Will this appear on TV3?

May 13th, 2014 at 3:00 pm by David Farrar

Liam Hehir writes in the Manawatu Standard:

Are you ready to hear something that will shake your faith in our democracy? Brace yourself.

I can reveal that a network of highly organised corporations have gained influence over one of our political parties. They give this party thousands of dollars – and there is no doubt they get their money’s worth.

For instance, the corporations in question have privileged party connections. As hard as it is to believe, they actually have a direct hand in choosing the party leader. Less directly, a high number of party MPs and organisers used to work for them.

The party regularly proposes legislation that furthers the goals of these corporations.

One of their umbrella organisations was even awarded a government contract that one watchdog group called a “cosy deal” to do “little, if anything”.

Yes, the role and influence of unions over the Labour Party is truly disturbing.

Of course, you probably shouldn’t expect the TV3 news team to express any alarm over this. I also wouldn’t hold my breath while waiting for John Campbell to demand which Labour Party figures met with which union bosses (and what was discussed and what promises were made).

Union bosses that pay enough money to Labour ever get private meetings on a regular basis with MPs to discuss and write policy.

Reasonable disclosure standards should be maintained and adhered to. As long as they are – and there’s no evidence of actual favours being traded for donations – it’s hard to see what there is to get het up about.

After all, it’s reasonable that people who are donating to a cause have an opportunity to talk to the people they are donating to. It’s also reasonable for politicians to talk with the people they hope will back their cause.

So it doesn’t really disturb me to know that organised labour is a powerful force within the Labour Party. I know that the party is supported by, and will support legislation favourable to, the trade union movement. I price that into my decision about voting for it. People make the same calculation about National and the farming and business sectors.

The alternative is for private donations to political parties to be banned altogether and for all political activity to be exclusively financed by the state. This is the preference of the Green Party – and it is hard to escape the feeling that the “revelations” about private donor fundraising are being used as a stalking horse for that cause.

Public financing of political parties should be resisted. When parties don’t depend on voluntary donations – from individuals, business, trade unions and other non-government sectors – they will become a self-perpetuating elite of career politicians. Incumbents will benefit from a system rigged even more in their favour, and grassroots politics will wither.

Our members of Parliament will become less like our delegates to the Government, and more like the Government’s emissaries to us.

And however you feel about the present system, it’s preferable to that.

This is the agenda that must be resisted. Taxpayers being forced to fund political parties. It entrenches the incumbents and means that we end up not donating to the parties we agree with or support – but being forced to fund the parties we detest.

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Surprise – Cunliffe wants Labour to be funded by taxpayers

May 12th, 2014 at 12:40 pm by David Farrar

I’ve said for days that this donation stuff is all about Labour and Greens trying to change the law so taxpayers are forced to fund their political parties (so they no longer will be reliant on members and supporters). This got confirmed today:

David Cunliffe believes it’s time to consider publicly-funded elections. …

The Labour leader says it’s time to have a conversation.

“There’s a trade off to be made between investing more taxpayers funding in the political process to guarantee fairness and democracy on the one hand and making sure that every dollar is well and prudently spent.”

I’m 100% opposed. For a start taxpayer funding political parties does not reduce private donations – look at Australia where they have state funding – and you have unions donate tens of millions of dollars to Labour.

It is healthy for political parties to need members and supporters to raise funds. It’s a good thing that if a party loses say 75% of its members, it loses a lot of its funding.

Most of all it is wrong to force taxpayers to fund political parties whose policies and candidates they may detest.

But you have been warned. If the opposition get into power, beyond doubt they’ll try to legislate for taxpayer funding of political parties.

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Greens call for taxpayer funding of political parties

February 1st, 2014 at 12:00 pm by David Farrar

The Herald reports:

The Green Party believes the rules could be amended further. It wants an inquiry to investigate state funding for election campaigns.

A spokeswoman said: “We see partial public funding of parties as a further step to help level the playing field between parties and to help combat parties being captured by wealthy interests.”

That would be a terrible thing. Any significant donations must be disclosed so people can then make informed decisions on consent. The Greens just want taxpayers to fund their own party, rather than be reliant on members and supporters. Then they’ll use that to limit how much money supporters can donate.

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Labour wants taxpayer funding for local body candidates!!!

October 15th, 2013 at 4:00 pm by David Farrar

NewstalkZB reports:

Cold water’s being poured on a potentially controversial way to boost voter turnout at local body elections

Labour’s Sua William Sio is suggesting they be state funded and that candidates get taxpayer support for their campaigns.

He believes it could increase voter participation and improve ethnic representation.

Local Government Minister Chris Tremain indicates it’s not on the Government’s “to do” list.

Oh my God. Imagine it. If Labour get in and introduce taxpayer funding of local body candidate’s campaigns. They generally advocate $2 a vote so Penny Bright gets $20,000 from the taxpayer for her campaign. John Minto gets a bit less. Len Brown picks up $300,000. Celia Wade-Brown pockets $50,000 or so.

Labour never stops trying to find ways for the taxpayer to fund their party and their candidates.

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Australian parties get $56 million from the taxpayers

October 11th, 2013 at 9:00 am by David Farrar

News.com.au reports:

AUSTRALIA’S political parties and independents have scooped up $56.3 million in funding from the votes they won at the federal election.

Clive Palmer’s Palmer United Party made $2.202 million from its surprising strong vote on September 7 after Mr Palmer was believed to have poured millions into his campaign.

Liberal Democratic Party senator-elect David Leyonhjelm scored his predicted $1.033 million, despite admitting some people mixed his name up on the ballot paper with the Liberal Party and opposing public funding of political parties.

The Liberal Party made $23.103 million, the Nationals $3.076 million while the Australian Labor Party made $20.195 million.

The Greens will receive $5.356 million.

South Australian independent Senator Nick Xenophon will receive $636,127 after his strong polling in the state’s senate race.

