A new report has lifted the lid on political donations. Photo / Mark Mitchell
A report into the shady world of political donations has found that many donors enjoy access to politicians in exchange for the money they give to political parties.
The authors propose strict donation caps to curb influence through donations, and taxpayer funding for political parties to ensure political parties were well-funded despite the crackdown on donations.
Money for Something, a report by Max Rashbrooke and Lisa Marriott into political donations, spoke to eight donors about their reasons for donating to political parties. Donors were granted anonymity in the report, allowing them to speak frankly about what they expected for their money. They also spoke to MPs and party officials about their experience with donations.
Green MP Golriz Ghahraman, who had attempted to reform donations with a members’ bill, said the report should push Labour into doing more to reform donations law.
“We should all be really concerned with these findings in terms of the high-level access that money buys to politicians including prime ministers and ministers of the Crown,” she said.
“We finally have evidence that money is perverting our democracy. We need action,” Ghahraman said.
The Government has already made some donations reforms and is currently reviewing New Zealand’s electoral laws - although this review will not consider donations. Ghahraman said this report should look at donations.
What money buys
All donors claimed they did not “gain influence from their donation”, but one noted that it was “‘probably inevitable’ in smaller parties that individual donors could, and would, have greater influence”.
Donors told the report their donations might get them “an extra lunch or dinner – but it didn’t drive policy”.
They were also told they got “wonderful opportunities, e.g. cocktail parties”, and that there is “more opportunity to have a direct meeting, but that doesn’t mean that you will influence the decision”.
Another donor described the relatively good access they got to politicians, but did not think it amounted to special influence: “John Key lives nearby but we only talk in generalities. Helen Clark came to my house a couple of times. David Seymour has popped in a couple of times and had a chat about life.”
Some donors believed it was unfair that they could reap the rewards of donating to parties, while people with less money could not.
One donor remarked there was a “real problem with people who accumulate a lot of money supporting the systems that have allowed them to accumulate a lot of money”.
Another said they did not think it was “right that rich people can distort democracy”.
It was not just individuals who sought to donate to parties. Large firms also donate, either out of an altruistic belief in the democratic process, or to ensure that they were on-side with whichever political party was in power.
A former Labour general secretary told the report that “large firms like banks regularly donated $5000 (over $10,000 in today’s money) to both parties”.
What political parties think of donations
The report also spoke to people on the other side of the divide - the MPs who received donations and spent money.
The former leader of a political party appeared to say that they were comfortable with the fact that donations bought influence over the political system that some people did not have.
“Do I want a 19-year-old with an NCEA level one qualification having the same influence as a university professor or a successful businessman? I don’t much care if the university professor or the businessman has more influence on the political process in some kind of way than someone who has no particular experience,” they said.
One former MP who spoke to the authors said that some people believed that “if you have money you can pay for yourself to get into Parliament – and if you don’t have money then you shouldn’t be there.”
The report found that despite numerous donations scandals ending up in court, successful prosecutions were rare.
Who gets what
The report found that there was not a massive imbalance in the number of donations received by Labour and National in small donations.
“National received more than Labour, although not by the kind of margin that might be popularly supposed,” the report said.
National was ahead of Labour by over $2 million in money received in donations over $15,000 from 1996 to 2019 (the figures were inflated to 2020 dollars for the sake of comparison).
In terms of donations both above and below the $15,000 threshold, National was well ahead, out fundraising Labour by $13m in the period from 2011 to 2019.
“It could be seen as surprising that National’s greatest advantage has come from donations below, not above, the disclosure threshold. However, National is gaining especially large sums in the bracket $5,000–15,000 – that is, relatively large donations that are well beyond what most New Zealanders could realistically afford to give, but which nonetheless remain anonymous to the public,” the report said.
One tool Labour has to match the fundraising from business is the funding it gets from affiliated unions, which have a historic relationship with Labour.
However, the report found that while “virtually all” union money was donated to Labour, the party still received more money from business.
They put this down to the “financial weakness” of the modern trade union movement.
Possible fixes
The report recommended changes to New Zealand’s donations laws to encourage greater transparency, whilst balancing people’s right to participate in the political process by donating money to political parties.
It recommended disclosing the identity of all people giving over $1500 to political parties and that no individual should be allowed to give more than $15,000.
The report did say that well-funded political parties were important to train candidates and develop policy. The authors recommended using state funding to replace parties’ reliance on donations.
They proposed something called a “democracy voucher”, which citizens give state-funded vouchers to a political party of their choice. This would give parties a share of $4 million in campaign funding. They recommend funding this out of the broadcasting allocation, the state funding parties get in election year to spend on certain advertising.
They also recommended tax credits, costing roughly $6-$8 million a year provided to people donating up to $1500.