Others likely to follow Telecom in ending political donations

Telecom's move to stop making donations to political parties is being viewed as a sign of things to come for corporates.

New Zealand's largest listed company yesterday said it had polled its shareholders, staff and customers, and found that halting donations "really resonates" with all of those groups.

It is understood that several other corporates give money across the board to political parties, but because the donations are under $10,000 the donors do not need to be identified.

Westpac and Sky City are among a small number of major corporates who donate to various parties with full transparency.

Westpac yesterday said it did not currently intend to change its practice.

However, public relations consultant Mark Unsworth yesterday said he thought listed companies both here and in Australia were getting more nervous about political donations.

Pressure was coming from the public and shareholders' associations, he said, and it was possible some corporates would opt against donating.

"It's the negative vibes that come with it," he said. "If you give it to the Arthritis Foundation then you're not going to be in the paper next week. If you give it to Winston Peters or someone, you could end up there."

Labour Party president Mike Williams last night said he was "disappointed but not surprised" by Telecom's decision.

The company gave Labour $50,000 before last year's election, and Mr Williams said his party was "very grateful" for the support.

Asked if the move was a sign of things to come in the corporate sector, Mr Williams said it "definitely" was.

"Transparent corporate contributions to political parties are definitely drying up and it's a shame," he said. "There will be others [who stop]."

The Telecom decision was "absolutely not" a reaction to the Government's recent regulatory action against Telecom, chairman Wayne Boyd said.

Political donations have been in the spotlight in recent weeks as Labour takes aim at the large amount of anonymous contributions National received before last year's election.

Prime Minister Helen Clark has foreshadowed changes to party financing rules, including ending anonymous donations through trusts.

It appears that Telecom's decision to stop donations has been in the making for months, and is not a direct result of the recent publicity.

The company gave a total of $150,000 to political parties in its 2006 financial year, and always intended to review its policy after the election.

Telecom's board received several questions about donations from shareholders ahead of its annual meeting, held in Wellington yesterday.

"These are shareholders' funds and we're confident that the decision we've made is the right one," Mr Boyd said. "We're here to run a company, not make political choices."

Telecom typically gave money on an anonymous basis, because it wanted to avoid any suggestion of making donations with particular policy outcomes in mind.

Last year the company decided to declare its donations in its annual report, and it was only then that some political parties were able to confirm where the money had come from.

BIG DONOR

What Telecom gave in the year to June 30, 2006:
Labour $50,000
National $50,000
Act $10,000
Greens $10,000
Progressives $10,000
United Future $10,000
Maori Party $10,000