Bob Katter’s Australian Party will receive $166,711 and Family First $103,724.

An AEC spokesman said all candidates who score at least 4 per cent of the vote qualified for the $2.48 payment per vote.

This is what the left want to occur in New Zealand. No more reliance on members and supporters for funding. Just rort it all from the taxpayer.

Taxpayers should not be forced to fund political parties through their taxes. Funding a political party should be a voluntary act. It is appropriate the MPs get resources to support their work as MPs, but party organisations should go find their own funding rather than force taxpayers to fund them.

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The campaign you’re all paying for!

August 27th, 2013 at 1:00 pm by David Farrar

Tracy Watkins at Stuff reports:

The three contenders for the Labour leadership have confirmed taxpayers are stumping up for the cost of them flying around the country to pitch for votes.

Labour MPs are also likely to charge their flights to the taxpayer for attending any of the 12 candidates meetings planned around the country over the next two weeks.

The three contenders – Grant Robertson, David Cunliffe and Shane Jones – confirmed they would use the travel perk to campaign over the next twarging their o weeks.

But they will pay for all their other expenses, such as accommodation, out of their own pockets.

Annette King has tried to justify this by saying MPs flights to party conferences get paid by Parliament also.

But I think there is a difference. MPs get invited to or are expected to attend many conferences and engagements around New Zealand. They attend business conferences, union conferences, party conferences, rotary club meetings and the like.

But this is different. This is three MPs choosing to stand for the leadership of a party, and attending meetings explicitly to persuade people to vote for them to become leader.

I think that is closer to a campaign expense, than a parliamentary expense, even though it is within the rules.

Just as the party leaders don’t charge their campaign travel to the taxpayer in a general election, prospective party leaders should not do so in a leadership election. They’re in line for a huge pay rise if they win, so surely paying for a few flights is a good investment?

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Australian parties vote themselves $30 million of taxpayer money

May 29th, 2013 at 12:00 pm by David Farrar

Yahoo reports:

The Labor and Liberal parties have struck a secret deal to siphon more than $30 million of taxpayer funds into political organisations.

Described as a “dirty cash grab” by some senior government MPs, the two big parties agreed to award themselves $1 for every House of Representatives and Senate vote they get at the September 14 poll.

The “administrative funding” will be separate and on top of the election funding paid to parties or candidates who get at least 4 per cent of first preferences.

This rate is $2.47 a vote but will be indexed for inflation on July 1. From the 2010 election, political parties and candidates shared $53 million in election funding.

Disgraceful. This is what the left are pushing for in NZ – MPs voting taxpayer money to their own political parties, to help themselves get elected.

NZ is not totally immune. We have around $2 million effectively given to parties for broadcasting advertisements – but out situation is hugely better than in Australia.

Parties that don’t have to go out to their supporters and members for donations, get corrupt and out of touch. NZ has quite low spending limits for election campaigns, so there is no need for taxpayer funding of political parties.

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Are the Greens using taxpayer funds to get signatures for their petition?

May 29th, 2012 at 4:05 pm by David Farrar

Inventory2 at Keeping Stock blogs:

We’ve just been alerted to something very interesting on Twitter; check out this vacancy on the Student Job Search website:

That’s right Dear Readers; the Green Party, that last bastion of honesty and principle in New Zealand politics is paying people to go out and collect signatures for their petition against the Government’s Mixed Ownership Model, which they still misleadingly refer to as “Asset Sales”.
Two questions come to mind immediately; is it so hard to get people to sign this petition that the Green Party has to pay for people to accost members of the public and bully them into signing; rather like Scientologists do? And can the Green Party give us a categorical assurance that no taxpayer funds are being spent on this initiative?
The category the job is listed under is “Central Government”, so on the face of it the Greens could be using their parliamentary funding to pay people to get signatures for their petition.
Even if the funding is from the Greens, not the taxpayer, I have to say I have never heard of a political party paying students to collect petition signatures before. Isn’t that what you have umm activists for? What does it mean, that they can’t find an activist in Christchurch willing to collect signatures for them?
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HoS on Progressives

June 8th, 2009 at 11:00 am by David Farrar

The Herald on Sunday notes (after we blogged it):

The public pays $164,000 a year to Jim Anderton’s Progressive Party – which sits with Labour, speaks with Labour, votes with Labour, and now campaigns for Labour.

Yep.

Dr Joe Atkinson, a politics lecturer at Auckland University, said the Progressive Party funding was “an anomaly of MMP” as Anderton operated as a Labour MP. Anderton, the sole Progressive MP, sits on the front bench of the debating chamber among Labour MPs, and is the Labour opposition’s spokesman on agriculture.

Associate Professor Andrew Geddis, a constitutional law expert at Otago University, called the Progressive Party as “a convenient fiction”.

That is a great term – a “convenient fiction”. Superb. Anderton is good at these – in 2002 he remained in the House as an Alliance MP even though he had left the party months earlier.

The Progressive Party is allocated $100,000 a year plus $64,320 for electorate funding. And, as an MP and party leader, Anderton receives a salary of $144,500 a year. Anderton was defiant: “What’s the big deal?” he asked.

What is the big deal says Jim? Well Whale responds by quoting Jim:

NZ Herald, May 27 1999, by Vernon Small

News of the extra funding for the list MP and Mana Wahine Party leader provoked outrage yesterday among Opposition MPs, who alleged it was a jackup.

“In my view this action suggests someone who has no chance of being elected as dog-catcher … has been granted over $77,000 on an annual basis for helping to keep the Government of the day in power,” said Alliance leader Jim Anderton, from whose party Mrs Kopu defected.

Mr Anderton said he would seek a review of the funding decision, which follows official parliamentary recognition of Mana Wahine and grants the one-MP party $77,186 for research and office expenses.

