as citizens) to be able to advertise on broadcast media, without any compulsory registration for parallel campaigners.

My next option would be for the Government to have a voluntary system of registration for parallel campaigners. It would have no threshold for registering, but would have an expenditure limit. As an incentive to voluntarily register, a parallel campaigner could then gain access to broadcast media advertising. This would be a strong incentive. It would allow campaigners who do not wish to register to still campaign in other media, but to agree to an expenditure limit if they do wish to advertise on broadcasters.

Other “carrots” for voluntary registration would be the ability to have the Electoral Commission pre-approve an advertisement.

Failing either of those two options, I would opt for the status quo rather than have compulsory registration for parallel campaigners over a certain threshold.

Electoral Administration

The new stand-alone electoral agency will be tasked with publishing guidance on electoral finance rules and providing advisory opinions to political parties, constituency candidates, and the general public on electoral finance law – including whether publications amount to an election advertisement.

I strongly support the creation of the new agency, and the ability to rule in advance whether or not a publication is an election advertisement.

The Government proposes to retain the offences and penalties regime and time limits currently in the Electoral Act 1993.

A major weakness of the Act is that only individuals can be held responsible. Time and time again we see parties escape prosecution by blaming things on lapses between individuals. I would advocate that the penalties regime should include provision for a party itself to be held liable for breaches. Without this, the law remains somewhat toothless.

Brown spends up big in bid for power

October 18th, 2009 at 8:49 am by David Farrar

Nope not Gordon Brown, but Len Brown. His spending is already into six figures it seems, and he is planning a million dollar campaign.

Where are the Labour Party and Green Party people condemning big money in politics, and demanding law changes to stop him “buying” the election?

Brown has already spent between $150,000 and $200,000, according to his rival, Auckland Mayor John Banks – but Brown has dismissed this as at least $100,000 too high.

Brown also denied that his funding had come principally from former Auckland City mayor Dick Hubbard – however the cereal king has paid a small sum.

Brown predicted yesterday that his campaign would reach the million mark.

So who is funding Brown? Surely this Labour Party member will reveal all.

While there will be a cap of $70,000 on all campaigns, that only covers the last three months before the election.

Now think about this. A national campaign has a spending cap of $2.4 million for the last three months and the fact National ran some billboards just ahead of that time period worth around $250,000 saw Labour force through a law change to stop such a thing. So National spent an extra 10% of the regulated period budget before the regulated period. While Labour Party member Len Brown is planning to spend an extra 1300% before the regulated period.

Herald on state funding

October 8th, 2009 at 9:56 am by David Farrar

The NZ Herald editorial:

Until the Labour Government came to grief with its Electoral Finance Act, now repealed, many voters might not have realised how strictly elections were previously controlled in the interests of financial equality. …

The previous code, now back in force, limits the amount parties and candidates can spend on campaigns and particularly restricts parties’ access to radio and television. They are given a set amount of “free” time for opening and closing their campaigns and an allocation of public money for broadcast commercials. Parties are not permitted to use money they have raised themselves to buy more air time even if the spending would be within overall campaign limits.

Which is an antiquated restriction inherited from the days when the broadcast medium was all powerful. It is very very unfair that a party can not spend more money on broadcast ads than their allocation by the Electoral Commission.

National is part-way through a promised review of the law and has just published some options for public comment. It would retain public funding for party advertising either under present rules or with no restriction on the type of media in which the money can be spent and no limit on the broadcast time a party can buy from its own funds, provided it is within overall campaign limits.

And the latter option is preferable to the former.

A third option would allow parties to spend their public allocation for any election purpose, not necessarily campaign advertising. From there it would be a short step to full public funding of election campaigns. Once the taxpayers’ contribution ceased to be for a defined purpose, parties would soon press for public funds for all purposes.

I agree. I oppose that option.

