Friday, July 22, 2022

Bryce Edwards: Public submissions on political donation reform released

Is it ironic that the Government is reforming rules around secret political donations in a very secretive way? There has been overwhelming public demand for more openness about how politicians raise their money, but the Government and officials have been less than transparent and very restrictive over the whole submission process.

The public had a very limited opportunity to give feedback on the Government’s first proposals for political donation reform. The Ministry of Justice called for submissions over the Christmas New Year period, allowing an extremely short timeframe, with submissions closing on January 25. Critics might be forgiven for being cynical about how much public input the Government really wanted.

Further alarm bells have been ringing for those concerned about open government, due to the fact that the Ministry of Justice has been attempting to prevent the public submissions from being released to the public. The Ministry wanted to keep these for Cabinet ministers eyes only.

Battles to obtain public information

As an academic researcher of political finance I have been battling with the Ministry over many months to be provided with copies of the submissions. I first requested the files in early April, but have had various fobbing off communications from the Ministry and attempts to decline my Official Information Act request. One request was ignored because I had failed to cite the “Official Information Act” in my communications (but, no this isn’t a good enough reason).

After attempts to decline my request, and a complaint to the Ombudsman, I finally received the information this month.

Unfortunately some key submissions have been withheld, specifically submissions from three political parties. The Ministry of Justice’s general manager of civil and constitutional policy, Kathy Brightwell, informed me that “The political parties which the ministry received submissions from, provided these on a confidential basis. These parties may not have provided submissions if they knew they were going to be identified, so it would be within the public interest to withhold their submissions, as release of this would likely prejudice the supply of similar information”.

Journalist Andrea Vance has also been declined the public submissions, and yesterday she reported that “The Ministry of Justice struck a deal with political parties to keep secret their submissions on donation law reform.” She also reports the reaction of National’s Justice spokesperson Paul Goldsmith, who said it was “deeply shocking and ironic” that transparency reforms were being blighted by officials keeping submissions secret.

It is unclear which three political parties have asked the Ministry of Justice to keep their submissions secret. National has already publicly released their submission. And according to Andrea Vance, the Greens and Act are happy to publicly release their submissions. She also says that Labour didn’t provide a formal written submission – instead the party’s general secretary gave an oral representation to the Ministry, and it appears the records of that meeting are being withheld.

Until political parties’ consultations and submissions are released, it will continue to raise questions about the Government’s commitment to improve political transparency.

What the public submissions say

The Ministry of Justice received 276 submissions from the public about the Government’s proposed changes to political donation rules. It’s very clear that most submitters felt reform is urgently needed and the proposed reforms do not go far enough.

Below are some of the key themes of the submissions:

1) Almost unanimous support for lowering the threshold for disclosure. Currently, only donations over $15,000 have to be publicly declared. While there is strong support for the proposal to lower this to $1500, many advocate for an even lower threshold, with a significant number arguing for the limit to be $100 or $200.

2) The majority of submissions support an absolute cap on how much an individual can donate to a political party each year. Many suggest that the $1500 disclosure limit proposed by the Government should actually be the cap. Greenpeace recommended a $10,000 per year cap (The Green Party has introduced legislation to cap donations at $30,000).

3) Many submitters explicitly mentioned concern over corporate donations. A significant number advocated that only individuals should be able to donate – i.e. businesses, trusts, unions shouldn’t be allowed to donate to political parties.

4) There was strong support for increasing frequency of reporting. The submissions agree that the current annual reporting of donations is insufficient, with quarterly or monthly reports recommended, especially during election years and campaign periods.

5) Opposition to the Government’s proposal to remove the ten day disclosure requirement for donations greater than $30,000 was almost unanimous, with most viewing that such a significant sum should be required to be immediately disclosed, even if frequency for smaller donations is increased.

6) There was very strong support for more detailed public disclosures of non-cash donations. A number mentioned the use of fundraising auctions, particularly by the Labour Party, as needing much tighter scrutiny and regulation.

7) Most submissions called for the public disclosure of many more donations, even those under $1500 (which the Government is proposing should be exempt from disclosure). There is strong support for the publishing of the volume and total of donations that political parties receive, regardless of the threshold level.

8) There is very clear support for increased transparency and audits of party finances.

9) Submitters support requiring political candidates to disclose loans, with some calling for a complete ban on loans, a practice at the centre of the current trial related to the NZ First Foundation.

10) In terms of anonymous donations, most submitters thought that there should be either a complete ban or they should be much more restricted – typically a $100-$200 limit per year.  There was some concern about the administrative burden of collecting information for very small donations, but a number made the point that modern technology and finance tools have made tracking payments and donors much easier, and that many countries successfully operate much more detailed and frequent disclosure regimes.

There was some very limited opposition for a complete ban on anonymous donations, notably from the Law Society who argued that some anonymity for donations under $1500 is justified. However, the Chartered Accountants association supported a ban, noting how problematic anonymous funding can be, saying that “while political parties are not subject to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, there is a reasonable public expectation that political parties have an important role in deterring potential money laundering activities.”

11) A significant number of submissions recognised that greater restrictions and regulation of political donations would lead to a severe reduction in income for political parties, and that this might therefore increase the need for greater state funding of parties.

In general, the submissions are a mixed bag, with varying quality of analysis. That is the nature of public submissions. It can’t be assumed that the submitters are in any way an accurate representation of the public. Nonetheless, it was apparent that there were very few “cut and paste” submissions, which often occurs when some organisations ask their supporters to make submissions repeating a party line. Given that, the near unanimity of views that the proposals needed to go further was striking.

On the other hand, unfortunately, there were also very few submissions from civil society organisations – Chartered Accountants Australia & New Zealand, the National Māori Authority, Greenpeace, Transparency International New Zealand, the Gama Foundation and the New Zealand Values Alliance. This suggests a need for the Government to find ways to expand their public consultation on this crucial area of democracy.

If you want to see the file of public submissions, this is now available on my Democracy Project website – see: Ministry of Justice OIA release of information on political donations.

Dr Bryce Edwards is a politics lecturer at Victoria University and director of Critical Politics, a project focused on researching New Zealand politics and society. This article was first published HERE

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