Lift the veil on political gifts

Lax party funding rules are the root cause of the National Party's embarrassment over a substantial donation, writes TIM BALE*.

Nice try, National. But spinning a story about allegedly dodgy dealings with anonymous donors, who have done very nicely out of your party's policies, into a witch-hunt for the spiteful whistleblower who has wrongly shopped you to the Serious Fraud Office is, as they say, a big ask.

If only you had not spent the past month ridiculing the Prime Minister's Paintergate protestations that the whole thing's a beat-up which we should all just get over. And if only your party president's bold bid for victim status did not jar so much with her more familiar "look at me, the ruthless queen bee" act.

That, and the fact that at the time she worked for the people who gave you (or was it just showed you?) the money.

Your only hope is that Labour will let you off lightly because this is one glasshouse in which nobody should start throwing stones. Labour knows that National's problem is potentially a national disgrace.

New Zealand is justly proud of its reputation as generally one of the least corrupt and most open places on the planet. But when it comes to the rules surrounding party funding, things are strangely different.

Compared with many other liberal democracies, New Zealand is lax, especially with regard to what seems to have got National into trouble - the fact that people can make large donations to political parties in what amounts to secrecy.

Almost all comparable countries insist that, over a certain sum, the source of a donation be openly declared. And this sum isn't large. Legislation just passed in Britain, for instance, means that parties have to make public the source of any donation above $15,000 - and in many places the figure is even lower.

Right now in Britain Tony Blair's Labour Party is under fire for accepting - significantly, just before the new legislation came into force - a $320,000 donation. It came from a successful publisher within days of his being allowed to take over one of the nation's tabloid daily newspapers.

The rights and wrongs of the case are too complicated to go into here. And, obviously, the fact that it involved a publisher better known for titles such Asian Babes and Nude Readers' Wives than a commitment to serious journalism has something to do with public interest in the case. But just as much of Blair's embarrassment - like Michelle Boag's - is that the deals involved seem to have been done behind closed doors.

In reality, donations from all sorts of sources present potential pitfalls. But at least in a more transparent regime the public get the chance to judge the parties involved accordingly. In the end, many are less worried by the fire than they would have been by the smoke.

One of the arguments against such openness, of course, is that it will discourage donations. Parties will be penniless and thus unable to fulfil their vital democratic role as the link between citizens, social interests and the state.

But if those involved are not sufficiently confident that their motives are beyond reproach and feel unable to conduct the transaction in the open, why should we, the public, be expected to simply take them at their word?

Perhaps, some argue, we should move, as so many other countries have done, towards state funding for political parties?

We might not like them, but we need them. We can keep up the pressure on them by limiting their spending (and here New Zealand is reasonably strict) but we should admit that they, much like non-government organisations, need subsidising - probably more so given the fact that, left to the market, only parties which represented the interests of the rich could really compete.

There are just as many arguments against state funding. Not all of them hold water. There doesn't, for example, seem to be any clear relationship between rising subsidies and falling membership. Nor do subsidies seem to discourage the entry of new parties onto the political scene.

But there are three arguments against state funding that seem particularly convincing. First, such financing blurs the distinction between the parties and the state. The whole point about parties is that they stay rooted in civil society so that the various competing interests of that society never capture, nor are captured by, the state.

Secondly, there is no popular support for state funding. Any attempt by Parliament's existing occupants to get together a cosy cartel to introduce it would be undemocratic. It would only confirm the unfortunate, and largely undeserved, reputation politicians have of being a self-serving elite.

Thirdly, state financing doesn't put paid to corruption because parties always want more. Two of Europe's best publicly-funded systems, France and Germany, have been plagued by party financing scandals for years. For all the banner headlines, Britain's largely privately funded system is seen as very much cleaner.

No system, then, is perfect. But some are better than others. Maximum transparency may not be a sufficient condition but it is an essential one. The problem is: who will cast the first stone?

* Tim Bale lectures in political science at Victoria University.