David Farrar
The week in politics with centre-right blogger David Farrar

David Farrar: The Taxpayer Relief Regulated Period

With the election just 3 months away, spending limits apply to campaigning political parties and candidates. Photo / Doug Sherring
With the election just 3 months away, spending limits apply to campaigning political parties and candidates. Photo / Doug Sherring

We are now officially within three months of the general election. Today is the start of what the law calls the regulated period. It restricts how much money political parties can spend of their own money on election advertising, but more popularly cuts off taxpayer funded election advertisements from MPs.

Two spending limits apply to political parties and candidates, as from today.

A political party can not spend more than $1,065,000 plus $25,000 per electorate on party vote advertising. This includes GST. So if a party contests all 70 electorate seats such as Labour traditionally does, their spending limit is $2,775,000. If a party contests the 63 general electorates only, then their spending cap is $2,600,000.

On top of the party vote spending cap, each individual candidate can spend up to $25,000 contesting the electorate vote.

Just under three million New Zealanders are on the electoral roll. The spending caps are effectively 87 cents per capita for the party vote and 58 cents per capita for the electorate vote.

Up until today, MPs and parliamentary parties could spend their parliamentary budgets on election advertising in a way which was doubly beneficial. As it was before the three month regulated period, it doesn't count towards the spending cap, but more importantly they could charge it to the taxpayer rather than have to have their party pay for it.

This is a new, and welcome, change. Previously parliamentary parties and MPs could use their parliamentary budgets to pay for blatant election advertising, so long as the advertisement never explicitly asks someone to vote for, join or donate to a party.

However in 2006 the Auditor-General blew the whistle on this and found all parties bar the Progressives had illegally spent parliamentary money on electioneering in 2005. In descending order he found Labour had illegally spent $768,000, NZ First $150,400, Greens $80,900, United Future $63,800, ACT $17,800, National $11,300 and Maori Party $48.

After the Auditor-General made his findings, there was uncertainty over what is allowable, and not allowable to be funded from parliamentary budgets. Rather shamefully, Parliament changed the law so that material such as election pledge cards could be legally funded by the taxpayers, even if printed after the House had been dissolved for the election.

This continued until 2010, when the law changed again. It was decided to align the definition of an election advertisement in the Electoral Act with Parliament's rules for the regulated period.

What this means is that from today no MP or parliamentary party can use their taxpayer funded budgets to pay for billboards, campaign buses, advertisements, pamphlets etc if they may reasonably be regarded as encouraging or persuading voters to vote or not to vote for a party or candidate.

I think this is a good thing, as it lessens the incumbency advantage that parties already in Parliament have. However the taxpayer is not totally off the hook. The Electoral Commission has allocated $3,283,250 of taxpayer money to registered political parties to use on television and radio. Disgracefully it is actually illegal for a political party to spend its own money on television or radio advertising.

So if from today you see anything from your MP or from a parliamentary party that has the crest of the House of Representatives on it (indicating Parliament has paid for it), and it is advocating either explicitly or implicitly for or against a party or candidate, then you should send a copy of it to the New Zealand Herald who I am sure will happily inquire to the Parliamentary Service whether the taxpayer is due any refunds.

* David Farrar is a centre-right blogger and affiliated with the National Party. A disclosure statement on his political views can be found here.

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