Election funding: the details

Today's Herald reveals the details of Labour's election finance reform package. While public funding has been vetoed by Winston, it seems the government plans to move on with a package aimed primarily at third-party campaigning, while making some token moves towards greater transparency. On transparency, they would lower the disclosure thresholds for donations to $5000 for parties and $500 for electorate candidates; bar donations from foreign sources while allowing them from expat New Zealanders; and include sweetheart deals and loans in the definition of donations, removing one way in which candidates can work around spending limits. As for third parties, they would require groups intending to spend more than a token amount to register with the Electoral Commission; set a spending cap of $60,000 nationally and $2,000 in any one electorate; include negative advertising in the spending cap; and count third-party spending against that of political parties.

The transparency moves clearly do not go far enough. The ban on foreign donations is good, and fairly standard in democratic countries, but the disclosure regime is weak and smacks of self-interested politicians writing their own rules. The high declaration threshold and failure to ban laundering will allow the rich to continue to buy influence and power to the detriment of our democracy. And it makes a mockery of Helen Clark's tough talk last year that she

understand[s] that in Australia everything over $250 has to be declared. That sounds like a good idea to me.

The third-party rules are interesting, and certainly a good place to start the discussion. The overall spending cap is similar to that set by the Citizens Initiated Referenda Act 1993, while the registration regime does not seem onerous and ensures that third parties can be held accountable for breaches (remember, political parties are also required to register, and ensuring that their advertising can be controlled is one of the reasons why). I'm wary of automatically counting third-party expenditure against a party's spending cap - it presupposes that all third parties are proxies, which is not necessarily true; OTOH where third parties are colluding and acting as proxies it seems justified (and this is already reflected in current law, at least for positive advertising).

The real contribution here is the exemption for third parties' communication with their members. While National is already trying to spin this as "designed to accommodate the unions and stop everybody else", it is perfectly justified. Grey Power, the Sensible Sentencing Trust, unions and the Business Round Table all have political interests and opinions on behalf of their members, and it is vital to ensure those opinions can be communicated to members at election time (the PSA ads comparing various parties' employment policies were IMHO a good example of this). The problem for the right is that they represent a wealthy, narrow elite - the BRT has only 53 members - and so such advertising won't do them any good. And if parties "circumvent" such rules by establishing mass-membership political organisations to push a particular line (such as MoveOn.org in the US), then all power to them - that encourages political participation, which in a democracy can only be a Good Thing.