If the review was being conducted independently of political parties we might be presented with another option: the end of this state-funding-by-stealth. There is no particular reason that taxpayers should have had to pay for the promotion of parties on television. It is nonsensical that even fringe campaigns can get on air by making an application on time. Let all contenders prove their worth by raising voluntary finance. And let them spend it where they think best.

I proposed a compromise. Have the funding available only to non-parliamentary parties, in recognition of the fact that parliamentary parties have a huge advantage. They get publicity over the whole three year cycle, and parliamentary resources such as MPs, staff and funding.

The previous Government’s vexed issue of “third party” campaigns – publicity for or against a party or on an issue that works to a party’s advantage or disadvantage – has not been resolved by the review so far. National, too, wants to regulate “parallel campaigns” as it calls them, but wants to make their spending rules simpler than those Labour laid down and “weighted in favour of freedom of speech”.

That is not quite correct. National has proposed two mutually exclusive options. One is for regulation and one is for the status quo of basically transparency only. I do not believe a case has been made that you need to regulate beyond transparency, and hope Cabinet will finally conclude to recommend no change.

And parallel campaigns should be allowed to broadcast during election periods.

I agree.

The red tape of electoral finance was hopelessly tangled even before Helen Clark got her hands on it. National is at least proceeding cautiously; the proposals offered for discussion until the end of the month are a response to comments on a paper issued in May. Public views will be invited again next year when legislation appears. Constitutional steps should be taken this way. It is for all of us now to have our say.

Indeed the existing law was far from perfect. As the Herald says, make sure you submit and have your say.

Electoral Finance details

September 28th, 2009 at 2:28 pm by David Farrar

Here are the major proposals or options from the proposal document.

Broadcasting Allocation

Option 1 is the status quo of $3.2 million for political parties that can only be spent on broadcasting, and parties can not buy additional time.

Option 2 is moderate reform where the allocation can be spent in any advertising medium, and parties may buy additional broadcasting time.

Option 3 is significant reform where the funds can be spent on any purpose (not just election advertising) plus parties may buy additional broadcasting time.

Personally I would restrict access to the allocation to non parliamentary parties, but that is not an option.

Option 3 is effectively state funding of political parties, so I am not in favour. If we are to have taxpayer funds supplied, they should be for the express purpose of election advertising, not to pay people to administer the party.

I support Option 2 then, as it is the fairest, allowing parties to purchase time beyond their allocation and also allowing them a choice of medium.

I would suggest the amount allocated be set in legislation (and inflation adjusted) so a future Government can not just double or triple the amount allocated.

I was pleased to see the paper say:

While some submissions on the issues paper supported an increase in state funding to political parties, many submissions considered there was no case for additional state funding to political parties at the current time, particularly in light of the donations returns for the 2008 general election which demonstrate that some political parties are able to raise adequate private funds for their campaigning.

That was a point I made – the empirical evidence from 2008 is that there is sufficient private funding.

Parliamentary Service Funding

No change at this stage just  a desire to harmonise definitions of electioneering. I still believe the best way forward is to prohibit PS funding of any advertising during the regulated period.

Private Donations

No change. This is not entirely surprising. Personally I would have got rid of the ability to donate anonymously through the Electoral Commission.

This means the law passed by Labour and the Greens, as it applies to donations, will remain in force.

Campaign expenditure limits

The Government has decided in principle that the limits for party spending (currently $2.4 million effectively) and constituency spending (currently $20,000) should increase. They are seeking feedback on what level they should be set at, and also a desired mechanism to adjust the amount for future elections.

If you inflation and population adjust back to 1995, and include the $1 million broadcasting allocation then the party limit would be close to $5 million. I think $50,000 is around what you need at electorate level to be able to do even a basic campaign. That is a bit over $1/voter only.

Ideally the limits should be calculated using research on how much one needs to spend to reach x% of the population with a frequency of y.

Future increases should be based on inflation and population growth.

