Monday, April 09, 2007

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 in the US), then all power to them - that encourages political participation, which in a democracy can only be a Good Thing.


The third party limits are an insult to free speech. I should have the right to go out and say what I want.

And including that third party spending in parties own limits is just ridiculous. Third party spending could potentially push a party over its own spending limit without it even knowing about it (or being able to stop it).

Posted by peteremcc : 4/09/2007 02:26:00 PM

God you people go crazy over the BRT. Never mind the fact that the BRT has never donated a dollar to any party or spent a dollar on advertising during a campaign. That isn't what they do.

I want to see the fine wording of how this exemption will work. Will it allow the AA to write to its 1.2 million members about each party's roading policies?

Posted by David Farrar : 4/09/2007 05:03:00 PM

DPF: The BRT may not donate as an institution, but its membership list has a very high correlation with the national party donor list revealed in The Hollow Men. They are trying to buy power - just as they did in the 80's and 90's.

And if the 3rd-party rules don't allow the AA to write to their members about roading policy, they will be fundamentally broken.

Posted by Idiot/Savant : 4/09/2007 05:25:00 PM

We need to get some perspective on the idea of "free" speech - and the associated question of how money may be used - at election time. To begin with, "democracy" simply does not mean that you can say whatever you want at election time (nor does it mean you can use your money however you want). For instance, you cannot say "vote for X and I will pay you $20". Nor may you use your money to hire goons to tell voters "vote for Y or have your legs broken". I take it that this is accepted common ground, and that we all agree that we should have laws to prevent such speech/spending on speech?

Well, why can't you say such things/use your money in this fashion? Surely rational voters can assess this speech and choose how to respond to it? You can take the money (or refuse it), and still vote how you want. You can listen to the threats and discount them as being uneforceable in the face of uncertainty about how each voter actually voted. Does not (1) the fact voters are rational; and (2) the fact the ballot is secret mean that laws prohibiting this kind of behaviour are otiose?

The reason for having such laws must instead lie in the desire to promote a particular kind of electoral environment. Simply put, we do not want to have election campaigns in which voters are subjected to such inducements/threats, even if they will not be particularly effective in swaying the outcome of the election. The value of participant freedom (the right to say "I'll pay you $20 to vote this way"/"I'll break your legs if you vote that way") is outweighed by other values - such as participant deliberation (the idea that voters ought to make their choices on grounds other than immediate individual enrichment or fear of potential harm), or participant equality (the idea that elections should not appear to be for sale to whoever has the most money to offer). Which indicates that participant freedom is not (and should not be) the only, or even primary, value we consider at election time.

Of course, large scale spending by "third parties" is markedly different to bribery/undue influence. Here, it is argued, the spender/speaker merely uses his or her wealth to put out ideas for the voter/listener to evaluate. If the ideas are no good, then the voter will not be moved. But if the ideas are good, then the voter will respond - which is a good thing in itself, because an informed vote is a better vote. This is, of course, classic "free speech market" reasoning.

But it rather begs the question of how even fully rational voters assess whether ideas are "good" or not. Surely this is a comparative exercise, in which we access information from multiple sources and evaluate its credibility and "truthiness"? Yet in a society where spreading information voters costs money (and despite the rise of the internet, etc, most voters remain passive recipients of election-related information), the ability to do so will be unequally distributed. As such, a free market in campaign speech cannot guarantee a fully informed electorate - all it can do is allow those who have money to get their message out, which is not the same thing at all.

Also note, this is a "best case" type analysis. In reality, many voters will not be as "rational" as we well-educated bloggers/political junkies wish. That is to say, their votes may be less the outcome of a concious evaluation of the detail of various sources of election information, and more a gut-level response to the limited range of material that happens to float through their mailbox/TV screens/newspaper pages. If so, the ability to get material before such voters through these avenues becomes very important in terms of influencing their voting choices. And again, this ability depends upon the possession of wealth - which is unevenly distributed.

These equality concerns then form a challenge to the value of participant freedom. Why should possession of money allow for a greater ability to spread pre-election propaganda? (Also note - if such spending does not at least have the potential to influence voting patterns, then why the angst about curtailing it? If the practical effect of a limit on 3rd party spending is that money is not wasted on communications that have no effect, then so what?) After all, we did away with multiple votes for property owners over 100 years ago. Is there not then some contradiction in considering possession of wealth an irrelevant factor at the ballot box, but continuing to treat it as a critically important one in the campaign leading up to polling day?

In the end, much depends upon what your ideal (or "vision") of elections is. Are they simply an arena for a partisan power grab, wherein individuals and parties (supported by external interests) fight to promote their sectional interests? Or are collective enterprises in which the citizenry comes together to formulate an ideal of the common good for the nation to pursue? Or are they some mix of the two, in which the promotion of individual interests and collective goods must cohabitate? Much of your attitude toward electoral reform will depend on this underlying ideal.

Posted by Anonymous : 4/10/2007 11:15:00 AM


I agree that a fully informed voter who takes the time to learn about the various parties they can choose between on election day would be best. Infact, I believe that a fully informed voter would be more likely to vote for my party - so no arguments there :D

I do find it interesting however, that everyone seems to consider money as the only influential asset someone may have.

Why do we not limit the number of celebrities who can publicly support each party? Celebrities hold much more influence than their 'fair share' as they are famous.

Someone who happens to be an excellent speaker also holds much more influence that the average person because of their abilities.

Money can influence people but so can many other things. Why do we only limit financial influences?

