On How Political Donations Favour The Centre-right

Political donations are not gifts. They’re an investment. Lest the recipients forget the gesture, one of the purposes of political lobbying is to remind everyone in the room that they have mutual interests in common. In short, political donations are made on the understanding that the recipients will endorse policies and support laws and regulations that fall within the donors comfort range, and from which they may even benefit, materially speaking.

Tax cuts for example, shower their main benefits on the small class of wealthy New Zealanders who happen to have had a spare $20,000, $50,000 or $100,000 on hand to contribute – either to help make the tax breaks happen and/or to prevent a wealth tax, or a meaningful corporate gains tax from ever being introduced. The captains of industry also tend to open their wallets for any politicians who promise to cut the regulatory red tape that can so vexingly inhibit business as usual. Overall, the wealthy get the defenders that they pay for.

At another level again, donor tolerance also limits what political scientists call the “Overton window” - i.e. the ideas that comprise the spectrum of government policies deemed to be acceptable by the media, the pundits and ultimately, the general public. Clearly, the advent of Chris Hipkins as Labour leader has seen a further sharp contraction in Labour’s already limited willingness to embrace left wing policy options.

Following the Money

There is nothing illegal about the socio-economic transactions involved with major political donations, which need to be transparent. That said, being transparent has never landed any major donor in hot water (a) for being excessively generous to a political party, or for (b) being seen to derive material gains from the legislation championed by a grateful recipient.

Obviously, having lots of money confers an advantage in politics, as it does everywhere else. Election campaigns depend largely on the best resources (human and otherwise) that money can help to buy. A glance at the public record also shows that the pattern of political donations in this country does not create anything like a level playing field between the centre-left and the centre-right. Here for example, is the sum total of the political donations of $20,000 and above, made so far in 2023 to the following political parties :

ACT Party: $1,305,000

National Party: $680,803

Green Party: $496,250

Labour Party: $458,604

NZ First : $451,141

To repeat: these are only 2023’s major donations to date, of $20,000 or above. Going back further in this electoral cycle, here are the figures for the whole of 2022 from all political donations, both above and below the $15,000 level at which donors must be identified:

National Party: $5,116, 036

ACT Party: $$2,081,331

Labour Party: $419,364

Green Party: $413,360

NZFirst: $317,288

Counting all donations big and small for 2022, and adding in only the large donations of $20,000 or more made thus far in 2023… The centre-right bloc (ACT, National, NZF) has received a whopping $9.64 million in political donations over the past 18 months.

The corresponding figure for the centre-left bloc is about $1.81 million, after the negligible political donations made to Te Pāti Maori for the whole of 2022 ($36,623) are also added in. Even without counting the smaller donations for 2023, there’s a stark imbalance in the funds at the disposal of political parties, depending on where their ideological stance lies. On the measures cited above, donors gave the centre-left parties a little over 18% of the funds received by their opponents on the centre-right. If the medium really is the message, an 80% edge in the funds from donations inevitably buys the centre-right a whole lot more campaign bandwidth.

The rote response to such imbalances is that electoral success cannot be bought by money alone. The failure of Kim Dotcom’s Internet Party is commonly cited as “proof” that money alone is not the sole determinant of political success. (In reality, the Internet Party’s lack of success had several unique contributing causes.) In the normal scheme of things, a political party that has pots of money is – obviously – much better placed to package and promote its messages to the widest possible audience of voters. In 2023, when the centre right parties are touting extreme forms of centre right policies unseen here since the mid 1980s, that should be a concern.

Footnote One: The donation figures for National cited above are instructive in other ways as well. As corporate donors have gotten to know Christopher Luxon better, it seems that the pace and extent of the major political donations to National has slowed down from the initial heady surge of donations evident last year.

Footnote Two: The figures cited above for the Greens this year do not (yet) include the donations to the party made by their own MPs, who pay a tithe on their parliamentary salaries into the party coffers. Given that the Greens have two co-leaders who are Ministers outside Cabinet, one MP who is a select committee chair, one MP who is a deputy select committee chair and five other MPs who are on backbencher salaries, the overall annualised value of a 10% tithe on the salaries paid to members of the Greens parliamentary caucus would be worth roughly $170,000.

Meaning: when this is added to the healthy level of political donations to the Green Party cited above – these include a $50,000 donation this year from film director James Cameron and his wife Suzy Amis Cameron – then the Greens look to be remarkably flush with funds. That being so, the Greens identity of it being a list party only – despite the victory of Chloe Swarbrick in Auckland Central – seems overdue for an overhaul. The days of the Greens running for the list vote while its Labour partner piles up the electorate victories has passed its use-by date.

Currently, the Wellington electorate seats – Wellington Central, Rongotai, Ohariu - are the main battlegrounds where the Greens are putting their funds to use, and are mounting a serious challenge to Labour. The penny has also dropped that running hard locally will almost certainly lift the list vote, nationally. Julie Anne Genter’s candidacy and the team she has assembled in Rongotai are a clear example that the Greens are willing to use their campaign war chest outside Auckland, and to campaign strongly within hitherto safe Labour seats:

...Following the success of Chlöe Swarbrick in Auckland Central, the Greens are ramping up campaign efforts in some Wellington electorates...... [Julie Anne] Genter has made it clear she wants to win the seat and her bid is not just about bolstering the party vote...... Genter has promised a ground campaign at a scale the party hasn’t run in the electorate before.....She said the amount of money raised and the number of volunteers willing to help had already exceeded expectations.

During the 2020 election, the two electorates in the country where the Greens won their highest number of party votes were Wellington Central (14,587) and Rongotai (10,765). In declining order, those seats were followed by Mt Albert (8,311) Dunedin (8,165) Banks Peninsula (7.089)Auckland Central (6,937) Ohariu (5,940) Christchurch Central(5,168)New Lynn (4,794)and Epsom (4.596).

But here’s the thing. Judging by their Electoral Commission expenses returns, the Greens spent next to nothing in 2020 on many of their electorate campaigns, including in some of the seats where they fared very well on the list vote. With a couple of notable exceptions, they simply relied on the power of the national brand. In Rongotai for instance, the Greens took in $4,600 in donations and yet spent only $57.74 on their campaign in that seat.

In Jacinda Ardern’s seat of Mt Albert, the Greens – perhaps in an excess of deference to the ultra-popular PM - spent a total of $12.31 on their campaign. In the Wigram seat held by Labour’s Megan Woods, the Greens candidate filed nothing at all. In the Banks Peninsula seat contested by Eugenie Sage, the Greens spent $449.68. In the Dunedin seat, the Greens took in $4, 068 in donations, but spent only $112.89 on their campaign. Etc etc.

Now… It might be said that the Greens still did pretty well in some of those seats, without spending any serious money. Fine. But if the Greens did that well on the party vote without trying very hard to run a grassroots campaign ...doesn’t this suggest that there is fertile ground pot there, and that significant further gains might be made on the party vote if the Greens decided to fly their flag more strongly in the electorate races?

Genter’s efforts in Rongotai and Tamatha Paul’s efforts in Wellington Central will be watched very closely for evidence of whether stronger electorate campaigns by the Greens do indeed spill over into gains on the party vote as well. Chloe Swarbrick’s victory in Auckland Central has to be an encouraging sign of what might be achieved.

In winning the Auckland Central seat in 2020, Swarbrick not only boosted the Greens electorate vote by 25%; she also increased the Greens party vote in that electorate by 5.19%. With Labour running in fear of its own core values, the Greens have every good reason to campaign hard on environmental, social justice,

and tax

issues as the genuine, positive home for the centre-left vote.

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