Labour’s public funding proposals

We’re beginning to get a reasonable picture of the electoral reform proposals for which the Government is trying to stitch together a majority – over recent days the Herald has been running substantial stories detailing various aspects of Labour’s plans.

Here.

Here.

And here.

Whilst the devil is in the detail, and there is some good, there seems a lot that needs a lot of work.

And the Coalition for Open Government is here to help. Though I could write thousands of words covering the breadth of the Government’s leaks, few would read it, so I’ll temper myself (for the moment) to looking at the presumptive proposals around public funding.

COG recognises that there is already public funding of New Zealand elections – there’s over $3m in the broadcasting allocation every election, and there’s a few million each year from Parliamentary leaders’ funds (some of which is used to pay for office staff and supplies, but some of which has been used over the years to pay for advertising by just about every party in Parliament, and some of which has been spent on campaign strategists). And while we’d like it all to be a little more transparent, we’re pretty open to the idea that some of our taxes are spent helping political parties in ways like this. We’ve not yet set upon the exact formula through which we’d like to see the existing funding doled out to parties, but we’re open to the idea that it’s reasonable that they get some, and if a good argument can be made for increasing it, we’ll look at that too.

But even with this receptiveness, I’m not a big fan of what I’ve been hearing in the media.

An increase to public funding could only ever be justifiable to the extent that changes in donation and disclosure rules impact on the ability of political parties to campaign. A few examples to make the thinking clear (starting with one over-the-top):

• if we felt the only way to remove the potential for corruption from our election finance system was to completely ban donations to political parties, that argument would lead to the conclusion that political parties should be completely public funded;

• if we ban corporate donations, and limit private donations to New Zealanders at a maximum of $500 each, then, whilst *full* public funding would be unnecessary, you’d probably need a fair amount of taxpayer support to enable political parties to get their policies out there during elections;

• if we instead merely lower the disclosure limit for donations from $10,000 to $5,000 (as the Government is proposing) then whilst donations might fall, parties would still be able to get most of their funds from the public even if a few big donors were scared off (and overseas experience suggests most won’t be).

There are problems with any form of public funding (disengagement from voters, entrenchment of current political parties, etc. – we’ll hopefully address some of these when we discuss our thoughts on the fair distribution of existing public funding in a future post), but some extra public funding might be defensible if the Government can establish that a new donation and disclosure regime would impact on the parties’ ability to campaign, and the public’s right to be informed before they vote.

Labour’s leaked proposal is pretty simple – each year political parties would get $2 for each vote up to 20% at the previous election and $1 for each vote between 20% and 30% (based on the 2005 election, National and Labour would each get $1.14m a year).

And that’s the problem. Some increase might be defensible, but that’s a big number. Without a corresponding payoff in terms of a better donation and disclosure regime.

The current proposal is to retain the present broadcasting allocation (so National and Labour will likely get $1m each from that in future elections), and on top of that, they’d also get $3.42m to help fund their campaign ($1.14m a year for three years).

And that’s a campaign that, under the new proposals, will see Labour limited to spending $2.4m on election expenses and National $2.26m in the entire year of the election (not just the three months before the election as at the moment). Not only will they probably need no donations, Labour and National may be able to make a profit!

A good case can be made for some public funding if the disclosure and donation rules are tightened up. And a better case can be made if use of Parliamentary leaders’ funds on electioneering advertising and electioneering staff is banned as well.

Public funding and private funding of electioneering both have advantages and disadvantages. We’re prepared to support any good ideas – from any party or any source – and we’ll look seriously at the Government’s proposals – if it proposes effective principled changes to our campaign finance laws it might find us a strong ally. We await the detail, but at the moment the Government’s plans look like saddling us with the detriments public funding would bring without gaining any of its advantages.

Graeme Edgeler

Coalition for Open Government