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Select committee process improves legislation

Government says select committee process has improved legislation

The Government is welcoming changes to the Electoral Finance Bill recommended by the Justice and Electoral Select Committee, says Justice Minister Annette King.

"In particular, the Government agrees with the committee's recommendation to delete clause 5(1)(a)(iii) of the original Bill. This clause was the subject of widespread comment by submitters, who were concerned at the broad definition of election advertisement in the clause. The deletion of the clause will therefore allay the concerns of such submitters."

Ms King says the Government wants to re-emphasise why the Bill is necessary. "This Bill is about creating a fair, transparent electoral system that puts all parties on a level playing field with clearly defined rules and safeguards to protect the electoral system from abuse.

"This Bill does not restrict free speech. It simply restricts rights to 'purchase' speech through advertising. This is being done to safeguard our democracy by keeping to a minimum the undue influence of money in politics. That's what a level playing field means, and the Government believes most New Zealanders understand and support this principle," she said.

"I believe it is a strong affirmation of the strength of democracy in New Zealand that there has been such considerable public interest in this Bill. The Select Committee received written submissions from 575 individuals and organisations, and sat for extended hours to ensure that 101 oral submissions could be heard.

"The committee has listened to these submissions, and has recommended a number of changes to the Bill. The Government is listening too, and believes that the committee's recommendations will meet the concerns raised by a very large number of submitters," Ms King said.

"Parliament decided that the committee's membership should be expanded to include representation from all the parties in Parliament. Its recommendations therefore reflect the joint view of many parties."

Ms King said the committee also consulted with the Human Rights Commission on its recommendations, and the Government welcomed the Commission's thoughtful response, and its support for the Bill's policy objectives (letter from Chief Human Rights Commissioner to the Select Committee chair is attached as a PDF fine).

Ms King says that the committee, after considering the hundreds of submissions, has recommended strict new rules on political funding. "These are important and far-sighted changes, and the Government welcomes them. They will result in much greater transparency about the sources of political funding, which will ultimately lead to greater public confidence in democracy." Highlights of the recommended changes include: • A ban on anonymous political donations over $1000, made directly to the candidate, party or third party, has been proposed. This will prevent significant anonymous donations being made directly to political parties, candidates, or third parties.

• The committee has recommended that, where a person wishes to make an anonymous donation of greater than $1000 to a political party or third party, it must be routed through the Electoral Commission to ensure that the donation is truly anonymous. Donations made in this way will be subject to overall caps.

• A ban on political donations over $1000 from overseas persons has also been recommended, alongside stricter disclosure rules for donations from secret trusts.

Ms King said changes have also been proposed to the third party regime in the Bill. "Most importantly, the committee has recommended that the Bill should only regulate those that actually campaign to influence the outcome of a general election.

"Many submitters said that, if this one change was made, many of their concerns about the Bill would evaporate. The product now is legislation that promotes freedom of expression, by ensuring that a few wealthy individuals cannot use their money to buy an election and swamp the voice of ordinary New Zealanders," said Ms King.

"Alongside this, the committee has proposed that the total limit on third party expenditure should be doubled to $120,000. There is also a proposal to lift the threshold for listing as a third party to $12,000. This means that the Bill will not impose any additional burden for those who spend low to moderate amounts on campaigning.

"There are many other detailed changes designed to place a premium on the freedom of expression, and reduce compliance costs associated with the legislation. The committee has approached the detail of the Bill in a comprehensive way, and I thank them for that.

"Finally, the committee has said that the Bill should make it absolutely clear that government departments and other Crown bodies cannot engage in election advertising," she said.

"I would like to thank the committee for approaching this task in a multi-partisan way, and for sitting for long hours. The result is that its recommendations incorporate many of the points raised in submissions, and moreover have the support of a broad range of political parties.

"From this point, its recommendations will be debated fully in Parliament, and the Bill will be subject to further scrutiny."

