Thursday, October 6, 2022

Peter Dunne: Political parties required to disclose all donations immediately

There will be relief in certain political circles at the acquittal of former MP, Jami-Lee Ross of corruption in the political donations case. Not because of any affection or regard for Ross, but more because the stench of corruption in our political system has been removed, at least for the time being.

However, the convictions of the three businessmen co-charged with Ross shows that the murky issue of donations to political parties is as controversial as ever. The rules regarding donations by businesses and wealthy donors to political parties are clearly in urgent need of tidying up to make them transparent, fair and fit for purpose.

Some have suggested that the best solution would be to outlaw such donations altogether. They point to successful recent campaign by the likes of Barack Obama, funded mainly on small donations – as low as $5 or $10 in some cases – and argue there is no reason why a similar approach could not work in New Zealand. However, New Zealand does not have the population base of the United States, meaning it would be very difficult for such a mass groundswell approach to work here.

In any case, in an open society like ours, people and businesses ought to be able to donate freely to the political parties they support, within specified limits and provided all donations are properly recorded and publicly disclosed. The current system of donations having to be lodged with the Electoral Commission which then passes them on to the party concerned is a bureaucratic piece of busy-bodying nonsense which ought to be done away with. It achieves nothing in practice other than making the donations process cumbersome and slow.

The onus should be on the political parties to declare – within say, seven days – what political donations they have received, their source and value. A similar requirement should be placed on donors to make them fully accountable for their donations and allow the public to make their judgements about political influence accordingly. There should be severe penalties for non-compliance by parties and donors.

A more simple and transparent approach like this would render the devices and schemes revealed during the recent trial forever redundant.

To some extent, the debate about the political donations regime is a smokescreen for something far more sinister. There has long been a view, especially on the left side of politics, that there should be no political donations allowable at all, and that political parties should be state funded.

Such a view is morally reprehensible. It is not the role of governments to fund political parties and the argument that it would be fairer and more transparent to do so is pure bollocks.

A state funding system would be anything but fair. The left favours it for no reason of principle – because there is credibly none – but more because it would stop wealthy donors being able to support parties on the right. Their arguments that this would lead to a fairer system are more about locking in their own advantage – without touching the financial and other support they receive from the unions – than fairness and transparency. And the bureaucracy required to run such a system would leave the Electoral Commission looking like babes in the woods.

Aside from the lack of principle in a state funding system, there is the vexed question of the basis on which funds would be allocated. The main view is that funds would be allocated according to a party’s vote share at the previous general election, but that is seriously flawed. For example, Labour received 50% of the vote at the 2020 general election. On that basis, it would receive 50% of the state funding. But Labour’s support has been dropping ever since – now below 30% according to one recent opinion poll, while National’s, the Greens’ ACT’s and Te Pati Māori’s support levels are, according to the polls, all much higher than in 2020. To allocate funding based on previous election performance, when so much has changed in the interim, would be lazy and wrong.

Moreover, such a system would entrench the position of the parties already in Parliament. New parties or small parties on the up would be unable to get a look-in under such a system. That may well suit the convenience of the established parties, but it is hardly fair or reasonable, nor in the interests of promoting a fully democratic society. And the thought of a team of unelected bureaucrats administering such a system and determining the fate of political parties this way is simply repugnant.

The recent corruption trial and convictions have been a rude awakening about the failings of the current system of political donations. It requires an urgent, sensible, and fair response. More bureaucracy and restrictions, or the state taking over the whole system are not the answers.

Political donors large and small need to be made fully accountable for their donations, and the political parties required to disclose immediately, the size, source and form of all donations received in cash or kind. A sunlight approach along these lines will let voters know precisely what is going on and enable them to reach fully informed decisions about those behind the parties seeking their vote.   

Peter Dunne, a retired Member of Parliament and Cabinet Minister, who represented Labour and United Future for over 30 years, blogs here:

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