Edwards on Political Finance
Otago University Lecturer Bryce Edwards had an article on Political Finance published in the latest NZ Law Journal. Once can read a pdf of the article here.
He makes a number of interesting findings:
- The US political finance system is one of the most regulated in the world
- NZ has been shifting more towards a US style system
- Countries where political finance is relatively unregulated tend to have relatively low levels of campaign spending
- Greater regulation leads to greater loopholes, leading to even greater regulation and inevitably great complexity
- In the US companies and trade unions are banned from donating to candidates and individuals can not donate more than $2,200, yet enormous “soft money” goes to political action committees instead.
- In NZ a political party could set up a business unit which provides advice to businesses or unions, and could charge $1 million for such advice, and that would not be counted as a donation to be disclosed.
- That rhetoric in NZ that only people with legitimate issues should be free to advocate is highly dangerous as the state gets to decide what and who is legitimate – a flashback to Muldoon in 1979 who mooted banning the Socialist Unity Party
- The lesson from the US is clear – political finance regulation stifles political competion and favours the wealthy.
- Poor people are deterred from participation in politics when the compliance costs get high.
- Voters have a healthy scepticism against parties and candidates trying to “buy” their way into office and this can be the most effective safeguard.
- Political finance regulations are always designed to benefit one party over another – it is very hard to get “neutral” regulations.
- Democracy is enhanced by parties having sovereignty over their own affairs, and voters making the final decision on whether they approve of how a party conducts its affairs.
It is ironic that Labour, NZ First and the Greens were so insistent at foisting on NZ an American style political finance system.