Regulated Campaign Period

Four options

  1. Starts on Writ Day. This means a period of around five weeks. Would give PM’s party a huge advantage as they could spend up large before writ day knowing when it will be before others do. Mind you I doubt any party would come close to spending up to the limit for such a short period.
  2. Starts on 1 August in the scheduled election year. This is my preferred option.
  3. Starts on 1 May in the scheduled election year. I think this is too far out as it covers the period of the Government’s Budget and you don’t really hit campaign mode until after that.
  4. The status quo of three months before the election. My least favoured option as it means you are halfway through the regulated period before knowing exactly when it starts.

The paper also canvasses two options for snap elections. Either have it retrospective to three montsh before the election date, or have it from the date of the announcement (which I favour).

Election Advertising

Definition will be based on 1993 Act’s definition of seeking to influence voting behaviour, and will be media neutral. It will not include policy advocacy that does not mention parties.

Exemptions will include media, personal correspondence between individuals, low cost merchandise (pens etc), personal opinions published on the Internet (or by text messaging), website maintained by parties and candidates and parallel campaigners (if registered), and anything put out by electoral agencies.

This seems quite good. The website exemption may seem strange to some, but it is hideous trying to work out what portion of a site is an advertisement and further it is a passive medium which people seek out – it is not like advertising that is displayed to people who are not seeking it.

All adverts will have name and full daytime address (but need not be home).

Parallel Campaigning

Two options.

The first is a “proportionate” regulatory scheme that has a high registration threshold and overall expenditure limits. Registered campaigners will not have to disclose donations to them as per the EFA. Registration restricted to NZ citizens, residents and organisations.

The second option is the status quo. No registration but you must identify yourself. This could possibly include restricting advertising to NZ citizens, residents and organisations.

While the first options is considerably superior to what was in the EFA, I am not convinced there is enough of a problem to change from the status quo. There was very little third party spending in 2008 and the main problem in 2005 was the lack of transparency by the Exclusive Brethren, not the fact they spent money.

Some will argue as parties have a limit, so should non parties. But the argument against that is the voting public will tend to discount the message anyway, if they perceive an inappropriate amount of money is being spent on a campaign. The public should be trusted – even the 15% who think Hillary is alive!

At the end of the day I think the spending by the EB helped the left, more than it harmed them.

Broadcast advertising by parallel campaigners

Two options again. The status quo is no spending is allowed. The other option is to allow parallel campaigners to advertise on TV and radio if there is a system of “proportionate regulation”.

I don’t like having to choose between two restrictions. I would prefer no need to register, and being able to spend on TV and radio.

The ability to gain access to TV and radio advertising might make the option of proportionate regulation of parallel campaigners more attractive for some.

Monitoring and Compliance

Electoral Agencies to be merged as detail in previous post. Best of all the new agency will be able to advise parties and candidates as to what constitutes an election advertisment.

No changes to penalties or time limits, and I presume (sadly) the Police will retain the prosecution function.

Overall it is a good document. There are definitely some things I do not agree with, but they have generally made quite sensible decisions, and the options outlined are workable models. Of course of high interest will be which option they choose!

Electoral Finance Reform Proposals

September 28th, 2009 at 1:40 pm by David Farrar

Two significant announcements from Simon Power. The first is that the three electoral agencies are being merged into one agency, which will be fully independent of the Government.

I’ve long advocated that, and it is great to see a Government finally doing it.

The Electoral Commission and the Chief Electoral Officer will merge by 1 October 2010 and the Chief Registrar of Electors will merge in after the 2011 election.

I presume the Commissioners will be appointed by Parliament. At present they are a mixture of appointment by the Minister and ex-officio the Secretary of Justice.

Simon Power has also released a proposal document, after the earlier discussion document, on electoral finance reform.

I’ll blog in more detail on the proposal document later, but I’m really pleased to see that in relatively contentious areas such as length of regulated period, broad casting allocations, they have proposed two or three options so that one can have a more useful debate (as in between options) as oppossed to clean slate discussion in the discussion document.