…..But Mr Anderton said the funding brought the political process further into disrepute, and he would investigate ways, including a judicial review, to overturn it.

My goodness – back then it was a big deal when it was another MP in a convenient fiction party. Arguably Kopu’s party was more legitimate as it actually contested the ensuing elections.

And further:

The Press, 27 May 1999, Edition 1, on Page 1

Alliance leader Jim Anderton said the payment of extra money to Mrs Kopu was an outrage. He will write to the Parliamentary Services Commission seeking an urgent review of its decision.

He said the action of giving Mrs Kopu the money, and the way the rules had been changed to allow it to happen, “comes as close to being fairly described as corruption” as anything he had seen in his 35-year political career.

So when Jim does it, it is no big deal. When Mrs Kopu did it, it was close to corruption.

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Edwards on MPs and Mt Albert

May 28th, 2009 at 1:30 pm by David Farrar

Bryce Edwards has an excellent post highlighting the huge advantage parliamentary parties have – specifically with the Mt Albert by-election:

Therefore it has to be asked, are all the non-Auckland MPs that are currently flooding into the Mt Albert electorate, doing so via taxpayer funding? Is the Green candidate, and Wellington-based MP, Russel Norman really paying his own way to Auckland and finding his own accommodation during his campaigning?

Good questions.

In Mt Albert there are currently a large number of MPs flooding into the electorate to campaign on behalf of their respective candidates. So far, many of these have been non-Auckland MPs, and therefore likely to be using Parliamentary Service funds to be there.

The one particular non-Auckland MP that appears to have been there the most has been Wellington-based MP Russel Norman – in fact Norman is the only non-Auckland MP running in the electorate. While there is nothing particularly wrong with carpetbagging per se – a ‘term is sometimes used derisively to refer to a politician who runs for public office in an area in which he or she is not originally from and/or has only lived for a very short time’ – most people would in fact have a problem with such carpetbagging being funded by taxpayers. It is therefore Norman that should be the most upfront about who’s paying his way.

There’s another reason that Russel Norman should be called to account for his election spending. More than any other politician – other than perhaps Winston Peters – Norman has been the most populist campaigner on issues of ‘money in politics’. He probably pushed harder than any other for the Electoral Finance Act – even though it proved to be a spectacular ‘own goal’ – and has continued to be the most sanctimonious MP (since Peters) about transparency. He’s probably made more allegations against other MPs and parties than anyone (again, except Winston Peters).

Thus this stone-thrower needs to show that he doesn’t also live in a glass house. Therefore Norman should declare whether he has used any taxpayer funds on his campaign, including travel expenses and accommodation claims for his many, many trips to Mt Albert since Helen Clark announced her departure from Parliament. Anything less than this would make his various campaigns against ‘corruption’ seem rather hollow.

Will the Greens practice what they preach?

Likewise, the other parliamentary parties need to be more upfront about their use of backdoor state funding and MP expenses in their campaigns. Labour needs to show that it has learnt its lessons over the EFA and its pledge card. What about Trevor Mallard, who was recently blogging about his experience on the campaign trail? There seem to be a lot of non-Auckland MPs in Mt Albert recently. Unless they are paying their own way, or legitimately and genuinely in Auckland on other business, their use of tax-payer funding to campaign could be classified as ‘corrupt’. And National and the other parties should also declare how they are paying to send MPs into the electorate to campaign.

I recommend people read the full post – it has mounds of historical infoformation also.

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State funding of political parties

May 26th, 2009 at 10:04 am by David Farrar

The Herald reports:

Prime Minister John Key says he is “not completely closed” to the prospect of using more public funding to run political parties and their campaigns – an apparent softening of National’s vehement opposition to such suggestions in the past.

The question of public funding of parties is one of the central issues of a review of electoral finance law to find a replacement to the now repealed Electoral Finance Act.

First of all, I would not read too much into this. As state funding is within the terms of consultation on electoral financing, he is not ruling it out in advance. This is a good thing as it means the consultation is not a sham.

But it should ring some small warning bells. If you are oppossed to further state funding of parties, then don’t rely on MPs to be against it. Have you say. I will blog next week some further encouragement on this.

Currently, the only state funding for party campaigns is about $3 million in broadcasting allocation to registered parties for election advertising on television and radio.

That is the only direct funding. But parties also gain considerable indirect benefits from being in Parliament – they gain budgets, staff, travel for MPs etc etc. Now this is for parliamentary purposes and I do not advocate it should be reduced. But I think one should recognise there is a political benefit also from this funding. Bryce Edwards will comment no doubt in more detail on this.

If there is a case for taxpayer funding, my inclinations are that it should go to the small parties not in Parliament, to give them an opportunity to have their voices heard at election time. I don’t see a case for giving more money to parliamentary parties that already have a huge advantage over parties not in Parliament.

Green Party co-leader Russel Norman said his party supported at least partial public funding and limits on how much one donor could donate to ensure parties were not dependent on a few wealthy donors.

This excuse holds little sway with me. So long as one has transparency, you can see if a party is dependent on a few wealthy donors and voters can judge that party accordingly. What Noram advocates will actually led to a US style dirty money system where donation limits leads to less transparency as donations go into third parties, or major donors become recruiters of other donors instead. Transparency and simplicity are far preferable that the US system of dirty money that Norman advocates (even if he doesn’t realise that is what he advocates).

It said supporters believed it would limit “actual or perceived corruption or inappropriate influence” because parties would not be as dependent on private donors. It would also help ensure an even playing field for parties whose supporters were not wealthy.

Why stop at an even playing field on wealth. How about time? It is unfair that some parties have supporters who are too busy to volunteer at much time. We shoud have the state force everyone to volunteer the same amount of time to a party to keep it equal.

Also it is unfair some parties have more members than other parties. Who should Labour with 8,000 members get less money than National with close to 40,000?

