Political funding in New Zealand

Only quite recently (1993, 2009) political funding in New Zealand has become an issue of public policy. Now there is direct and indirect funding by public money as well as a skeleton regulation of income, expenditure and transparency.[1]

Sources of funds

Traditional sources (Members, affiliates and donors)

Just like in Australia (and possibly the United Kingdom) the two major parties of New Zealand rely heavily on corporate and union contributions. The Nationals get large funds from business sources. The Labour party was established as the political arm of the trade union movement, and is traditionally funded by the unions.[2]

There is little information about party revenue from membership dues. Even if membership figures are available they do not reveal much about political income from dues. Dues per member can be quite low or they may be collected sloppily by the party concerned. Moreover, the split of membership revenue between central and local party organisations is rarely available. Despite such lack of details the International Institute for Democracy and Electoral Assistance assumes that neither of the two major parties has ever collected a significant part of its headquarters' funds from individual party members.[3]

Public funding

New Zealand provides free broadcasting time for all parties, which present a minimum number of candidates. The allocation formula seeks to grant a fair opportunity to each party, taking into account the number of votes polled in the previous election or other indications of popular support (such as public opinion polls or number of party members). There is neither provision of free media time for individual candidates nor a tax benefit for political donations.[4]

A critical observer of New Zealand politics contends that "about 1200 staff are employed by the Ministerial and Parliamentary Services, many of whom carry out party political research, marketing and organising. ... regional party organisers (previously paid by the party organization) have been replaced by electoral agents (paid for by the Parliamentary Service)."[5] The number of staff (as given by that author) may be overblown, but the problem of proper demarcation between (national and local) party organisations on the one hand and political institutions (like Parliament and Ministries) on the other is real.

Among the cash grants to competing parties there is a regular entitlement for parliamentary purposes as well as a broadcasting allocation during election campaigns. Calculated on a per voter base such subsidies to political parties are quite generous among the anglophone democracies.[6] As a part of parties' total income the cash subsidy was about 18 per cent in 1996.[7] Taking into account that meanwhile a new subsidy has been added the percentage should be much higher now.[8]

Spending on politics (Routine and campaigns)

As Anglo-Saxon democracies are considered to be campaign-oriented it is frequently expected that their political parties spend most of their money on campaign expenses. However, the split between campaign and routine spending does not always meet such expectations. In New Zealand party headquarters have stepped up their routine activities in recent years and shifted their budgets to cover such expenses.[9] Despite such general development anglophone democracies still rank in the bottom half of political spenders as far as the general level of money expanded for political purposes is concerned.[10]

Regulation and enforcement

Regulation

Like a few other established democracies (e.g. Canada and the United Kingdom) New Zealand election law stipulates statutory limits for political spending by individuals, groups or organisations that occurs at election times in order to influence political discourse in general or the outcome of a specific election in particular.[11] In New Zealand spending limits for political parties and candidates (i.e. their campaign spending) do not include some typical election expenses (e.g. opinion polling, travel costs, consultancy fees).[12]

Political contributions by foreign donors are allowed as long as they do not exceed NZD 1,500. There is no other limit to any political contribution made to parties and/ or candidates, either for election campaign or during specific time periods.[13] Donations by government contractors (and possibly by state-owned enterprises) are allowed, too.[14]

Obviously the 'class-conscious' strategies of political funding (business donations and trade union contributions) are a major obstacle to an outright ban of such 'institutional' sources of political funds which, nevertheless, has been enacted in Canada and the United States (where such funding practices also used to be applied in the old days).[15]

Parties and candidates have to file financial reports ('donation statements') that do not cover expenses, just source of revenue. The threshold for the disclosure of donations to party political parties is quite low (NZD 15,000). Moreover, a donor's identity can be concealed in several ways (among them: conduit organisations, 'straw' or 'faceless' donors). Quite tellingly the average reported amount of anonymous donations trebled between 1996 and 2002.[16]

Enforcement

The Electoral Commission of New Zealand (ECNZ), the body that organises elections, is also in charge of collecting and monitoring financial reports by parties and candidates. However, its mandate to investigate, enforce and sanction political finance rules is not very strong. The ECNZ does not carry out investigations and it would only report if the case went to court (after being investigated by the police). Following the 2005 election the ECNZ reported 17 potential offences (some of them relating to campaign finance rules) to the police, which did not prosecute any of the cases.[17] Because the rules (as detailed above) are ridden with loopholes, their enforcement does not significantly influence the real flow of funds into party coffers and out of them. In 2005, both major parties exceeded the statutory spending limits without being sanctioned.[18]