Really the process has been near flawless so far, and very inclusive. Total opposite to what the last Government did.

Submissions will be open until 30 October 2009.

Summary of Electoral Finance Submissions

August 10th, 2009 at 3:00 pm by David Farrar

The Ministry of Justice has released a summary of submissions on its electoral finance review. Later this month we should see the Government’s proposals. Some interesting aspects of the summary:

  • 79 submissions. 29 from individuals, 20 from Otago Uni students, 11 from industry groups, 5 from political parties, 6 from Govt bodies, 2 from unions and 2 from businesses. National I know did not do a submission, and Labour published their one (which was helpful). Would be interested to see the submissions from the other political parties. Hopefully the Ministry will publish these to save me the trouble of OIAing them. UPDATE: I was wrong. National did do a submission. I just did not hear anything about it. I will blog it later
  • Eight submissions (including mine) support an additional principle of simplicity.
  • There was little support for increasing the limit for anonymous donations from $1,000. I proposed it reduce to $100.
  • There were 12 submissons both for and against retaining the protected disclosure scheme where anonymous donations can be routed through the Electoral Commission. I was one of those saying the scheme should be scrapped.
  • 14 submissions want the $10,000 disclosure limit for party donations lowered to $1,000.
  • 13 submissions wanted no cap on donations from a single source. 19 supported a cap.
  • 33 submissions favoured public funding of political parties, but only nine supported extra funding on top of the broadcasting allocation
  • 10 submissions favoured abolishing the broadcasting allocation
  • 17 submissions favoured parties being able to purchase broadcast advertising beyond their allocation
  • 13 submissons supported increased spending limits
  • 9 submissions supported a three month regulated period and 10 a 12 month or from 1 Jan regulated period.
  • One person submitted that bloggers who advocate for a party must get the permission of that party! Another said bloggers with significant influence should not be anonymous.
  • 15 submissions favoured regulation of parallel campaigning and seven did not.

I am looking forward to seeing the proposal document. I hope in some areas it may give two distinct options rather than merely this is what is planned.

Law Society submission on electoral finance

July 18th, 2009 at 10:08 am by David Farrar

The New Zealand Law Society has done a submission on the electoral finance review. I will do extracts below but it very strongly makes the point that the review assumes regulation is needed too oftne, when it has not defined what the problem is. This is a theme several submitters have made – any restriction on the right of citizens to get involved in the political process must be justified by pointing to actual harm done by not restricting those rights. Potential or imagined problems are not enough.

Their primary submission is:

that electoral finance law should not restrict the communication of political views nor engagement in political debate (including the opportunity to persuade others of the merits or otherwise of policy or candidate) unless there is an identified reason to do so; and the first step should be to identify the mischief that gives rise to the need to have electoral finance law. The next step is to design laws, including related structures or institutions, that effectively address the identified mischief. Laws that are ineffective or inappropriate (whether because they are too easily avoided or cast too wide) do not enhance the electoral system or the law.

They criticise the issue paper:

The Society considers that the Issues Paper and the wider debate around electoral finance law suffer from an inadequate definition of the problems or potential problems that the regulation of political activity seeks to remedy. Responses to questions about the content of regulation of political activity should be based on a comprehensive discussion and understanding of what the problems and potential problems of unregulated political activity are. A clear need to regulate should be identified.

They raise issues with the “fairness” principle:

Principle 1 is rather loaded. Fairness and equality are not the same. Some candidates will be better public speakers than others; that does not entitle some to presentation lessons, though they can buy them themselves if they wish. Independent candidates, or single issue parties may not get the same opportunities to explain policies and influence voters. Not every leader may be invited to a televised leaders debate?

This is similiar to the point I made in my submission. My example was it is proven in US presidential elections that shorter candidates do not get elected often. There are dozens of factors that can be regarded as unfair. It is trite to assume that money is the only factor that can cause “unfairness”, let alone that it must be regulated. My suggestion was the threshold for intervention should be “manifestly unfair” rather than just “unfair”.

