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Dunne speaks: Electoral Financing Rules Not Working

A perennial undercurrent of recent general election campaigns has been the issue of party fundraising. With the emerging controversies this year over the shadowy role of the New Zealand First Foundation and the Serious Fraud Office’s decision to prosecute four individuals over the way in which a since returned donation to the National Party was accounted for, this year’s election campaign promises to be no different.

The Electoral Act contains a number of very specific provisions about how political parties and candidates are to account for the funds they raise, and the Electoral Commission has played a role in policing those. However, their specificity and the petty nature of many of the requirements has led parties and candidates over the years to explore various imaginative ways of getting around them or minimising their impact.

At the same time, parliamentary parties have similarly sought to maximise their electioneering opportunities from their Parliamentary funding to supplement whatever funds they raised externally. And they have become equally inventive and skilled in this regard. Over the latest summer, for example, Labour MPs ran billboards sporting large smiling photos of themselves promoting a banal and obvious message to drive safely over the holidays. This had nothing to do with road safety at all, but everything to do with promotion of the MPs concerned at the start of election year, and all within the rules at the taxpayers’ expense. National MPs have been no less diligent – the glossy electorate newsletters featuring a series of awkwardly staged photographs, and even more trite questionnaires “to find out what you think” are just as much about promoting the MPs they feature, as are the Labour billboards. The implicit notion that through these devices both Labour and National are “communicating” with those they seek to represent is as facile as it is fatuous.

In 2006, after the uproar over Labour’s taxpayer funded “Pledge Card” at the 2005 election the then Auditor-General conducted an investigation into expenditure of public funds by Parliamentary parties and concluded that most parties were spending their public funding improperly. That was ultimately self-defeating. While it led to a further arbitrary tightening of the rules, it also set off a new round of devices being employed by MPs to get around them.

Now I am not arguing against the corny billboards or the trite newsletters, per se – MPs must be able to promote themselves, their activities and their views to their constituents to enable a fair assessment of their worth come election time. But I am saying that the current plethora of Parliamentary and electoral rules are a nonsense that do more to encourage developments like the creation of institutions like the New Zealand First Foundation, or the breaking up of donations into smaller amounts to stay below a legislative threshold, than they do to eliminate them. While the rules may be a bureaucrat’s dream, giving more power than could ever be considered reasonable to petty non-elected officials like those who populate the Electoral Commission, they simply do not work, as current events show.

There is an obvious and simple solution to this that politicians who love preaching personal responsibility for others should be prepared to adopt for themselves. Scrap all the rules regarding the use of their allocated Parliamentary funding by individual MPs and their parties and replace them with a simple requirement for every MP and their party to file an annual audited return of their specific Parliamentary expenditure. The public would quickly prove to be far better monitors of what was reasonable use of public funds by politicians than any set of confusing, ambiguous and often contradictory Parliamentary rules could ever be.

At the same time, all the financing provisions of the Electoral Act could be abolished and replaced with one simple overarching provision: every donation made to a candidate or a political party, whether in kind or cash, from overseas or within New Zealand, whether it be $1 or $1,000,000, should be fully disclosable. This would place the onus fairly and squarely on the party or candidate to be absolutely transparent about whom and where they were receiving contributions from, while at the same time protecting their freedom of choice and association.

The chances of this happening are close to zero, as no party, however much it might like to lecture others on the subject, would ever submit to that level of transparency. Nor could the electoral officials and associated academic and legal fusspots who love nit-picking over these issues even tolerate the notion that people other than them could ever be trusted to be accountable in this way. Their whole careers have been built after all on their smug self-belief they know what is best for others.

So, the more the rules are tightened and tinkered with, the more bureaucratic checks that are imposed, the one certainty is the more politicians and political parties will simply engage in even more elaborate ways of getting around them. And the more we should come to expect election years being clouded by the types of funding controversies we are seeing already this year.


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