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Time to consider full state funding of political parties?

Time to consider full state funding of political parties?

by Grant Duncan
June 23, 2014

Mr Donghua Liu's claims of making large donations to the Labour Party are (as I write this) under dispute by party officials who say they can find no record of them. But there is no doubt about a $22,000 donation to the National Party in 2012. Either way, these donation scandals are embarrassing to both parties.

Under Labour, Mr Liu gained residency, and under National, citizenship. Both parties are now being interrogated over Mr Liu's donations. For embarrassing donations, though, you can't beat that made by Mr Louis Crimp to the ACT Party in 2011. That was a cool $125,520 — and then Mr Crimp was quoted by the NZ Herald saying things that can only be classified as racist. Mr Crimp apparently believed that ACT would stop special treatment for Māori, but, as far as I can tell, his investment has not paid off.

Any large donation could be interpreted as an attempt to 'buy influence' in some manner. And not many people can afford to make donations of the size that Mr Crimp or Mr Liu have made. Not many people get the direct access to politicians that Mr Liu is reported to have had.

Mr Liu has stated, however, that his donations were made "in good faith without any expectation." He suggests that he may have been singled out due to his being Chinese. The fact that his residency and citizenship were granted by ministerial discretion and "against official advice" may, of course, be purely incidental.

One response to all of this is: "so what?" The big donations are publicly disclosed, so we should leave things alone. Political parties also receive direct and indirect support through parliamentary services and electorate office funding, and contributions to electoral campaigns, and that's quite enough taxpayer money.

There are limits set on the amounts parties can spend on election advertising. So it could be argued that, in this country, you can't just 'buy' an election result (we, the people, decide), or 'buy' the policy decisions you want (no matter how much a donor gives, a government has to act within the law, including laws against corruption).

At present, we have a mix of private donor and public funding of the parties. But a shift to full state funding would, some argue, put an end to the unfairness by which some parties (like ACT) get large donations and others very little, tilting the playing field. State funding within a clear set of parameters would level that out.

Many skeptical New Zealanders would find the idea of paying more public money to political parties a hard one to swallow, I suspect. And others have argued that full state funding (and a ban on private donations) would mean that parties would become more disconnected from their constituencies. Fund-raising events are a lively part of the activities that keep politicians in touch with the people they represent, and they allow supporters to connect directly with their party leaders and MPs.

I would encourage more people to contribute small amounts regularly to the party of their choice (not necessarily as a full party member), and that would mean parties would have less reliance on the wealthy donors. Ten or twenty dollars a month are within the 'anonymous' bracket. It's better to have parties dependent on a large number of regular contributors than to go all out to schmooze a few rich donors.

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Associate Professor Grant Duncan is a senior lecturer in the politics programme at Massey University’s Albany campus.

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