Unidentified donations up to a total of $10,000 p.a. for each group of related persons or entities should be permitted but disclosure of the fact of them should be very soon after receipt.

They are saying the current disclosure threshold of $10,000 is adequate, but that disclosure should happen faster and related persons or entities be treated as one person. I agree with all of that. I advocate monthly disclosure of donations, and some sort of related persons and entities rule would prevent the scams we saw with NZ First where they got up multiple $10,000 donations from the same donor, but disclosed none of them as they were paid through different companies.

Should there be a prohibition on donations from certain sources (for example, overseas individuals, or corporate, or unincorporated entities)?

No. There are many anomalies at both corporate and individual level and it would be so easy to use local branches of overseas entities that the appropriate course is to allow the donations and publish if over the threshold.

I agree. Transparency is the key.

in addition to the rule that Parliamentary Service funding cannot be used for electioneering, funding for all communication services could be suspended during a period before an election. This period could begin the day after
the day that Parliament sits for the last time before polling day. Arguably, MPs do not need communication services funding during this time because almost all of their communication will be electioneering, paid for from their own campaign funds.

This is also in line with what I advocate. I actually think you suspend funding of communication services for the entire regulated period, but if that is too long, then at least for the period after the House last sits.

Moreover, this suspension of funding would better accord with the principle of equity by not giving incumbent MPs an advantage over other candidates for election. Incumbent MPs have an advantage as they can use public funding to communicate with their constituents. Even communication that is not electioneering helps to raise a candidate’s profile. Levelling the playing field for all candidates in the period immediately before polling day is desirable.

Agreed. But will the MPs? It is up to us to pressure them to do so.

If campaign broadcasting continues to be regulated in a similar way to how it is currently regulated, then parties who receive an allocation of time and money should be able to spend their own money on campaign broadcasting. The State should not determine a party’s ability to campaign using broadcasting through a government decision on how much time and money the party can use for broadcasting.

Absolutely. It is sad Labour is backing a regime that prevents smaller parties from using their own funds to get as much airtime as the larger parties get from the taxpayer.

The focus of electoral finance law should be on regulating the conduct of politicians (which is a reason why reform should be initiated by an inquiry that is independent of the political process), not the conduct of voters.

Excellent way of putting it.

There should not be regulation of negative or attack advertising, other than the requirement that advertising material disclose the identity of the person disseminating it and the law that regulates all forms of expression, such as the law of defamation. The law of defamation will often be able to deal with the spreading of false information.

However, there is still the potential for false information about candidates for election to be disseminated. False information in political debate can be damaging as it may adversely affect voters’ choice. Knowing the identity of the person disseminating material containing false information will allow candidates for election to deal with situations where false information is spread about them (Issues Paper, para 4.26). It can also be argued that the best test of truth is to allow different claims to be circulated in the free market place of ideas. Transparency is a necessary and sufficient requirement on negative or attack advertising.

The free market of idea is one I like.

Labour’s electoral finance submission

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

Labour 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 anonymous donations 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 Electoral Act 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

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.

Superb Electoral Finance Reform Submission

July 2nd, 2009 at 2:28 pm by David Farrar

I’ve been sent a copy of a superb 85 page submission on the Government’s Electoral Finance Reform process.

It’s been authored by four young lawyers and law students and the quality of their research and arguments is first class – they have 157 citations in the submission and make a strong argument for a lightly regulated system. I don’t agree with them, of course, on every point but I admire the scores of hours of work that must have gone in to produce such an excellent submission.

They make a strong case for anonymous political speech, citing important political works published under a pseudonym such as the famous Federalist papers published by Publius. Actual authors turned out to be 4th President James Madison, 1st Treasury Secretary Alexander Hamilton and 1st Chief Justice John Jay.