Many countries where parties do get money from the taxpayer have tighter restrictions on donations, including limiting the amount one person can give and prohibiting donations from corporations and trade unions.

The problem with this, is that most union support is in staff time – not money. During an election campaign hundreds of union staff are unofficially given time off to campaign for Labour and sometimes the Greens. They put up hoardings, supply union vehicles, deliver, door knock etc.

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How some NZ MPs benefit from parliamentary expenses

May 18th, 2009 at 9:22 am by David Farrar

Political watchers around the world have been following the saga of the UK parliamentary expenses scandals. UK Labour has dropped to 22% in the latest poll, as the Telegraph reveals claims for mortgages that were paid off, moat cleaning and the like.

Most of these excesses are not possible in NZ, as MPs don’t get to claim accommodation expenses except rent and interest on mortgages. But even then, we have not been lily white.

Now many readers will remember the scams by Labour’s Marian Hobbs and Phillida Bunkle from the Alliance who were claiming such expenses, despite both being Wellington based MP with homes in Wellington. Bunkle did it by claiming her primary residence was a bach just north of the Wellington boundary, and Hobbs claimed her primary residence was in Christchurch, despite having stood for Wellington Central. This made the scam legal – but not ethical.

The point of such expense regimes, is that an MP is not left worse off for just doing their job. If an Auckland MP has to spend three nights a week in Wellington, then of course they should not pay personally for it. But the idea is not that an MP who normally lives in Wellington, can make some extra money.

But the Bunkle/Hobbs method is not the only way, an MP can benefit from the expenses claims.In the light of the UK revelations, I thought it would be useful to highlight other ways an MP can benefit.

Look at section 3.30(1)(b) of the expense directions and it states an MP can be reimbursed for actual and reasonable accommodation expenses in Wellington, if they live outside the Wellington commuting area for.

(i) accommodation owned by that member; or
(ii) accommodation rented by that member on a continuous basis for use in lieu of overnight accommodation; or
(iii) accommodation in commercial premises; or
(iv) other private accommodation.

Let us look at each of these in turn, and who benefits from what:

(iii) accommodation in commercial premises

This is where the MP stays in a Wellington hotel, as many do. They can claim up to $160 a night, up to a maximum of $24,000 a year. That means a maximum of 150 nights a year can be claimed – an average of three nights a week.

In this case the MP gains no benefit. It is nice and simple. Not that popular with some MPs though as it means they have to book in everytime, and have no permanent base where they can leave clothes etc.

(iii) other private accommodation

This is where the MP stays in a private residence not owned by them – probably owned by a friend. They can claim up to $50 a night, up to a maximum of $24,000 a year.

In this case the MP gains no benefit, but the home owner can benefit, and they may be related to the MP. Having said that I am not sure if any MP uses this option.

(i) accommodation owned by that member

This is a potential problem area, but note section 3.30(2) avoids most of the UK problems:

No principal component of any mortgage payment or any capital improvement to premises may be claimed under this clause.

So an MP can only claim the interest on their property. The maximum is again $24,000 a year, so if interest is at say 8%, then the maximum will be claimed if the principal is $300,000 or more.

This option does provide some potential benefits to the MP.

MPs can maximise benefits from this situation, so that the taxpayer pays the maximum$24,000. Let us say the MP buys two $500,000 houses with $600,000 of equity and $400,000 from the bank. House A is in Wellington and House B in the electorate.

Normally you may have House A and House B both with $300,000 of equity and $200,000 of mortgage. However at 8% interest it means the MP can only claim $16,000 from the taxpayer for House A. So the smart MP arranges their finances so that House A is $200,000 equity and $300,000 mortgage and House B is $400,000 equity and $100,000 mortgage.  This means they get an extra $8,000 a year from the taxpayer.

Now to be fair to said MPs, there is an opportunity cost of them living at their own place – it means they are not renting it out to someone else. They may be able to rent it out for $24,000 a year – or even more, if they did not use it at their second home.

But nevertheless they do have an incentive to keep the mortgage high on their Wellington home, so they get paid the maximum $24,000. One could arrange it so one is getting $24,000 a year on a $350,000 apartment. Not many landlords would be able to rent out a $350,000 apartment for $460 a week, so the MP does make a significant profit, plus they have a guaranteed tenant – themselves.

So a question to be pondered, is should an MP not be eligible to claim their interest payments as an accommodation expense? Otherwise you have an incentive for them to keep the interest payments high to maximise the expense they can claim.

Maybe a journalist could ask how many MPs are living in a place they own in Wellington, and what proportion of them are claiming the maximum $24,000 in interest payments? The Parliamentary Service won’t release individual details, but they might release summary information.

But for the really smart MP, there is an even better way to maximise your profits from the taxpayer. You see eventually the house you own will have the principal repaid, meaning the interest you can claim falls to under $24,000 a year. How do you ensure you keep it at $24,000 a year?

(ii) accommodation rented by that member on a continuous basis for use in lieu of overnight accommodation

This is where the MP either rents an apartment outright for their exclusive use, or is a flatmate in an apartment. The maximum you can claim is $24,000 a year, which is $460 a week. Many MPs do this, as it gives them a permanent base where they can leave clothes, have some food stocked up etc. The owner of the property benefits as they get a tenant, who generally will not cause any problems in terms of non payment, damage etc – and they will often be a guaranteed tenant for three years. MPs don’t tend to change apartments in Wellington a lot, as it is mainly just a place to sleep three nights a week.

On the face of it, the MP doesn’t benefit from such an arrangement – the landlord does. But what if the MP is effectively a landlord? How – you set up your own personalised superannuation scheme, and get your super scheme to buy the apartment, and rent it to you for the maximum $24,000 a year.

This way you can get $24,000 a year from the taxpayer, even long after the mortgage has been paid off. Now some will say, but if the MP was not renting it to themselves, they could rent it to someone else. Yes – but see above about the massive benefits of renting to an MP – guaranteed income with no breaks for three years. No having to pay a property manager to manage the property etc.

