Shock, horror. A gaggle of anonymous rich-listers had a fundraising dinner for John Key in his favourite Parnell restaurant.

Meanwhile, across the political divide, his Labour Party rival, David Cunliffe, shook down a few of his admirers for a few grand to help pay for his successful leadership bid.

Two of the Cunliffe donors have had their money refunded to preserve their anonymity - and who could blame them. For the small amounts involved, who needs the hassle.

As the commentariat dash about like a pack of pitbulls, drooling for another politician to rip into, they seem to miss the point that without a reliable coterie of donors or some other funding stream, our successful and resilient little democracy risks grinding to a halt.


Over the years, I've supported the slow lifting of the veil of secrecy hiding the big donors to our political parties. How interesting the 1987 election might have been, for instance, if voters had known at the time that merchant banker Michael Fay had reportedly poured as much as $2 million into Labour Party coffers in gratitude for the Rogernomic reforms of the previous three years.

Fast-forwarding to the 2011 general election, would Act - and John Banks - have survived the revelation that a big funder in that contest was Invercargill accountant-developer Louis Crimp.

In May 2012, he popped up in the Weekend Herald calling on Act to get on with the Maori-bashing policies he said he'd paid for the previous year, with a $125,520 donation to the party war chest. He'd coughed up because his hero, Don Brash, had become the new Act leader, and Mr Crimp expected him to make good the message of his 2004 Orewa "one nation" speech.

Mr Crimp subsequently appeared in a follow-up interview on TV3, bringing the interview to a crazy end by asking the interviewer whether she had ever had sex against a tree.

Whether the new transparency required in political party funding will drive such eccentrics away is a moot question, though hopefully it will make the potential recipient party think twice. But there's no doubt that the increasingly strict rules about transparency now in place have slowed the flow of money into the parties.

But in ridding the political system of one evil, it has helped create another - political parties starved of the money needed to do their job.

The drive for transparency was fuelled by distaste for a system in which politicians and parties are beholden to rich individuals, corporations and pressure groups. But if we cut off that funding stream, the next step is obvious. A system of state funding. It was proposed by the 1986 Royal Commission on the Electoral System. Unfortunately, the politicians of the day backed off, fearful of upsetting voters.

The commissioners warned that "too great a reliance" on outside funders like trade unions, corporations and "donors of substantial wealth" would be "detrimental to our democracy and might ... lead to corruption of our political process".


They said "political parties were too important to starve" and "should be able to operate not just as electoral machines, but also as vehicles through which ideas may be discussed and sound policies developed". However, "the extent to which ordinary party members and supporters can meet the sophisticated and costly requirements of parties in a modern democracy ... is severely limited".

In the 1970s, Swedish political parties agreed to refuse private donations in return for public funding. With the exception of the United Kingdom and Luxembourg, most of Western Europe provides significant funding for parties.

Nearer to home, since 1984 contenders in Australian federal elections have relied on private and public funding. In the 2013 election, political parties and independent candidates who gained at least 4 per cent of the first preference vote, received $2.68 a vote for campaign expenses from the Australian Electoral Commission. The Liberal Party victors received $25.4 million, the Labor Party $21.5 million.

Most of the Australian states have similar public funding for elections, with varying restrictions on private donations.

The creation of the Auckland Super City has introduced a similar problem to the local government scene. A candidate for the Auckland mayoralty has to communicate with an electorate of around one million voters. Len Brown won the first Super City race with a war chest of $390,000 and the recognition that went with being the incumbent mayor of Manukau City.

In the 2013 campaign, he declared expenditure of $338,584. Of this, $273,375 came from the anonymising trust he'd used to secrete donations away in from the first election.

His main rival, John Palino, spent $149,983 - all but $22,271 out of his own pocket.

The question is, how will anyone but a rich person, or a celebrity, be able to fund a future Auckland mayoral campaign?

Locally and nationally, we want our democracy on the cheap. Rightly, we have all but rid the political scene of big anonymous donors. But that was only half the job. For democracy's sake we have to make up the shortfall.

The royal commission came up with the solution nearly 30 years ago.