On spending limits, they make the point that Obama outspent McCain by $397 million but there are no indications that US citizens think this made Obama’s election unfair.

I won’t do the paper justice by trying to summarise it, but I would recommend those with an interest in this issue read it. You won’t agree with all of their positions, but I hope like me you’ll regard it as a wonderfully well researched and argued submission.

Electoral Finance Submission

June 26th, 2009 at 2:41 pm by David Farrar

I was hoping to blog this over the last week but got too busy so have had to write it all in the last 36 hours.

Anyway for those interested my submission is here – electoral-finance-reform-submission-form-final-dpf.

The very high level summary of what I advoctaed is:

  1. Agree with six principles but under equity makes it “manifestly unfair” rather than merely unfair. Also add 7th principle of simplicity.
  2. Ban all anonymous donations (except those under $100 as not practical to record every cent), and abolish protected donations regime through Electoral Commission.
  3. Retain transparency and disclosure of donations through an intermediary such as a trust.
  4. Proposed disclosure threshold for donations remain at $10,000/year but also require disclosure if donations exceed $25,000 over a three year electoral cycle.
  5. No limit on donations from a single source.
  6. Donation levels should be inflation adjusted.
  7. No restriction on who can donate, so long as significant donations are disclosed.
  8. Against any additional public funding of parties or their campaigns
  9. Would ban all advertising from parliamentary or Government funds during the regulated period, except essential advertising approved by Auditor-General.
  10. Restrict the current broadcasting allocation to parties not in Parliament as parties in Parliament already have a massive advantage with their media profile, their MPs, their parliamentary staff and their parliamentary budgets. Suggest $200,000 per non parliamentary party be allowed.
  11. Political parties (and third parties) should be allowed to purchase their own broadcasting time and advertisements.
  12. TVNZ and RNZ should not be required to give away free broadcast time for party broadcasts.
  13. Advocate new additional transparency requirements for political parties – that they report a summary of all donations received by band – ie x donations from $0 to $100, y donations from $101 to $1,000, z donations from $1,001 to $10,000  etc. This will allow an overall picture of how a party is funded and would have exposed the false imagine NZ First portrayed as solely funded by cake stalls etc.
  14. Campaign spending limits should be based on emperical evidance of what amount of money is needed to effectively communicate with all voters. Suggest $50,000 for electorate campaigns and $5 million for party campaigns. Note this includes the broadcasting allocation so effectively moves the limit from $3.5 million to $5.0 million – which is what it would be anyway if it had been inflation and population adjusted from 1996 when last set.
  15. Spending levels should be inflation and population adjusted.
  16. Would like a fixed election date and regulated period to start 90 days before that. If not possible, then have regulated period start 90 days befroe expiry of the House or on a fixed date such as 1 September. Must not have a retrospective regulated period.
  17. Have a narrow definition of election advertisement so it does not capture personal communication of views etc.
  18. Generally exempt communications on the Internet as this is information people seek out. Exception is paid advertising on the Internet.
  19. Require advertisements to be authorised but allow names and addresses to be listed on Electoral Commission website.
  20. Have a voluntary registration regime and spending limit for third parties or parallel campaigners. Provide incentives for third parties to register – such as binding rulings on advertisements, but not make it compulsory as experience of EFA is this is hugely resented.
  21. Suggest threshold for registration (if compulsory) is $50,000
  22. Spending limit (preferably voluntary) to be 20% of a party’s limit or $1 million.
  23. Combine electoral agencies and let them take cases direct to Court without Police.
  24. Allow electoral agency to give binding rulings like the IRD
  25. Also allow agency to impose automatic fines for minor breaches such as late returns.

The Ministry of Justice will pubish a summary of submissions in the near future and in August a proposals paper. Will be very interested to see them.

NZ Herald on Electoral Finance issues

June 1st, 2009 at 1:00 pm by David Farrar

The NZ Herald looks at the issues paper on electoral finance:

Like it or not, the financing of politics is up for public discussion again. This time the trigger is not a sudden, vengeful, partisan bill but a reasonably phrased paper from the Justice Ministry that invites comment on many issues that need to be resolved after the previous Government’s Electoral Finance Act.