Now the Parliamentary Service will tell you that when an MP rents their own house through their Super Fund, they get an independent market valuation. This is true, but valuations are not a precise science. That would stop an absolute hovel being rented out for $460 a week, but really you know the difference between a $400 and $450 a week apartment is very subjective. And MPs will buy apartments that they know they can get the maximum allowance for.

No matter how much one tries to mitigate, there is a fundamental conflict in my opinion between the MP effectively owning the property through their Super Scheme, and being the tenant with the taxpayer paying the tenancy.

It is all within the rules, but so were most of the rorts in the UK. As David Cameron said, the issue is not the rules, but whether the behaviour is ethical and correct. And most of all, it is about whether the rules should allow an MP to maximise profit from their Wellington accommodation.

The Greens have been doing this for years, and they claimed a while back:

This is also what we are trying to do in the Green Futures Superannuation Fund, set up in 1997 by the Green MPs to invest our own savings. We started by investing in housing for MPs to live in that was close to Parliament so we can all walk to work.

Now this is just nonsense. They did not set up the super scheme to so they could live close to Parliament. There are hundreds of houses and apartments available for lease near Parliament. They set up the scheme so they could maximise the income from the taxpayer for renting the property to themselves. They almost admit this later:

With the security of the property market as a base we have now also invested in NZ’s only locally owned and made wind generation company … All very small stuff, as befits the amount we have to invest, but it has still outperformed larger funds over the last year.

Or maybe it outperformed the larger funds because it had a guaranteed taxpayer funded tenant – themselves.

How much can an MP benefit from the Super Scheme owning the rental property rort? Well here’s a typical example. Take this apartment in Thorndon which has rent set for $460 a week. Its GV is $340,000.

Now an MP’s salary is $131,000 a year. They get a super scheme subsidy of 2.5:1 up to a maximum 20%. This means they put in 8% and the subsidy is 20%, so 28% of $131,000 is paid into their super scheme every year – that is $36,680.

Now let us say the MP (through the super scheme) borrows the entire $340,000 to buy the property (we’ll ignore deposits for now and assume they have property elsewhere to guarantee this mortgage).The MP gets a 5.99% mortgage from Kiwibank. This means the interest in year one is $340,000 x 5.99% = $20,366. However their Super Fund puts in $36,680 plus the taxpayer again puts in $24,000 through the $460 a week rent. That means the interest of $20,366 is matched three times over with the $60,680 of repayments.

If you repeat this each year, then within seven years that MP’s Super Fund owns that $340,000 property outright (plus any increase in valuation).

This is not a new development. The Greens have been doing this since at least 2001. So do many other MPs. I’ll be honest – if I was an MP I would probably do exactly the same – why wouldn’t you?

It is all within the rules, but it is a loophole. If you own the property yourself, you can claim interest only. If you own it through a corporate shell such as your Super Fund, then you can get the taxpayer to pay rent on your behalf to yourself.

So the question we should be asking, in the wake of the UK experience, is should the rules be changed? Should we ban MPs from claiming accommodation expenses for properties they own (directly or indirectly), or have a beneficial interest in?

If an MP wants to have their Super Fund invest in property, then they still can. But they, like any other landlord, should have to go out and find tenants for it who are willing to pay the market price. For example let the “Green Futures Superannuation Fund” find its own tenants, rather than the guaranteed income of the Parliamentary Service!

While I have used the Greens Fund as an example, this is because it is in the public domain. This is not a criticism of the Greens only. I am sure MPs from all parties take advantage of the current rules, and this should not be surprising. Again the issue for me, is whether the rules should be changed to prevent MPs claiming accommodation expenses for any property they own – either directly or through a Super Fund. At the end of the day you should not be both landlord and tenant, when the taxpayer pays the bill.

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Shoddy story on TV3

March 12th, 2009 at 8:10 pm by David Farrar

TV3 just did a shock expose story on something that has been in the public domain since November 2008. Just because they didn’t do research doesn’t excuse them saying:

Had this not been leaked, it raises the question of whether National would have ever told anyone.

The issue is the agreement to fund an extra staff member in Out of Parliament offices of MPs whose electorate is larger than 20,000 sq km or is a Maori seat. I’ll come back to the merits of the policy later. But first the total beatup that this was some sort of secret only revealed by leaked documents. Have a look at the actual supply and confidence agreement signed by National and the Maori Party on the 16th of November 2008. It says:

The challenges of servicing the disproportionately large size of the Maori electorates will be addressed through immediate implementation of the recommendation from the March 2007 report of the Committee of the Third Triennial Review (Goulter report).

There is inequity in respect of the support that Parliament provides the very large electorates compared to the very small ones. One comparison is between Te Tai Tonga (147,000 sq km) and Epsom (22 sq km).

So this was as public as you can get. The supply and confidence agreement was massively reported on at the time. TV3 has stuffed up big time by painting this as some sort of hidden initiative.

The other aspect totally lacking in the TV3 story was what this decision was based on. As the supply and confidence agreement states, it was recommended by a neutral independent reviewer (John Goulter) in March 2007. And what did the Goulter review say. On page 92:

“That all Maori constituent Members of Parliament and each constituency Member of Parliament with an electorate in excess of 20,000 sq km in area be entitled to the services of an extra staff member to equate to three full-time equivalent out of Parliament support staff members”

So this was a open and public decision to implement the recommendation of a neutral expert reviewer. That does not mean it was a good decision (in fact I disagree with aspects of it), but TV3 were dishonest with their portrayal of it as National MPs voting them and their allies more money in secret. They even listed the MPs names with dollar signs next to them as if they were personally getting the money. In fact they are merely getting permission to hire a third staff member.

