Monday, November 03, 2008



Election funding: a failure of transparency

One of the purposes of the Electoral Finance Act was to shed some light on political party finances and let us know who was funding (and therefore buying influence over) our political parties. The old practice of funding elections largely through "anonymous" (nudge nudge wink wink) and laundered donations would end; instead, the public would know who was paying whom, and in the case of large donations, know it early enough to factor it into their voting decisions.

Unfortunately, it doesn't seem to have worked out that way. While a final analysis will have to wait until the post-election returns of election expenses, it is certainly fair to say that the large parties are spending millions on their election campaigns. But there has been no declaration of donations to match. The only parties which have been honest about their large donors have been ACT and the Greens. As for the others, we've had nothing.

In 2005, National received $1.88 million in large donations, almost all of them laundered. If the EFA had applied then, every single one of those donations would also have had to be declared under the progressive disclosure rules. But this year, National has declared only two large donations, totalling a mere $60,000: one from the Road Transport Forum, and one from John Key. Labour, which in 2005 received $933,000 in donations ($584,000 of which would have had to be declared), has declared nothing. Which raises the obvious question: where is their money coming from? It's not from large donors, and its not through the Electoral Commission's official laundering scheme. So how are they paying for it? Cake stalls? The "grassroots"? Please don't make me laugh. The parties have relied heavily upon large donors in the past, and they will be relying on them now. The question is how they are getting around the law. Will we see a lot of $19,999 $20,000 donations on their annual disclosures? Or will we see a flood of large donations safely after the election, in a blatant attempt to withhold this information from the public until it is too late? Either way, it is clear there is no commitment to disclosure. Which means we will need a tougher law to force it on them.

Correction: The progressive declaration threshold is "above $20,000".