Analysis by Dr Bryce Edwards – Democracy Project (https://democracyproject.nz)

Elections in the United States are dominated by big money. But what isn’t commonly understood is that most of it is raised and spent, not by the political parties and candidates for office, but by special interest groups who run their own election campaigns to influence the outcome.

Billions of dollars are channelled into campaign groups to run what are normally attack ads against politicians. The reason for this is because the political donations rules are designed to encourage this – with big clampdowns on people funding the politicians, but allowing them to more easily give to advocacy and lobbying groups instead.

This is a trend that is finally starting to occur in New Zealand. As the rules tighten on money going to candidates and political parties, this is pushing the big money towards less regulated and less transparent special interests. Critics call this “dark money” or “soft money” because it’s outside of the party system and therefore more difficult for officials and the public to scrutinise.

As with the US, such groups are incentivised to run negative attack campaigns, because if they run positive campaigns in support of a party or candidate, then that spending has to be allocated against the expenditure limits of the politicians, who also need to sign off their agreement with the campaigns (which they never want to do).

Dark money spent in the 2023 general election

Some of the money spent by campaign lobby groups must be declared. The Electoral Commission has just published the declarations of those organisations that spent more than $100,000 on advertising at the last election. However, there are many ways that “dark money” spending can stay below the threshold, and so most lobby group campaigning isn’t captured by the Electoral Commission.

The amount spent by these so-called “Third-Party promoters” has escalated quickly in recent elections. At the 2020 election, only $147,000 was spent. This increased by 13 times in 2023, with nearly $2m being declared. You can view all the declarations here: Registered promoter expenses for the 2023 General Election

The top spender lobby groups were the following, in order of money spent:

1. Vote for Better Limited: $386,515
2. New Zealand Taxpayers’ Union: $371,565
3. New Zealand Council of Trade Unions – Te Kauae Kaimahi: $299,344
4. Hobson’s Pledge: $283,899
5. Family First New Zealand: $204,771
6. The Better NZ Trust: $266,069.39
7. Groundswell NZ: $283,899

Lobby group spending dominated by the political right

This big spending list is dominated by rightwing campaigners – with only the CTU and Better NZ Trust being aligned with the leftwing parties. The latter carried out a campaign promoting policies to enable greater electric vehicle uptake. It’s unclear who funded the group, but previously they had listed one of their supporters as being Energy Efficiency & Conservation Authority (EECA) – a government agency – which led to allegations that they were a “sock puppet” group. And the CTU ran an attack campaign against Christopher Luxon, with advertisements saying he couldn’t be trusted.

On the right, there was a real mix of socially and fiscally conservative lobby groups. The biggest spender was the mysterious Vote for Better group, run by businessman Tim Barry, whose main interests are in the horse racing industry.

The next biggest spender was the Taxpayers’ Union, run by director Jordan Williams, which ran anti-Government campaigns, mostly focusing on extravagant spending. Some of the TU’s declared advertising expenses were paid to The Campaign Company, which is also owned by director Jordan Williams. The Campaign Company was also contracted to several other lobby groups – such as Groundswell and Hobson’s Pledge. The company was also employed by electorate candidates, such as NZ First’s Casey Costello.

Some of this is covered today by Farah Hancock’s very good RNZ report, $2m surge in election campaign spending by third-party groups. In this she raises whether some groups such as Hobson’s Pledge have been involved in “astro-turfing”, in which elite well-funded campaigns are passed off as grassroots movements. She also draws attention to the increasing amounts being spent by the conservative groups – Hobson’s Pledge increased their spend from $254,115 in 2017 to $283,899 last year, and Family First went from $141,224 in 2020 to $204,771 in 2023.

There were 31 “third party promoters” that were registered with the Electoral Commission because they were planning to spend significant amounts of election advertising, but 26 of these didn’t make a declaration, presumably because they say they didn’t spend above the $100,000 threshold that necessitates one.

RNZ’s Farah Hancock has also investigated some of these groups. One appears to have been politically successful in its objectives: “The Natural Health Alliance encouraged voters to choose NZ First to get the Therapeutic Products Act repealed. It ran several full-page advertisements in the New Zealand Herald. Chairperson Paddy Fahy indicated these cost close to $10,000 each. Repealing the Act formed part of National’s coalition agreements with NZ First and ACT and is included in the government’s 100-day plan.”

While we know some of what these campaign groups have spent money on, it’s difficult to discover where they raised their money from. Although New Zealand’s political donations rules keep tightening up – and some scholars think they should be tightened significantly more – this has merely pushed the big money into these more mysterious groups, who don’t need to disclose their funding. This trend is only likely to worsen. And because such groups are incentivized to run campaigns against political parties (because the rules discourage them from campaigning in favour of parties or candidates), New Zealand is likely to go further down the route of elections dominated by Americanised attack advertising funded by dark money.

