Monday, May 29, 2006

Paying their bills

In recent days, National has come under attack for leaving TVNZ and other broadcasters to foot the bill for their "accidental" overspending during the 2005 election. Somehow, National "accidently" forgot to include GST in its broadcasting spending limit, meaning that they spent $125,000 more than they were entitled to. Then they claimed that they could not actually pay the money to the broadcasters, because doing so would breach the Broadcasting Act. The result is that TVNZ and other broadcasters have been left out of pocket, while National has benefitted from free, illegal election advertising.

Now National is proposing to do something about it. Don Brash has introduced a Member's Bill, the Broadcasting (2005 Election Broadcasting Reimbursement) Amendment Bill, which would make a one-off law change to allow National to pay its bills, via the intermediary of the Electoral Commission. The bill would not retroactively legalise the overspending (it is too late to prosecute anyway), but would simply ensure that no-one was left out of pocket.

I'd far rather see Brash introduce a comprehensive bill to tighten spending restrictions, introduce greater transparency, extend time limits for prosecution and introduce strict liability for corporate entities for electoral offences - but that aside, this isn't a bad bill, and it will correct one of the injustices of the 2005 election spending debacle. Hopefully Brash will ask for leave to debate the bill the moment Parliament returns in June, and hopefully Parliament will give its consent and pass it quickly.


"I'd far rather see Brash introduce a comprehensive bill to tighten spending restrictions, introduce greater transparency, extend time limits for prosecution and introduce strict liability for corporate entities for electoral offences - but that aside, this isn't a bad bill"

I suspect you'll see National propose a member's bill to do some of the more general things before this Parliament ends, however I think this is an awesome idea (that should have been done before the Greens kicked up a fuss). It makes sense to have this injustice rectified in isolation (although spurred by behaviour during the election, election reform shouldn't be so directly linked to it).

I would amend this bit of the bill, however:

"payments to broadcasters for material mistakenly ordered by the New Zealand National Party"

Mistaken it may have been, but this is not something that should be in this bill.

Does anyone know if this is a private act?

The question remaining of course, is: "how long until Rodney (once he gets back to Parliament) proposes a bill requiring the Labour Party to pay their money back?".

Posted by Graeme Edgeler : 5/29/2006 02:47:00 PM

I realise that it would be illegal under the current rules for National to pay the broadcasters - but couldn't they agree to some kind of voluntary payment to something else?

For example, agree with the out-of-pocket broadcasters to give the equivalent money to an NGO or foundation supporting budding journalists, or something?

Posted by Anita : 5/29/2006 03:01:00 PM

I hope the legislation also calls for Labour to pay back their overspending as well

Posted by Anonymous : 5/29/2006 03:22:00 PM

Glancing at the '89 Act (if it still stands), I would have thoughthat the breach would be in arranging for the extra time or broadcasting it rather than in paying for it.

So they don't need this bill

Someone tell me why I'm wrong.

Posted by Lyndon : 5/29/2006 03:41:00 PM


It's only a breach of s70 if the broadcaster does it "for a fee or
any other consideration".

I assume that means that if the broadcasters get their money then _they_ will breach s70. Until they get a fee or other consideration they are not in breach.

Perhaps? Maybe?

Posted by Anita : 5/29/2006 04:23:00 PM

Lyndon - the '89 Act still stands, however, it has been amended - the site has a more up-to-date version.

The offence is an an offence against the section you list (s 80), being a breach of s 70:

"70.Prohibition on paid election programmes—
(1)Except as provided in [[subsections (2) and (2A)]] of this section, no broadcaster shall permit the broadcasting, within or outside an election period, of an election programme."

subs (2) provides:
"2) Nothing in subsection (1) of this section applies in respect of—
(b) An election programme broadcast for a political party or group of related political parties and paid for with money allocated to that political party...under section 74A of this Act."

But that does not also mean that paying the bill would not be illegal too. Section 74B of the Broadcasting Act sets out how broadcasters are paid:

(2) Every political party to which an amount of money is allocated under section 74A must ensure that the Electoral Commission receives, no later than 50 working days after the end of the month in which the election was held,—

(a) all accounts issued to the political party in respect of the expenditure by that political party of its allocation; and

(b) any information in relation to those accounts that the Electoral Commission requires.


(4) When the Electoral Commission is satisfied in relation to any account that the account or any part of the account should be paid, the Electoral Commission shall, out of money appropriated by Parliament, or deemed to have been appropriated by Parliament, for the purpose of enabling political parties to meet all or part of the costs of broadcasting election programmes during the election period, pay to the person who issued the account the amount approved by the Electoral Commission for payment."

The payment from the Electoral Commission has to be "out of money appropriated by Parliament" and there ain't enough.

Of course you also have the electoral act (which may apply to payment for illegal broadcast advertising - even if it was once permitted, it's unlawful now):
"(2) All election expenses incurred by or on behalf of a party that is registered under Part 4 must be paid within 40 working days after the day on which that declaration is made, and not otherwise.
(3) Every person who makes any payment in breach of any of the provisions of this section is guilty of an illegal practice.

Posted by Graeme Edgeler : 5/29/2006 04:38:00 PM

Yeah, I just worked that out.

They're not themselves allowed to pay for any ads at all, so they can't pay the difference.

Plus the undeclared spending thing - good point.

Brash's release and proposed bill is on your nearest Scoop:

Posted by Lyndon : 5/29/2006 05:24:00 PM

Isn't there a moral hazard issue here?

That is if National are let off scott free this time, what is to stop other parties doing the same again in the future.

Surely the Green's suggestion that the monies be deducted from the ammount that National can spend next term, would solve this problem?

Still, I'm no lawyer - so maybe I'm missing something.

Posted by Terence : 5/30/2006 12:06:00 PM

So, if National pays it's an illegal payment, otherwise it's illegal non-payment for services rendered.

TVNZ (and co.) should get on with it and sue them for non-payment. National will be convicted and pay a fine, and all is well. What's the problem?

Posted by tussock : 5/31/2006 04:42:00 PM

"TVNZ (and co.) should get on with it and sue them for non-payment. National will be convicted and pay a fine, and all is well. What's the problem?"

The problem is that it's not criminal to welch on a contract. It's a civil matter, successfully suing someone for non-payment on a contractual obligation results in an order to pay up. However, because ordering someone to pay up would be ordering someone to do something illegal no court would so order (and any decision of a court that did would be overturned on appeal).

Problem 2 would be that the contract is unenforcable. The contract TVNZ et. al. would seek to enforce would be a contract that required them to break the law (as indeed they did). Under the Illegal Contracts Act unlawful contracts are deemed to have no force law - they're not worth the paper they're written on.

This would also deal with the situation where a statutory demand was made of the National Party - as a precursor to insolvency proceedings (which would have been hilarious).

Posted by Graeme Edgeler : 5/31/2006 06:51:00 PM