Now as it happens this issue has been reported on before – by myself and Home Paddock. Despite both being Nats we have been critical of the actual policy because of an inequality. The smallest Maori seat, as Home Paddock pointed out on 16 November is Tamaki Makaurau being only 730 sq kms in size. So why include that in extra resources?

I’d personally blogged twice on this issue previously. I actually commented when the agreement was announced:

I would rather decisions like this are made through the Parliamentary Service Commission. But this was recommended by the Goulter review, and two offices are not enough for some of those large electorates.

I didn’t like the idea of funding arrangements being decided bilaterally, but noted the fact it had been recommended mitigated that.

Then I linked to Home Paddock’s post and commented on 18 November 2008:

It is hard to justify a third staffer for Tamaki Makauru, when it is so much smaller than the other Maori seats.

I went on to propose the policy should be based on size only, so should be:

To be fair to all large seats, the agreement should be modified to be either:

  1. Only three of the Maori seats and four general seats over 20,000 sq km
  2. Five Maori seats, and four general seats over 15,000 sq km
  3. Six Maori seats and six general seats over 12,500 sq km
  4. All seven Maori seats and 27 general seats over 730 sq km

So you actually had a couple of Nats four months ago criticising the policy, before the media had even run a single story on it.

Really TV3 actually stuffed in every regard. The story they should have run is on the inequality of including Tamaki Makaurau when it is not a large seat. That is the legitimate issue you can criticise the decision over. I’d like to ask John Goulter (who made the recommendation) why he included them.

But instead of doing analysis they tried to portray this as some sort of secret hidden decision that only came to light due to a leak. They either did not know or decided not to mention that it had been announced four months ago. And they also neglected to mention it was implementing the decision of a neutral independent reviewer. A highly relevant fact.

UPDATE: looking more closely at the TV3 story, it looks like the Government decided not to fund Tamaki Makaurau for a third staff member (they only list the other six Maori seats), despite the recommendation and agreement it be all Maori seats. If correct, that is a good thing. It also means the story is then even more of a beat up.

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PSA supports EFA repeal

February 10th, 2009 at 2:46 pm by David Farrar

Despite supporting the Electoral Finance Act at the time, the PSA has now come out and said it supports its repeal. Better late than never.

But of course, there is a sting. They want taxpayers to fund political party campaigns, rather than members and supporters.

It is silly to keep pushing for taxpayer funding of political parties, because all the parties have such a huge conflict of interest on this topic. Putting aside the argument for and against, it would be improper for parties to vote themselves money without the voters approving it. So if you want state funding of political parties, then either get the public to vote for it in a referendum, or have political parties make an explicit manifesto promise that they will introduce it, so if those parties win they have a mandate to do so.

What should not happen is political parties voting themselves money with no mandate from the public.

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ODT on bad laws

January 19th, 2009 at 12:05 pm by David Farrar

The ODT looks at the issue of bad laws:

Parliament passed some poorly-drafted law during the term of the Clark Government, notably the Electoral Finance Act 2007, a most controversial set of laws widely condemned across the legal and quasi-legal community.

The Electoral Commission noted that it had had a “chilling effect” on political participation, but even before it was passed into law the Law Society and the Human Rights Commission had condemned it.

But then we had the example of a bad practice being retrospectively tidied up to legitimise the original activity, in the Appropriation (Continuation of Interim Meaning of Funding for Parliamentary Purposes) Act, which legally permitted political parties to continue to spend our money in the election campaign for purposes the Auditor-general had earlier determined were illegal.

Of course the two laws, were designed to work together. One was designed to silence critics of the Government while the other was designed to allow the Government to use taxpayer money for its own election campaign.

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It’s legal because they changed the law

October 22nd, 2008 at 7:48 am by David Farrar

There has finally been some attention paid by the media to Labour’s “information kit for the over 60s” which their MPs are posting and handing out in the tens of thousands.

Matthew Hooton has blogged on this several times in recent days.

This is a continuation of Labour’s 2005 pledge card strategy where Labour tries to get the taxpayer to pay for material it can use during the election campaign – and also tries to not have it count towards as part of their $2.4 million spending limit.

There are two questions involved:

  1. Is it appropriate and legal for the info kit to be paid for by The Parliamentary Service (taxpayers) for distribution during the election campaign?
  2. Does the info kit constitute an election advertisement under the Electoral Finance Act?

The answer to (1) is that it is legal – but, and this is important, only because Labour, NZ First and Greens rammed through a law change to over-turn the Auditor General’s interpretation of the previous law.

The Auditor-General could well have found, if the law had not changed, that this info kit was electioneering – especially as it was produced and distributed so close to an election. If it was a genuine info kit it would have been produced and distributed last year or even earlier this year.

But Labour First and the Greens changed the law (without even giving the public a chance to submit on the law change) so that only material which explicitly sought support for a party (as oppossed to implicitly) is covered. Under this law change Labour’s 2005 pledge card could be legally taxpayer funded again.

My solution to this rorting of the system is simple – ban taxpayer funding of such advertising in the last 90 days. If it was a genuine info kit then they can produce and distribute it when there is not an election a few days away.

This is all part of Labour’s strategy to hold its most marginal seats. Part One was the Electoral Finance Act to silence new candidates by extending the $20,000 limit in the regulated period from 90 days to all of election year. This is a limit of around 5c/voter/month. Part Two was changing the law so incumbent MPs could use taxpayer funded advertising during the election campaign. It is all designed to keep incumbent MPs in their jobs.

Considering the huge amount of interest in the pledge card last time, it is surprising it has taken so long for the media to cover this issue. Has TVNZ or Radio NZ told their viewers and listeners that Labour and “friends” changed the law to make these info kits legal?

The second issue is whether or not the info kits are advertisements under the Electoral Finance Act. I tend to think they are not. The issue for me is whether MPs should be allowed to use their taxpayer funded budgets so close to an election to be writing and sending stuff to tens of thousands of voters.