Fights between left and right activists about such dark money are likely to escalate. The Labour Party’s Greg Presland, who is also a part owner in corporate lobbying-PR-consulting firm Polis Consulting Group, has been drawing attention to the funding of groups on the right, asking questions about the rightwing Vote for Better Limited, which was the biggest campaigner last year – see: About the promoters electoral returns

Here’s his key point about this campaign run by businessman Tim Barry: “There is nothing to suggest that he is a well healed individual who is deeply upset with the direction of the last Government and the thought struck me what if he was paid by someone to do all of this? What if he was instructed by a Fisheries Company or an Oil Company or a fundamentalist American Christian Church or the Atlas Network for that purpose to do his best to undermine confidence in the left during the election campaign? The problem with the promoter rules is there is no obligation for them to say who they were paid by. And it can be an overseas person or corporation.”

Other political donations scrutinised

Newsroom’s Jonathan Milne has also drawn attention to a big mining company that appears to have successfully influenced an election race on West Coast last year. He has been investigating the spending of $32,600 by Bathurst Resources to bankroll the campaign of an Independent candidate at last year’s election, which is said to have been a decisive factor in leading to Labour’s Damien O’Connor losing to National’s Maureen Pugh – see: Big coal company bought West Coast election campaign

The mining company was opposed to the Government’s mining policies, and so funded the contest of independent candidate Patrick Phelps who was campaigning for more mining on the West Coast. Phelps is the manager of Minerals West Coast Trust, which last year was given $220,000 by various mining companies.

The donation from Bathurst Resources meant Phelps was the biggest spending candidate, and according to various sources was able to pull enough votes off O’Connor to let National win the seat – something that the Bathurst Resources company also boasts about.

The experience has made Labour’s O’Connor even more critical of the role of the wealthy in the political process: “There are many international companies and organisations wanting to influence New Zealand elections for their own purposes – the smoking industry, the investment and real estate industry as we’re starting to see. And there’ll be many more… I think what people have to do is follow the money, ask the question: why such investments would be made? And for the most part, no business makes an investment without some realistic expectation of a return.”

The big fundraising and spending electoral candidates

The Electoral Commission released the donations and expenditure declarations of all electorate candidates last week, which means the public has a better understanding of the money being used by politicians at the local level. Below are some of the top figures from these declarations, detailing whether they were successful in their campaigns.

The top ten donation recipients:

1. Siva Kilari, National, Manurewa – unsuccessful: $110,483
2. Mahesh Muralidhar, National, Auckland Central – unsuccessful: $109,496
3. Shane Jones, National, Northland – unsuccessful: $95,524
4. Chlöe Swarbrick, Greens, Auckland Central – successful: $95,023
5. Chris Bishop, National, Hutt South – successful: $98,549
6. Cameron Brewer, National, Upper Harbour – successful: $86,659
7. Tim Costley, National, Ōtaki – successful: $79,679
8. Hamish Campbell, National, Ilam – successful: $70,677
9. Scott Sheeran, National, Wellington Central – unsuccessful: $64,260
10. Catherine Wedd, National, Tuktuki – successful: $61,920

The top ten election advertising spenders:

1. Scotty Bright, Democracy NZ, Port Waikato – unsuccessful: $41,905
2. Rachel Boyack, Labour, Nelson – successful: $32,560
3. Julie Anne Genter, Greens, Rongotai – successful: $32,554
4. Raf Manji, TOP, Ilam – unsuccessful: $32,502
5. Tim Costley, National, Ōtaki – successful: $32,089
6. Chlöe Swarbrick, Greens, Auckland Central – successful: $31,643
7. Dana Kirkpatrick, National, East Coast – successful: $31,565
8. Cameron Brewer, National, Upper Harbour – successful: $31,243
9. Katie Nimon, National, Napier – successful: $31,191
10. Carlos Cheung, National, Mt Roskill – successful: $31,072

Some of this information is also available today in Glenn McConnell’s very good Stuff article, The politicians who were flush with cash and broke the bank campaigning

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

This article can be republished for free under a Creative Commons copyright-free license. Attributions should include a link to the Democracy Project (https://democracyproject.nz)

In this the seventh episode of A View from Afar podcast for 2023 political scientist Dr Paul Buchanan and Selwyn Manning examine the strengths and weaknesses of democracy around the world.

In particular Paul and Selwyn consider how and why democracy in many countries around the world is on the slide.

They examine the causes of democratic backsliding and also test why the erosion of high democratic ideas have, in many cases, popular support.