Posted by peteremcc : 4/10/2007 02:46:00 PM

Idiot/Savant wrote:
The real contribution here is the exemption for third parties' communication with their members.

Hum... Sorry, but once you get beyond the flat-out paranoia business lobbies and unions induce in some people, that's where the problem starts with me. I'm a huge supporter of the hospice movement - and you should be too - and health funding and related policy issues are a huge concern. But I'm not formally a 'member' of any palliative care provider, which doesn't mean I'm not passionately interested in the informed, considered and non-partisan views of those who work at the flaxroots.

To use an awful cliche, the devil is going to be in the details. But I'm far from encouraged that what we've seen so far appears to have cooked up behind closed doors and selectively leaked to friendly journalists.

Posted by Craig Ranapia : 4/11/2007 10:10:00 AM


I guess the thing with money is it is (1) potentially influential; (2) very unevenly distributed; (3) measurable. This final point makes it regulatable in a way that more diffuse (but, I accept, at least potentially influential and unevenly distributed) qualities such as celebrity are not. What would a rule to regulate celebrity involvement look like - "Only 3 celebrities may support any political party" ... define "celebrity". Define "support".

I guess this then raises the question - why regulate money (which we can do) when we can't realistically touch other potential avenues of influence. (Of course, it might be suggested that this question really is a bit irrelevant - do celebrity figures really play such a role in our present electoral process that we can legitimately equate their potential influence with that of those with money to fund electoral speech? But I guess from a principled point of view we should address it.)

Perhaps there are a couple of reasons to target money. First, it is translateable into a wide range of forms of influence - it is malleable in a way that celebrity is not. So, Tim Finn may write a song for a political party and tour around the country singing it at the party's rallies. This may gain the party lots of attention. But his celebrity can only be used in public (ie it's there for everyone to see - and to critique) and can do only one thing (attract public attention). Contrast a gift of equivalent monetary value (what is a Tim Finn song/tour worth - say $200,000?) to a political party. This money can be used for a wide variety of campaigning activities ... polling/consultants/advertising/etc. Simply put, campaign money may be worth more to a party's campaign than the dollar equivalent in celebrity involvement. (Probably why you don't see the parties hiring singers/actors to do nationwide tours at election time!)

Second, I think there are cultural factors at play here. Giving your time to participate in the electoral process is considered to be A Good Thing To Do - hence the exemption for voluntary labour from the definition of election expenses. Giving money to a party (even if that is used to hire people to do the work you could volunteer to do) simply is considered a lesser form of political involvement - it carries the taint of convenience/calculation rather than true commitment to a cause.

Now, this may be an irrational distinction (as I'm sure economists will tell us) ... but I'd suggest it again comes down to our ideals about democracy. Money is thought to be "different" 'cause it operates at one remove from the direct, vountary involvement in the process that we like and want to promote.

Anyway - some thoughts.


Posted by Anonymous : 4/11/2007 10:15:00 AM

If you're passionately interested in a particular group's views, then you can seek them out. We're only talking about restrictions on advertising here, there shouldn't be anything to stop groups publishing their views on their web site etc.

Posted by Commie Mutant Traitor : 4/11/2007 10:16:00 AM

We're only talking about restrictions on advertising here, there shouldn't be anything to stop groups publishing their views on their web site etc.

"We"? Spank my arse and call me a cynic, but I'll be very interested to read the legislation rather than the selective leakage, thanks. Because we've never had the law of unintended consequences come into play when someone has to apply *ahem* strategically ambiguous law, or seen a bill that doesn't quite match the press release spin -- which is how we got here in the first place, isn't it?

Posted by Craig Ranapia : 4/11/2007 11:16:00 AM

Craig - websites are generally very cheap - it is highly unlikely that a website will push anyone over a $60,000 limit (which I agree is kinda low).

Posted by Graeme Edgeler : 4/11/2007 11:25:00 AM


I take your point, but mine is that when you start talking about 'communicating with members' the devil is very much in the details. And when it comes to politicians and campaign finance reform, I think I've got every reason to be extremely sceptical about anyone who say "just trust me". Piss off, is my reply.

Anyhow, I do hope someone is going to have the bottle to move an amendment to whatever bill hits the order paper giving the Electoral Commission and/or the Chief Electoral Officer the power to prosecute breeches. Because if the Police have proved anything in the aftermath of the last election, it's that they know nothing about electoral law and care even less. I'd certainly LOVE to see who'd be willing to go on the record voting such an amendment down, and would be voting accordingly.

Posted by Craig Ranapia : 4/11/2007 11:38:00 AM

Yeah, the people that run the election should be the ones enforcing the rules. Does it sound too obvious stated that way?

As far as free speech, I don't see any restriction on free speech here. Pretty much by definition, the value of free speech is zero. What's being policed is your ability to pay for distribution of that speech, which is a related but not identical issue. I'm with those who think that limiting that ability is good - I dislike the US-style ele-auction where money is a major factor. Trying to move away from that by limiting spending and reducing anonymity is IMO very good.

Posted by Anonymous : 4/11/2007 03:14:00 PM

Yeah, the people that run the election should be the ones enforcing the rules. Does it sound too obvious stated that way?

Anon, if you seriously want to argue that the Police have really done democracy a favour by pretty much ignoring any complaint referred to them by the Electoral Commission and Chief Electoral Officer be my guest...

Then again, I guess Parliament voting to give our internationally-respected electoral agencies real powers would be like the proverbial turkeys voting for Thanksgiving.

Posted by Craig Ranapia : 4/12/2007 12:00:00 AM