Labour puts up dollar-a-vote election funding plan

The Labour Party is renewing its call for state funding of political parties, suggesting a formula that would give the two major parties more than $1.8 million between them.

The recommendation is contained in Labour's submission on a Ministry of Justice discussion paper covering political donations and election spending by parties after National's repeal of Labour's Electoral Finance Act.

The paper is a first step in Justice Minister Simon Power's bid to strike an all-party consensus so new arrangements are in place for the 2011 election.

Labour says state funding is justified because of the tightening of controls on private donations to political parties.

It says one approach would be to set funding levels at a dollar a vote at the previous election.

Based on last year's election, Labour would receive nearly $800,000 and National just over $1 million. The Greens would get nearly $160,000, Act more than $85,000 and the Maori Party about $56,000.

Labour's submission says such taxpayer funding is a small price to pay for transparency in party finances, rather than having governments feeling beholden to large or secret donors.

However, such a formula disadvantages new or growing parties and advantages ones in decline.

Labour says an alternative would be to pay every registered party a base sum of $50,000 as an allowance for compliance with the Electoral Act plus an additional allowance depending on membership figures.

Further public funding could be made available for policy development and electioneering.

National has traditionally been opposed to state funding. But in May, Prime Minister John Key said he was "not completely closed" to the idea. He said it had been included in the discussion paper because it would not have been a credible exercise if it had not been put on the table.

The submission also reveals Labour backing away from some of the most contentious elements it inserted into the Electoral Finance Act in 2007 as the party seeks to consign the unpopular law to the past.

Labour is still emphasising that arguments about freedom of expression should not be used as cover by those with a lot of money trying to "buy" elections - a reference to the covert $1.3 million pro-National campaign run by the Exclusive Brethren in 2005.

But Labour has backed down from its previous position that anyone who wanted to spend more than $12,000 campaigning for or against a party had to register with the Electoral Commission and was limited to a maximum spend of $120,000.

It is now saying such "parallel campaigners" should not be subject to a spending cap and should be regulated only if they spend more than $100,000.

That would ensure the public was still made aware of those wishing to influence the result of an election without restricting freedom of expression.

Labour is also suggesting a rewrite of the definition of "election advertising", saying the present one is "utterly confusing" and was a large part of the reason why the act was perceived by many as inappropriately limiting freedom of speech.

Labour has also backed off starting the "regulated period" within which maximum party spending limits of $2.4 million apply at the beginning of election year.

Previously, such limits had applied only during the three months before polling day.

Labour's change was designed to stop National spending large amounts on election advertising throughout an election year.