First, Paul offers a context, and defines democratic backsliding. He identifies the countries that are decisively eroding their own democracies of principles that were once embraced by both power elites and citizenry.

The Questions include:

• Why are we seeing more democratic backsliding in recent times?
• Is it just a political phenomenon or does it extend beyond the political sphere?
• Where has democratic backsliding been most evident?
• What do Chile, Guatemala, Israel and Thailand have in common when it comes to backsliding?
• What is occurring in the United States?
• If a democracy “backslides,” what does it slide into?

INTERACTION WHILE LIVE:

Paul and Selwyn encourage their live audience to interact while they are live with questions and comments.

To interact during the live recordings of this podcast, go to Youtube.com/c/EveningReport/

Remember to subscribe to the channel.

For the on-demand audience, you can also keep the conversation going on this debate by clicking on one of the social media channels below:

• Youtube.com/c/EveningReport/
• Facebook.com/selwyn.manning
• Twitter.com/Selwyn_Manning

RECOGNITION: The MIL Network’s podcast A View from Afar was Nominated as a Top Defence Security Podcast by Threat.Technology – a London-based cyber security news publication. Threat.Technology placed A View from Afar at 9th in its 20 Best Defence Security Podcasts of 2021 category.

You can follow A View from Afar via our affiliate syndicators.

Analysis by Dr Bryce Edwards.

Democracy in New Zealand could and should be improved in so many ways. So it’s a pity that the Government has yet again produced a review of elections that has delivered a disparate and incomplete package of recommendations. Few of the recommendations will ever see the light of day and, if they do, those chosen will favour the vested interests of whoever is in government at the time.

The interim report of the Labour Government’s He Arotake Pōtitanga Motuhake – Independent Electoral Review has just been published, and as an overall package it’s unconvincing. There are plenty of individual proposals that on their own might improve politics, but the whole project is unlikely to lead to the sort of sweeping reform that the panel are suggesting.

Reforms for the vested interests of politicians

The headline recommendations of the report from the panel are about lowering the voting age, holding a referendum to shift to a four-year parliamentary term, giving all prisoners the right to vote, decreasing the MMP threshold to 3.5%, abolishing the “coat-tail” rule, and capping donations that people can make to politicians. Some of these would make New Zealand more democratic, while others would make the country less so.

For example, getting rid of the one electorate “coat-tail” rule will be good for parties like Labour and National – and might generally be populist – but will reduce the representation of minor parties, leading to a less representative parliament. Parties that win an electorate seat and get, say, three per cent of the vote, would no longer be proportionally represented in Parliament. In the current Parliament, for example, Te Pāti Māori would be denied its second seat.

But the problem is that the panel’s package is something of a pick-and-mix selection for politicians to choose between. A scattergun approach has been taken – with tinkering here and there, but nothing comprehensive.

Most of the recommendations will appeal more to the Green and Labour politicians’ interests. And already there have been criticisms that the reforms appear designed for the interests of those parties currently in power. This is unfortunate. In dealing with major changes to how the rules of elections are run, the process needs to be one that works on a level playing field rather than just handing more power to whoever is in charge.

A Wasted opportunity for reform

The latest review has been sold to the public as a “once in a lifetime” chance to overhaul elections and the creaking old Electoral Act. However, it’s turned out to be quite the opposite – a piecemeal process, which mostly just rehashes the flawed review carried out in 2012 by the Electoral Commission, which was also toothless and lightweight.

The current review could have been so much more useful if it had concentrated on just political finance – fixing up the very serious problems of money in politics. This was actually the main justification for the review, and yet on the question of political fundraising it ends up being very much “once over lightly” instead of dealing with the problem systematically and in-depth.

For example, although one of the biggest current issues in political funding is the propensity for politicians to run “Cash for access” schemes in which Cabinet ministers and the like charge for meetings with wealthy businesspeople, this has been ignored by the report – as has a lot of other dodgy fundraising that has led to scandals, Serious Fraud Office charges, and court cases.

The panel has come up with novel recommendations for dealing with donations and state funding of parties, and these now need some serious discussion. But unfortunately, the panel has hardly scratched the surface, and proposed various recommendations that may not work in practice.

Similarly, the panel could have focused on constitutional reforms, a review of the MMP electoral system, or even just electoral administration. Instead, the panel has dipped into some areas, left others alone, and all without any discernible pattern or logic. The result is that each recommendation sits on its own, is seemingly superficial, and is unrelated to the other recommendations.

This isn’t exactly the fault of the panellists that the Government handpicked for the role. This was a panel set up by former Justice Minister Kris Faafoi before he gave up the portfolio and became a lobbyist. Unfortunately, he didn’t do his homework when he set up the review, which led to a botched terms of reference that directed his panel on what they should and shouldn’t look at.