See Also:

  • Human Rights Commission Letter

  • Questions and Answers

    What was the composition of the Justice and Electoral Committee? Parliament resolved that the membership of the committee should be increased to thirteen, with its composition the same as the Finance and Expenditure committee – four members from each of the Labour and National parties, and one member from each of the remaining parties represented in Parliament.

    What did the key submissions say? Four headline issues were raised across the submissions. The Committee has recommended changes to all these areas except the regulated period.

    • the definition of election advertisement • the regulated period • the third party regime • the donation regime

    The definition of "election advertisement" The Committee has recommended changes to narrow this definition, so that it only relates advertising that amount to campaigning that will influence the outcome of the election. This amendment will address the concern raised across a large number of submissions, and will ensure that the regulation imposed by the Bill is only directed at advertisements that seek to influence the outcome of an election.

    The expenditure limit for third parties The Committee has recommended that the third party expenditure limits, during a regulated period, are to be raised as follows:

    • to $4,000 for election advertisements that relate to a candidate • a total of $120,000 for national campaign advertising.

    The regulated period

    The committee has not recommended any change to the regulated period proposed in the Bill, which will run from 1 January where polling day falls after 31 March in the third year of the electoral term. Many of the concerns in submissions about the regulated period in the Bill were closely associated with the broad definition of election advertisement. The concerns about the regulated period are substantially addressed by the committee's recommendation to narrow the definition of election advertisement.

    The administration of the third party regime The Committee has recommended that the Electoral Commission, and not the Chief Electoral Office, should administer the third party provisions in the Electoral Finance Bill. The Committee considers that the listing of third parties would fit more closely with the existing roles of the Electoral Commission in relation to registering political parties.

    Eligibility to be a third party The Committee has made changes to the eligibility requirements for listing as a third party. These changes will meet concerns raised by submitters, such as the Human Rights Commission, so that individuals under the age of 18 years can be third parties, alongside groups with members under the age of 18 years.

    Third party listing The Committee has recommended a number of changes to the provisions relating to third parties, including increasing the threshold at which a promoter must list as a third party (raised from $5,000 to $12,000), and removing the requirement to submit a statutory declaration that they will not spend above the threshold. This addresses the concerns of a number of submitters about the compliance costs of the regime.

    Penalties for electoral offences The committee has recommended a substantial increase to the penalty for the most serious electoral offence --- a corrupt practice. The period of imprisonment is to be increased from 1 to 2 years. In addition, for party secretaries and financial agents, a corrupt practice will carry a maximum fine of $100,000, up from $4,000 in the Electoral Act. For all other persons, the maximum fine will be $40,000.

    The donations regime The Committee has proposed a new donations regime that is to apply to candidates, political parties, and third parties. Key features of the regime are:

    - there is to be a ban on the direct receipt of anonymous donations by candidates, political parties and third parties over $1,000 - there is a new regime for "protected disclosure" donations that will enable anonymous donations over $1,000 to be made to political parties or third parties via the Electoral Commission. Total caps will apply to this regime - from one general election to the next, a political party or third party cannot receive more than 10 percent of the total campaign expenditure allowable ($240,000 or $12,000 respectively). In addition, a political party or third party cannot receive more than 15 percent of the total allowable donations from a single donor ($36,000 and $1,800 respectively). - there is also to be a ban on receipt of donations from overseas persons over $1,000.

    Will the Bill be subject to further public consultation?

    The Bill has been subject to significant comment and scrutiny since it was introduced in July. The Justice and Electoral Committee received 575 written submissions on the Bill, and heard 101 oral submissions. All parliamentary parties were represented on the Committee.

    Additionally the Human Rights Commission, which expressed significant concern about the Bill as introduced, has provided additional assistance to the Committee. Its letter addressing the changes is attached in full to this document.

    The Commission says that it supports the policy objectives of the Bill. The Committee has resolved to provide for some further public consultation on the Bill, in accordance with a recommendation of the Human Rights Commission, by way of providing an executive summary of the report to submitters.


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