Small parties with big backers raise questions as the scramble for cash starts

While Conservatives leader Colin Craig writes big cheques, Green Party members hold sausage sizzles.

Parties are building up their war chests for this year's election, in which big donations and wealthy backers could play their biggest role since the 2005 vote.

In that year, the Exclusive Brethren spent thousands spreading pamphlets in support of the Don Brash-led National Party.

Like the Conservatives, the newly-formed Internet Party can look towards enormous financial support from its founder, in this case internet entrepreneur and millionaire Kim Dotcom.


But do wealthy individuals and large war chests translate to votes in New Zealand, and do the rules need to be changed to stop parties buying elections?

Most parties the Weekend Herald spoke to said big money did not influence New Zealand elections. Strict rules on donations, disclosure and spending limits prevent individuals or small, interested parties holding disproportionate influence over voters.

But the Greens, who are funded partly by their MPs giving 10 per cent of their salary - tithing - believe the rules may need to go further to prevent rich individuals or groups having too much power at election time.

Mr Craig manages high-rise apartments and his company, Centurion, is believed to hold around $1.3 billion in assets.

Electoral Commission records showed that he had made donations to his party totalling $135,000 since October. The Conservatives plan to spend at least another $1 million during this year's campaign, at least half of which would come from his pocket.

Mr Craig said fledgling parties needed either an enormous volunteer base or huge amounts of money just to get noticed.

The Conservatives spent more than $800,000 on leaflets for the 2011 election campaign - more than the entire declared party expenses of the Green Party, which gained 14 MPs.

Mr Craig said that while his money helped with initial publicity and brand recognition, it did not buy votes.


"I think the concept that you can buy an election is nonsense," he said. "Kim Dotcom could throw the limit at this election and I don't think it would make a scrap of difference.

"What matters most for us is the grassroots strength of a party. [Having] six thousand people on the ground matters much more than money ever will."

The Conservatives spent $1.8 million in 2011, more than any other party except National, but did not gain a single seat.

Mr Dotcom is reportedly worth $200 million and is the only financial backer of the Internet Party.

He said the party was still being set up, so he could not comment on how much he would invest in it. But he did not believe that his wealth gave him an advantage.

"My financial support just gets the party started," he told the Weekend Herald. "Success comes from having a vision that appeals to people, not from the amount of money you spend."

A party spokesman said that the advantage of having a well-off backer was lessened by electoral rules. The Electoral Commission placed a strict limit on spending in the three months before the election.

Other political parties also had big donors.

Commission records reveal regular contributions to the Labour Party from unions and a bequest last year of $400,000.

National gets donations from businesses such as car dealerships, private equity firms and the upmarket Parnell restaurant Antoine's.

The Act Party has long-standing donors such as former MP and leadership candidate John Boscawen and entrepreneur and rich-lister Alan Gibbs, who have each given more than $300,000 to the party.

New Zealand First has received donations from racing industry heavyweights Philip and Peter Vela.

These parties said it was the trickle of tiny, regular bank deposits from members, not one-off donations, that provided most of their income.

"The bulk of National's campaign funding has come from smaller donations," said party president Peter Goodfellow.

Mr Goodfellow would not comment on the health of National's war chest but said the party was attracting donations from a broad range of individuals and companies.

Labour's coffers were believed to be slightly depleted by two by-elections and a citizens-initiated referendum.

The party's general secretary, Tim Barnett, said those campaigns had helped double Labour's membership in the past 15 months.

He also said the act of giving to a party was as valuable as the money. When people donated, they felt they had invested in a campaign and had a sense of ownership over the result.

Mr Barnett said he did not believe that it was possible to buy votes in New Zealand.

"In the United States you need to spend a million or more to get into many of the key political positions, compared to here where a budget of $15,000 to $20,000 in an electorate is probably adequate to get in.

"A party's spending bears little relation to the vote they get. We have sophisticated voters in New Zealand and I think they see through a lot of that stuff."

Labour and National noted the importance of a transparent donation system, which has been fine-tuned to make elections as fair as possible.

The amount a party can spend in the period before the election will be limited to $2.91 million - $1.09 million for party expenses and $25,700 for each of the 71 electorates.

All parties are allocated a budget for television and radio promotions.

Single or multiple donations adding up to $30,000 must be declared to the Electoral Commission, and series of smaller payments of more than $1500 must also be declared if they add up to more than $15,000. Parties cannot accept donations of more than $1500 from overseas.

Attempts to keep donations secret by channelling them through trusts have also been stamped out.

Loans to parties must also be disclosed. This rule was introduced after Mr Craig loaned $1.6 million to his party without disclosing it, then later wrote it off as a donation.

The Green Party believes the rules could be amended further. It wants an inquiry to investigate state funding for election campaigns.

A spokeswoman said: "We see partial public funding of parties as a further step to help level the playing field between parties and to help combat parties being captured by wealthy interests."

The party said it was important that the level of public funding was not set so high that the parties did not need to go to the community for more money.

The Greens were heavily dependent on their 14 MPs, who donated nearly $250,000.

But their campaign director, Ben Youdan, said the party had enlisted a full-time fundraising manager for the first time.

"We have a national fundraising operation which sends out appeals to our database, and at the most local level of the party, people do things like sausage sizzles and garage sales - it all matters."

But that money went only so far.

"Obviously you need to have the resources to stay in the game. But we proved in the last election that it wasn't necessarily about the size of your war chest. Having a really good party, policies and people is incredibly important."