A bit of a difference!

There are many inequalities that bear on an election contest, wealth is just one. The discussion paper mentions that restrictions on campaign donations do not extend, for example, to the labour of supporters. Parties are required to account for all goods or services provided at less than normal charges, except for those who volunteer time and energy to staff phones, distribute flyers and the like.

Why is that form of donation excluded? If one party attracts more people with time to offer rather than money, that is an advantage every bit as valuable. Enforced electoral equality is absurd. Strictly speaking parties would have to be regulated to control advantages of intelligence, debating skill and good looks, too.

The Herald raises very valid points. We had a similiar dicussion at a seminar on Friday put on by Transparency International and the VUW Institute of Policy Studies.

I quipped that if we weer serious about “fairness” in electoral contests, then something should be done about the fact I am most unlikely to be elected President of the United States. One of the Professors though me not being a US citizen would be a bigger issue, but I was referring to the fact that in the presidential elections since 1900, the taller candidate won 23 out of 28 times – a statistically significant result.

I believe we do need some regulations around electoral finance, but we need to remember spending has a low correlation to votes.

This is not to argue that no rules on party finance are needed, but to suggest that the subject is not quite as important as left-wing activists and academics believe. Our elections do not need the level of financial regulation they receive. Legislators should be looking to greatly simplify the rules of donation and disclosure and do away with as many as possible.

It is almost as if the Herald was at the seminar on Friday, as I proposed that an addiional principle for the law review should be “Simplicity” – that people should not have to consult a lawyer to get involved in an election. The lawyers in the room looked most upset at such a proposition 🙂

Donations of more than $1000 to a party or a candidate within a three-year parliamentary term should have to be disclosed, and before the election, not months afterward. Parties should have to raise their campaign funds by an agreed date and make their disclosure in good time for voters to consider it. Otherwise, what is the point?

I agree with a lot of what is here. Disclosure should be before, not after elections. The cap should be calculated over the three year term. But the level proposed is ridicolously low – currently you can give $10,000 a year or $30,000 over three years without public disclosure. That level is about right – more than that and it is possible one could be buying influence. Even at $10,000 a year or $30,000 over three years – that is still a figure of 1% of a party’s total income.

So $1,000 is far too low, but apart from that I agree with the Herald.

The discussion paper permits the broadcasting restrictions to be questioned, too, and the public financing of party commercials. The public never had much say in the creeping regulation of our politics. Now we do.

If we neglect this discussion paper we leave the work to diligent political souls with often wildly inflated fears of the private wealth. Legislators need to hear that an effective rule of disclosure is really the key to a fair contest.

Transparency is key.

Electoral Finance Issues Paper

May 22nd, 2009 at 3:36 pm by David Farrar

Simon Power has released the issues paper on the topic of electoral finance.  It’s 70 pages long, so good weekend reading.

I will blog next week in detail on it, and critique it. I encourage people who remember the horrors of the EFA to take an interest, get involved and participate.

At this stage mark down these dates for the public forums:


Tues 9 June 1730 – 1900 Rutherford House


Mon 8 June 1730 – 1900 Copthorne Hotel, Auckland Harbour


Thu 4 June 1730 – 1900 Christchurch Convention Centre

Submissions on the paper close Friday 26 June.

Have your say, or you risk losing your say (again).

I don’t guess there will be an apology?

April 17th, 2009 at 6:25 am by David Farrar

The Herald reported yesterday on various donations to candidates and included:

A mystery entity called Toorak Chambers also gave $3000 each to National MPs Simon Bridges, David Bennett, Todd McLay, and Lindsay Tisch.

When questioned, one of the recipients said it was linked to the National Party and referred the Herald to the party’s headquarters.

