The National Party has strongly objected to plans to overhaul New Zealand’s political donations regime, warning of a “chilling effect” on democracy.
The Government has proposed sweeping changes to electoral law. The changes would include lowering the threshold for political parties to disclose donors from $15,000 to $1500, and requiring political parties to make public their annual financial statements.
National, Labour and New Zealand First are currently embroiled in court cases centred on donations – and critics have long argued the law must be tightened to prevent abuses.
The Justice Ministry sought feedback on political fundraising ahead of a review by an independent panel of experts and academics. The National Party has released its submission on the changes. The Labour Party “politely declined” to do so.
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Ricky Wilson/Stuff
Former National Party MP Jami-Lee Ross is facing Serious Fraud Office charges relating to donations made to the party.
Under consideration is a plan to drop the public disclosure threshold for donations to parties from $15,000 to just $1500. This would bring it into line with the limit for candidates.
Critics of the existing regime argue the gap allows donors to put money through to a party without disclosure, with the money then being passed to a candidate.
But National says officials have underestimated “the aversion of donors to being publicly identified”.
The party says only a “small fraction” of donors who currently give between $1,500 and $15,000 would still be prepared to do so if their privacy were not protected. The submission points to recent electoral returns, which showed only 14 donors giving amounts of more than $15,000 to the National Party in 2020, and 25 to the Labour Party.
“The chilling effect … will have a significant impact on parties’ ability to support candidates, meet regulatory requirements, and run effective election campaigns, with no alternative funding mechanism proposed or in-place to make up for this loss of income,” the party argues.
And it would take “step forward” towards the dependency of parties on state funding, National claims.
The submission also says the proposal would make it more attractive for donors to funnel money through registered third party organisations, which are less regulated.
National also “strongly opposes” a shift from annual to quarterly reporting of donations. It claims the current regime takes roughly three months, including significant work from 65 volunteers and external auditors with a 30,000+ line donation record.
“Replicating this process four times over the course of a year would place a significant regulatory and administrative burden on all parties.” The party would need to hire an extra full-time staffer to do the work and increase audit costs. It says six-monthly reporting is “more palatable”.
The party does support removing the requirement to large donations (exceeding $30,000) to the Electoral Commission within 10 days.
It does not object to suggested new requirements to disclose non-cash gifts, but would like more clarity on the rules around events, e.g. raffles or movie nights.
And it doesn’t oppose a plan to ban anonymous, small donations – where the donor is not disclosed to the party or the public.
David White/Stuff
Jacinda Ardern and Christopher Luxon. Their parties are both responding to proposed changes to political donation rules.
The submission was made by the party’s former National Secretary Greg Hamilton, who left the post late last year.
Hamilton said because the organisation was “volunteer-run”, any potential changes to an already complex regime were of concern. The existing system of rules did not need “significant change”, he said.
The ongoing court cases showed the settings were “in fact working, being enforced effectively by regulating bodies”.
National was also worried new rules would take effect in 2023, an election year. The proposed changes would have a “significant effect” on parties’ ability to fundraise, he said.
He also questioned cross-party support for the changes, which would risk the longevity and legitimacy of new rules.
Sungmi Kim/Stuff
National doesn’t want new donations rules to take effect in an election year.
On Sunday, Stuff revealed Labour charged wealthy business figures $1750 a head to schmooze with Prime Minister Jacinda Ardern at a Wellington conference.
And National is cosying up to high-rolling donors – asking at least $1000 per head – to dine with leader Christopher Luxon.
National received nearly $3 million in large donations in the last election year, 2020 – almost double Labour’s tally.
Ministry of Justice General Manager Civil and Constitutional Policy Kathy Brightwell said the independent review would be considering current settings for political financing, which included donations to parties and candidates.
The Ministry was hoping to proactively release a summary of submissions “shortly”, she said.
