“I’m slightly far right, as a business owner… of course I won’t donate if the policy is not more pro-business.”
“John Key lives nearby but we only talk in generalities. Helen Clark came to my house a couple of times. David Seymour has popped in a couple of times and had a chat about life.”
“You get more opportunity to have a direct meeting [with politicians].”
The above are all quotes from interviews with major political donors, carried out by myself and Professor Lisa Marriott as part of our research into the funding of political parties. This research has culminated in the recent publication of our report Money for Something, which sets out our concerns about the often murky world of donations to political parties – and details how it could be cleaned up.
As the above quotes indicate, political donors – when speaking freely off the record – are open about their desire to advance an agenda, rather than being naïve “supporters of democracy”, as fundraisers sometimes claim. They also enjoy extraordinary levels of access, rubbing shoulders with prime ministers and party leaders and finding that the door is opened wider when they want to meet politicians.
This is hardly surprising, as both major political parties have openly sold, or still sell, access to politicians through fundraising schemes like the Cabinet Club and the President’s Club. Fundraisers we interviewed described a system that was “an accident waiting to happen”, as would-be donors increasingly expected favours in return and the Electoral Commission lacked the powers it needed to detect wrongdoing.
Major donations-related court cases this year, involving New Zealand First, National and Labour, produced clear evidence of donation-splitting, in which donors break up their contribution into smaller tranches for others to “give” in their name, thus concealing their identity. And we know from past reporting that ministers have sometimes intervened to support donors’ citizenship applications against officials’ advice, and interfered in police investigations on donors’ behalf.
The backdrop to all this is a decline in “people power” within political parties – owing to the decline in party memberships – and a rise in “money power”, as wealth inequality has increased the number of people able to give large sums just as parties have become more reliant on them.
Our research also found that New Zealand’s regulation of political donations is among the weakest in the developed world. Half of OECD nations require donors to disclose their identities if they give over NZ$5,000, whereas our threshold is currently $15,000. Two-thirds of developed countries place a limit on donation amounts, while we have no such limit.
Based on all the above, we have set out in Money for Something five key recommendations that we think would lead to a much cleaner and more transparent system. In this system, political parties would be encouraged to fund themselves through a large number of small donations from ordinary people, rather than a small number of large donations from the wealthy.
Our recommendations are as follows:
- Donors’ identities disclosed when they give over $1,500;
- An annual cap on donations at $15,000;
- Donations allowed only from eligible voters, not organisations;
- Stronger powers for the Electoral Commission to pursue donations fraud; and
- A system of state subsidies for small donations, democracy vouchers to allow voters to allocate state-provided campaign funds, and lump-sum payments to all parties.
Our full report can be found here, and has been given visual form in this excellent Spinoff illustration. It has also attracted significant media coverage, and we hope it will continue to be a resource for future generations of reformers.