Sources

References

  1. ↑ http://www.idea.int/political-finance/country.cfm?id=171.
  2. ↑ http://www.idea.int/publications/funding-of-political parties-and-election-campaigns/upload/foppec-p8.pdf, p. 259.
  3. ↑ http://www.idea.int/publications/funding-of-political-parties-and-election-campaigns/upload/foppec-p8.pdf, pp. 264, 294.
  4. ↑ http://www.idea.int/publications/funding-of-political parties-and-election-campaigns/upload/foppec-p8.pdf, p. 269.
  5. ↑ Edwards, Bryce: 'Political Finance and Inequality in New Zealand', New Zealand Sociology, vol. 23, no. 2, 2008, p. 9.
  6. ↑ http://www.idea.int/publications/funding-of-political parties-and-election-campaigns/upload/foppec-p8.pdf, pp. 270-1.
  7. ↑ Vowles, Jack: 'Parties and Society in New Zealand', in: Paul Webb, David Farrell and Ian Holliday (eds.): Political Parties in Advanced Industrial Democracies, Oxford: Oxford University Press, 2002, p. 422.
  8. ↑ http://www.idea.int/publications/funding-of-political parties-and-election-campaigns/upload/foppec-p8.pdf, p. 272.
  9. ↑ Nassmacher, Karl-Heinz: The Funding of Party Competition, Baden-Baden: Nomos, 2009, pp. 77-8, 80-2.
  10. ↑ Nassmacher, Karl-Heinz: The Funding of Party Competition, Baden-Baden: Nomos, 2009, pp. 115, 118.
  11. ↑ http://www.idea.int/publications/funding-of-political parties-and-election-campaigns/upload/foppec-p8.pdf, pp. 259-60.
  12. ↑ Geddis, Andrew: 'Rethinking the Funding of New Zealand's Election Campaigns', Policy Quarterly, vol. 3, no. 1, p. 7; Geddis, Andrew: 'The Electoral (Finance Reform and Advance Voting) Amendment Bill', Policy Quarterly, vol. 6, no.3, 2010, p. 6.
  13. ↑ http://www.idea.int/political-finance/country.cfm?id=171 Questions 15 and 16.
  14. ↑ http://www.idea.int/political-finance/country.cfm?id=171, Questions 1 and 2.
  15. ↑ http://www.idea.int/publications/funding-of-political parties-and-election-campaigns/upload/foppec-p8.pdf, p. 259.
  16. ↑ Wilson, John F.: Donations to Political Parties: Disclosure Regimes, 2004; available at: http://www.parliament.nz/resource/0000001047, pp. 4, 19-20; Geddis, Andrew: 'Rethinking the Funding of New Zealand's Election Campaigns', Policy Quarterly, vol. 3, no. 1, 2007, p. 5.
  17. ↑ Geddis, Andrew: 'Rethinking the Funding of New Zealand's Election Campaigns', Policy Quarterly, vol. 3, no. 1, 2007, p. 8.
  18. ↑ Geddis, Andrew: 'Rethinking the Funding of New Zealand's Election Campaigns', Policy Quarterly, vol. 3, no. 1, p. 7; Geddis, Andrew: 'The Electoral (Finance Reform and Advance Voting) Amendment Bill', Policy Quarterly, vol. 6, no.3, 2010, p. 6.

Bibliography

Edwards, Bryce: 'Political Finance and Inequality in New Zealand', New Zealand Sociology, vol. 23, no. 2, 2008, pp. 4–17.

Geddis, Andrew: 'Rethinking the Funding of New Zealand's Election Campaigns', Policy Quarterly, vol. 3, no. 1, 2007, pp. 3–10.

Geddis, Andrew: 'The Electoral (Finance Reform and Advance Voting) Amendment Bill', Policy Quarterly, vol. 6, no.3, 2010, pp. 3–7.

Orr, Graeme: 'Public Money and Electioneering. A View from across the Tasman', Policy Quarterly, vol. 6, no. 3, 2010, pp. 21–25.

Tham, Joo-Cheong: 'Regulating Political Contributions. Another View from Across the Tasman', Policy Quarterly, vol. 6, no. 3, 2010, pp. 26–30.

Vowles, Jack: 'Parties and Society in New Zealand', in: Paul Webb, David Farrell and Ian Holliday (eds.): Political Parties in Advanced Industrial Democracies, Oxford: Oxford University Press, 2002, pp. 409–37.

Wilson, John F.: Donations to Political Parties: Disclosure Regimes, 2004; available at: http://www.parliament.nz/resource/0000001047

External links

See also