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Labour never learn

September 5th, 2008 at 4:51 pm by David Farrar

Labour have learnt nothing from the Electoral Finance Act. It was a partisan attempt to skew the electoral laws in their favour. And they have done it again their announcement of an expert panel to review electoral administration and political party funding.

Electoral law does not belong to Labour. It represents the basic constitution of our country. And once again they are desperately trying to bring in further state funding of political parties.

Labour have announced the expert panel just weeks out from a general election. That is bad enough and a breach of conventions. A panel which reviews electoral law is a bloody significant appointment. But they totally failed to consult the Opposition on its composition. Electoral law issues should be as bi-partisan as possible. Sure at the end of the day, parties may have to agree to disagree, but you do not start off the process by excluding the major Opposition party.

I made this point back in June, when the proposal was announced. I said:

  1. The independent experts must be chosen by a super majority of parliamentary parties, not just by the Government of the day. The formula which I like is that any appointments must be agreed to by party leaders representing over 75% of the MPs and over 50% of the parties in Parliament. This means that not only must both major parties agree, but so must at least half of the minor parties.
  2. The issues, terms of references and high level process must also be signed off by that super-majority. The most unforgivable crime that Labour and the Greens have done with the EFA is to treat electoral law as a bauble for the winner, rather than a bipartisan constitutional law.
  3. Issues referred to a Citizen’s Jury should be in totality, not just a narrow aspect such as taxpayer funding of political parties. It is ridicolous to exclude from consideration all the issues dealt with by the Electoral Finance Act. In fact the EFA should be abolished immediately upon a change of Government, and a citizen’s jury could be used as part of the process of consulting on and determining its replacement.

You see the concept of a panel of exports and a citizen’s jury is not without merit. But as usual Labour’s desperation to skew everything, destroys what should be a worthwhile endeavour. Now that was not just my view back in June, but also Green co-leader Russel Norman agreed partially with me:

David Farrar says some silly National Party things about the citz assembly but he also makes some good points over at Kiwiblog. He says the political party buyin should be as broad as possible – I agree with that but don’t know how to acheive it give the politicisation of the issue.

He also says that the terms of reference should be broad. I agree that they should be broader than simply ’state funding of parties’ but after talking to Jonathan Rose (an expert on citz assemblies) I’m not sure the ToR should be too broad. He says that if they’re too broad the assembly lacks focus. maybe there is a compromise in there somewhere.

So did Russel stand up to Labour and say don’t just appoint a panel without consulting the other parties. We insist you go to National and ask if they have any recommended panelists and what they think of the ones you propose? No they roll over, as usual:

“The Forum will provide much needed independence in the review of election funding”, Green Party Co-Leader Russel Norman says.

Independent? When the Government hand picks the panel that will advise them?

“While the Act was needed to close loopholes in the law revealed at the last election, we need a more inclusive and disinterested process to further consider the bigger picture of political party and election funding.

“We hope that all New Zealanders will support this process and that we can find a place to have some non-partisan reasoned discussion about the future of our democracy.”

Non-partisan??? Fuck all hope of that considering there was *zero* consultation with the Opposition.

Now I am not attacking the integrity of any the three panelists. I know two of them, and they have a lot to contribute in this area. However the Government has obviously chosen the panel, based on the known viewpoints of some of them. Associate Professor Geddis has written supportively of state funding on many occassions and in the Press described the issue as:

This failure to really debate the pros and cons of public funding is regrettable. The public was never given the choice of whether it would rather politicians get their money from large, hidden, private donations or taxpayer grants.

Now if the citizens assembly gets the choice described to them in that terms, I can guarantee you what they will say. Just as if you describe it as “Should parties raise their own money from volunteers and supporters or take it from unwilling taxpayers” you would get a quite different result from the assembly.

Now I am not saying Geddis, would put choices in as crude terms as he did in The Press article. He has written some very useful stuff on the issue. I am not even saying I would not have him on the panel. What I am saying is that the process has been tainted from the very beginning by the lack of consultation with the Opposition.

Also ironically Andrew Geddis now is the victim of something he advocated against:

First, the failure to consult with opposition parties before introducing the Bill to the House leaves it vulnerable to allegations of partisanship. Electoral law should not be, nor be seen to be, a vehicle for one party to gain an advantage over others.

Geddis is right. Maybe he should have made a condition of his participation on the panel, being that the Government consult on its membership.

The panel and assembly should be terminated if there is a change of Government. However I would advocate that a National-led Government look at using a similiar mechanism in reviewing parts of the Electoral Act post-election. And they should consult with and get buy-in from all the parties on the composition and terms of reference of such a panel.

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Citizen’s Juries

June 5th, 2008 at 6:04 am by David Farrar

The Herald reports on how the Greens want to get a Citizen’s Jury on the issue of state funding of political parties underway as soon as possible, so National can’t abolish it after the election.

Now if done the right way, I am quite a fan of citizen’s juries. But everything about this is being done the wrong way.

The outcome has been predetermined. Instead of being set up in bipartisan fashion on matters such as the type of electoral system, it has been set up to deliver just one result – increased taxpayer funding of political parties. Labour and the Greens both want that as the outcome, tried to do it through the EFA, and having somewhat failed are now trying to do it again.

Labour are quite simply corrupt when it comes to electoral law issues, and any process which involves them as Government choosing the expert panel which advises the Citizen’s Jury should be treated as naked self interest. Hell Mike Williams will probably end up as the Chair.

The Greens are little better than Labour in this area. They have absolutely no comitment to a fair process unless it achieves the outcome they want. Look at the Royal Commission on Genetic Engineering? That had it all – independent commissioners, scientific evidence, hearings etc. And the moment it didn’t recommend what the Greens wanted – they attacked it.

So this process is a total sham. It is designed for one purpose only – to let Labour and the Greens use more taxpayer money on their election campaigns. After what Labour and Greens did with the EFA, they should frankly be seen as incompetent to have a say on these issues.

