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Is New Zealand becoming a plutocracy?

Maria Armoudian and Timothy Kuhner

Guest Authors

Maria Armoudian, , Senior Lecturer, University of Auckland
Timothy Kuhner, Associate Professor, Faculty of Law, University of Auckland

Worrisome US tendencies

We’ve seen it in the United States — weak campaign finance laws have undermined democracy, transforming the country into a political regime that serves the wealthy above and beyond the rest of its citizens. Poorly regulated campaign contributions, outside expenditures, and lobbyists influence elections and buy access to those who are elected.

Research has shown that the great majority of funds available to campaigns, parties, and interest groups are provided by a tiny sliver of the population. Approximately 0.5% of the adult population controls the market for campaign funds. About 0.0001% of the adult population controls superPAC (Political Action Committee) spending. The great majority of lobbying activity favours big business interests.

This oligarchy denigrates and corrupts democracy by its insidious influence, degrading core values — such as political equality, citizen participation and trust, government representation, responsiveness and integrity. The resulting laws and policies — as political scientists Martin Gilens and Benjamin Page have shown — serve the rich, often to the detriment of the rest of the country, creating a downward spiral toward plutocracy and climate crisis.

While the US has historically overcome two previous plutocratic tendencies that plagued the country during slavery and the industrial era, it is now in the grip of a third. But instead of passing laws to address economic and political inequalities, the nation fell for the populist deception of President Donald Trump, whose policies are now exacerbating the corruption he promised to remedy.

A different path for New Zealand

New Zealand must not be allowed to follow the American lead down the path of greater inequality and plutocratic governance.

This small and distinguished country has a long history of standing up for democratic participation, an egalitarian ethos, and fair play.

  • But in New Zealand we face some of the same threats that are unravelling the United States’ democratic representation
  • The lobbying industry is almost entirely unregulated as Bryce Edwards has found
  • The political fundraising of National, Labour, and NZ First is unacceptably opaque, as Stuff has reported
  • Large political donations by corporations and trusts are allowed
  • And the threat to sovereignty and accountability posed by foreign donations isn’t taken seriously, as it is in Australia and the United States.

Researchers who wish to document the fundraising base and economic backers of the major parties, can’t even get a foothold because of the incredibly weak disclosure rules. Under such conditions, it’s all too predictable that this country’s reputation as one of the least corrupt in the world is poised to decline. More important than our reputation for high quality civil service and integrity, we risk losing the actual reality of good government.

Citizen confidence, freedom, equality, and self-governance for all, are now in doubt — right when the climate crisis and the technological crisis (fake news, deep fakes, and online hate) are striking.

Which way will New Zealand go?

Is New Zealand on its way to a privatised democracy and a public policy environment systematically opposed to the interests of every-day citizens and residents?

With such colossal vulnerabilities to undue influence and government capture, it is no wonder that economic inequality has grown substantially in recent decades and voter participation has decreased.

Citizens would do well to wonder whether a political system with such vulnerability to monied interests will be independent and public-spirited enough to address the housing crisis,  protect the right to access to clean, potable water, or respond adequately to climate change. As time passes, there’s no guarantee that citizens will retain their faith in government or keep bothering to participate in elections and public debate.     

Options for New Zealand

New Zealand has a number of options to correct its course.  Whether New Zealand takes a cue from more successful models or blazes a trail of its own, true democratic governance requires a few features:

  • At the most fundamental level, New Zealanders need access to greater transparency. With much more rigorous reporting requirements and publicly available political funding information, voters would have vital information they need to make decisions. Reports with detailed campaign contributions from $100 upwards and lobbying information, can be placed real-time, when received, into a user-friendly searchable website at the Electoral Commission
  • Secondly, an outright ban on foreign contributions to candidates and parties prevents improper influence from interest groups outside our borders or skewing our policies to favour another country 
  • Third, hard limits on contributions, to candidates and parties or other politically active groups, help level the playing field as do outright bans on contributions from organisations such as corporations
  • Fourth, ethics requirements for lobbying including prohibitions on gifts and limitations on revolving doors help prevent access inequalities and more fair representation within our own borders.

Current progress

Important reforms have already been introduced. For example, an earlier attempt to strengthen lobbying transparency failed after its first reading, but could be redesigned and resubmitted if citizens demand it. The Electoral (Strengthening Democracy) Amendment Bill is still active, aiming to improve voting rights, limit the influence of big money, and strengthen disclosure requirements.

These critical measures to protect the public interest deserve New Zealanders’ full attention. We are wary of the potential for good government to be compromised by complacency.

Make no mistake about it: despite New Zealand’s reputation for low corruption and high quality civil service, the country is surprisingly vulnerable to capture by monied interests.

 

Maria Armoudian is a senior lecturer at the University of Auckland, the author of two books –Reporting from the Danger Zone, Frontline Journalists, Their Jobs and an Increasingly Perilous Future and Kill the Messenger: The Media’s Role in the Fate of the World – and the founding director of the Project for Public Interest Media.

Timothy Kuhner is an associate professor in the Faculty of Law at the University of Auckland. His teaching and research focus on comparative constitutional law, corruption, political finance, and law and society. He is the author of numerous articles and several books including Capitalism v. Democracy: Money in Politics and the Free Market Constitution (Stanford University Press, 2014). 

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