They today cleared up the mystery:

Meanwhile, the mystery of $3000 donations to several National MPs from “Toorak Chambers” has been cleared up. Toorak Chambers is an incorporated society which owns a building in Hamilton.

The “donations” were effectively a dividend from profits to the members – National’s central North Island electorate branches.

As a political party is an unincorporated society, major assets such as buildings are always vested in an incorporated society as this is a legal body corporate. So basically the “donations” are rental income. Nothing sinister at all. Toorak Chambers even has its accounts online. The constitution is also online, making it very clear it is the property arm of the CNI Region of the National Party.

Nothing wrong with the Herald reporting of Toorak Chambers. It was responsible, and once they had the full info, they published it.

No Right Turn jumped to conclusions:

National’s response to the Electoral Finance Act, or any attempt to regulate political donations, is to claim that transparency is enough. Then, in practice, they evade and undermine that transparency, using corporate fronts to shield the identity of donors. These are the actions of a dishonest, hypocritical, dirty party with something to hide.

We await the unreserved apology. I am not holding my breath.

2008 Spending and Votes

April 8th, 2009 at 1:46 pm by David Farrar


This spreadsheet above looks at what correlation there is between advertising spend on behalf of a party, and how many votes they got. The first column is the party’s declared advertising (it does not include candidate advertising) and the second column is how the costs of any broadcasting paid for by the Electoral Commission. So the third column is the total advertising spend on behalf of the party, and then divided by the number of votes they cost, what he spend per vote is.

The variation is huge – from 29c a vote to $55 a vote. Take the two extreme minor parties. The Bill and Ben Party got 13,016 votes with under $4,000 of spending. While Social Credit got one tenth as many votes despite spending 20 times as much money.

Most focus will be on the parties that do make it into Parliament, or have a serious chance of doing so. Of those National spent the least per vote – $3.04. So hardly buying your way to power.  ACT spent the most at $14.57 a vote, followed by Progressive at $12.80 a vote.

The Greens and NZ First both spent over $10 a vote, two to three times that of Labour and National.

Money is useful in politics. But it is far from a dominant factor. Policies, leadership, media reporting, volunteer effort, membership levels, smart use of IT, MPs behaviour all have (in my opinion) a greater influence on electoral outcomes than merely money spent.

Electoral reform done properly

April 2nd, 2009 at 1:00 pm by David Farrar

I’m delighted with the process outlined by Simon Power to consider electoral finance issues.

Readers will recall that Labour, Greens and NZ First negotiated the Electoral Finance Bill in secret. There was no opportunity for any public input until it reached select committee. And we also all know how terribly flawed that bill was.

So what is National proposing as a process:

  1. An issues paper released in May 2009
  2. Public Forums in Auckland, Wellington and Christchurch
  3. Submissions on Issues Paper
  4. Govt releases summary of submissions
  5. Govt then releases a proposed policy for reform in August 2009
  6. Submissions on proposed policy
  7. Govt releases summary of submissions
  8. Then Govt introduces bill into Parliament in late 2009 or early 2010,  with normal select committee process

I’m really pleased that they are doing two, not one, stages of public consultation – on both the issues paper and on the proposed policy – that way it is all no surprises.

Also very pleased to see public forums are scheduled. I had been talking to some NGOs about organising some forums to fit in with the consultation. It is even better that the Government itself will organise such forums. I encourage people to take advantage of the opportunity to have a say.

The following topics are being considered:

  • Guiding Principles
  • Candidate and Party Funding
  • Campaign Spending
  • Advertising
  • Parallel Campaigning
  • Monitoring & Compliance

Off-topic for the review is:

  • The MMP electoral system
  • Maori representation
  • Structure of electoral agencies
  • Electoral roll administration
  • Electorate boundaries
  • Local Government electoral law

I agree these are best dealt with separetly. I do hoep the Government will look at some of these issues independently and consider changes – especially to the electoral agencies structure and electoral roll administration.