Now this is not to say the concept of Citizen’s Juries do not have a place in electoral law making. I think they do. They can provide some very useful input if done the right way. But the way I would use such Juries are as follows:

  1. The independent experts must be chosen by a super majority of parliamentary parties, not just by the Government of the day. The formula which I like is that any appointments must be agreed to by party leaders representing over 75% of the MPs and over 50% of the parties in Parliament. This means that not only must both major parties agree, but so must at least half of the minor parties.
  2. The issues, terms of references and high level process must also be signed off by that super-majority. The most unforgivable crime that Labour and the Greens have done with the EFA is to treat electoral law as a bauble for the winner, rather than a bipartisan constitutional law.
  3. Issues referred to a Citizen’s Jury should be in totality, not just a narrow aspect such as taxpayer funding of political parties. It is ridicolous to exclude from consideration all the issues dealt with by the Electoral Finance Act. In fact the EFA should be abolished immediately upon a change of Government, and a citizen’s jury could be used as part of the process of consulting on and determining its replacement.

It is a shame that what is a perfectly fine concept is being damaged by its use by the Greens and Labour in such a partisan fashion. I mean Russel Norman is already calling for its timelines to be determined so that National can be attacked over it, rather than any sense of what a proper time-frame would be.

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Pay it Back

March 25th, 2008 at 11:08 am by David Farrar

It is now two and a half years since parliamentary parties illegally spent taxpayer money on their election campaigns. Labour, National, ACT and the Greens have paid the money back in full.

United Future still owe around $50,000. They have paid back over $100,000 so far.

NZ First are still to pay back a cent. Their actions scream contempt for taxpayers as they delay, delay and delay.

Audrey Young blogged at the beginning of the month that the pressure needs to go on NZ First.

I agree. And on United Future to finish their payments. It has been nine months without even a further part payment.

Candidates for NZ First and United Future will have a very rough time at public meetings if they do not pay it back.

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The Electoral Finance Act strikes again

March 20th, 2008 at 11:17 am by David Farrar

I blogged last Friday on how the Electoral Finance Act’s extension of the regulated period to all of 2008, was causing huge problems in Parliament. MPs face the possibility of multiple electoral petitions after the election seeking court rulings on whether their taxpayer funded spending counts as an election expense or not.

I understand from the last electoral petition, that defending one costs somewhere between $100,000 to $200,000. Labour is going to have to get a mighty big loan from Owen Glenn to help them cover the costs of potentially up to 20 electoral petitions, unless they adopt an incredibly conservative approach to their parliamentary spending.

The Herald reports that taxpayer funded publications will also now be able to carry party political authorisation statements from party financial agents. So they will have a parliamentary crest on them which is meant to represent the fact the publication is not electioneering and taxpayer funded, but also have a party financial agent authorisation on them which is meant to represent they are electioneering.

Electoral Commission chief executive Helena Catt fuelled the caution of political parties, saying she would not exempt material as being advertising simply because it had a parliamentary crest.

What really surprised MPs was that she said if it was advertising, it should also be counted against a party or candidate as an election expense. MPs passing the law late last year believed the act gave their parliamentary material an exemption on the expenses ledger if it was produced in their capacity as an MP.

But Dr Catt said Parliament gave the commission virtually no guidance as to what that term meant and the commission was working towards producing its own guidance.

This should not be a huge surprise. Dr Catt went to the trouble of publicly warning last year that the Act was unclear with regards to the parliamentary exemption. She even went on radio to discuss it.

Now what happened after that is Annette King as Justice Minister came up with a definiton, which seemed to satisfy the Electoral Commission. But after beign squashed by the ninth floor (as Annette’s definition would have ruled out material such as Labour’s pledge card) she humiliated herself by publicly recanting on her definition and repeatedly declaring to Parliament that she was wrong.   So the poor Electoral Commission have ended up having to work out their own definition.

And I suspect it is almost inevitable that those definitions will be tested in court.

This is a timely reminder to people that if you receive at home or work any material at all with the parliamentary crest on it, submit it to the You Paid For It website. Submitting it to the website doesn’t mean that one is alleging the publication should not have been funded by Parliament and it doesn’t necessarily mean the publication should be included as an election advertisement and/or expense. But it will preserve a copy which can be scrutinised by legal experts for possible use in electoral petitions or prosecutions. It also provides transparency over what has been approved by The Parliamentary Service.

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Free meeting space

March 3rd, 2008 at 4:53 pm by David Farrar

Nice of the taxpayer to provide free meeting space for worthy groups. See below e-mail:

Date: Sun, 2 Mar 2008 22:50:23 +1300
From:
To:
Subject: Reminder: Harbour Branch AGM – Monday 3 March

Dear Harbour Branch members,

This email is to remind you of the Harbour Branch AGM, which will take place on Monday 3 March from 6.30pm-7.30pm at Marian Hobbs’ Electorate Office on Willis St. We will follow the AGM with drinks – at a place to be decided on the night!

If you are interested in any of the Officer or Delegate positions listed below, please let me know in advance, or attend the meeting.

The Agenda is as follows:

1. Apologies

2. Confirmation of Minutes of previous AGM

3. Matters Arising

4. Correspondence

5. Election of Officers – Chair, Vice Chair, Secretary, Treasurer, Women’s Liaison Officer

6. Election of delegates to the Labour Electorate Committee

7. Election of delegates to Region 4 (Wellington) List Conference

Note: The Regional List selection is being held on Saturday 15 March

8. General Business – Election year campaigning and fundraising

I look forward to seeing you there.

Best wishes,

Secretary | Harbour Branch

Not that I think it is a big deal.  I am sure that is not the only office to host a party meeting, but in Wellington especially I would have thought the presence of Labour’s own head office would be a better location.

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