Any attempt to design a process to build consensus and broad support for changes to democracy has been thrown out in favour of a process that is likely to treat electoral rules like a political football.

The review could have been a significant and in-depth opportunity to look at every aspect of the electoral system, or even just one aspect like political donations, and to consider all sorts of radical or fresh ideas that might improve the way our elections translate the popular will of the people into parliamentary representation.

More debate is required and less partisan manoeuvring

Despite the shortcomings of how the whole exercise has been set up and what they have come up with, all of the recommendations do deserve much more debate and serious consideration. So far, the public reaction to the interim reactions has been rather muted, which suggests the conversation is already ended before it’s begun.

On the one hand, the Greens have strongly endorsed the recommendations, and on the other hand Act has declared the recommendations to be essentially partisan attempts “produced by left-wing activists trying to screw the scrum”.

What’s more, the Prime Minister has now said that the Labour Party will essentially cherry-pick from the interim review, and put forward its own solutions on electoral reform at the election, pre-empting its own panel’s final report which is due a month after the election.

This brings the whole process into question, making it look like a waste of everyone’s time. Once more the public could be forgiven for feeling that the process is just another one of Faafoi’s botched attempts at reform that won’t go anywhere but is designed to make it look like the Government is delivering something when they’re not.

Referendums on the electoral system

The one recommendation that all the politicians agree upon from the report is reducing elections to every four years instead of three. Of course, this is to be expected – the politicians have a very strong vested interest in having their job performance reviewed much less often. This simply amounts to having less democracy.

So, if there is one recommendation that the review panel might easily get across the line it’s the idea of having a referendum on the length of the parliamentary term.

But maybe other areas should also be taken to a referendum. The most interesting one would be on what amount of donation should be allowed from any one individual over a term of Parliament.

The panel has recommended individuals should be allowed to give up to $30,000. Of course, there are not many people who could afford to give away anywhere near that amount. And it’s curious as to why the panel think that this exact amount should be allowed.

Recent survey evidence commissioned by the Victoria University of Wellington shows that about two-thirds of people want donations above $10,000 to be made illegal, and almost half of the public would outlaw donations above $1000. Hence, if a referendum was held on the topic, then surely a much lower figure than $30,000 would be agreed upon.

All of this serves as a reminder that in designing the rules of our democracy, we should be wary of listening too much to either the loudest voices or the vested interests of the politicians themselves. It’s time now for the public to have their say – you can read the report and make a submission here: He Arotake Pōtitanga Motuhake – Independent Electoral Review.

Earlier this week, in the wake of a decision by the Supreme Court of Aotearoa New Zealand, the Government announced it would draft a Bill which would extend the franchise in New Zealand to sixteen- and seventeen-year-old citizens and permanent residents. (See this press release on Scoop from the ‘Make it 16’ advocacy group, this on Evening Report from The Conversation, and this from RNZ.)

Indeed, the denial of the franchise to these younger people may contradict the New Zealand Bill of Rights. Yet, in Aotearoa New Zealand, the Government explicitly denies Covid19 booster vaccinations to people based on their ethnicity. (See this on Stuff.) Contradicting the Bill of Rights has not even been discussed with respect to vaccination rights.

I have no concern about sixteen- and seventeen-year-olds being less capable of voting wisely than, say, their parents. Nevertheless, whether this is a good idea for 2026 should be seen in the context of the history of democracy. Democracy is not a form of governance which arrived in one hit. Rather, democracy worldwide is a long-running ‘project’ which remains incomplete, more incomplete in some countries than others.

The progress of the democracy project can depend on the sequence of democratic reforms undertaken.

Sequences of Democratic Reforms in United Kingdom and New Zealand.

The first step towards democracy in England was the Magna Carta, in 1215. Further steps were taken in the English (and Scottish) Civil War of the 1640s, when the King was deposed, and then beheaded, by Parliamentarians. These 1640s’ developments were problematic, and largely reversed with the restoration in 1660. But a big step was then taken in 1688, when the Glorious Revolution in England and Scotland replaced the absolute monarch with a constitutional monarchy.

Early steps on the road to democracy were power struggles between King and a Parliament of nobles. The mass of the people were largely unaffected by the gradual gains made by Parliament; in some cases they could be worse off, having less recourse to the King to override abuses perpetrated by the nobility.

In the eighteenth century, important steps to democracy were taken in the United States (1770s and 1780s) and France (from 1789 to 1798); both in the forms of Liberal (or ‘bourgeois’) revolutions. Again, these may not have much brought many people in these countries closer to the levers of power; we may note, for example, the matters of women and of slaves. These revolutions led to a conservative reaction in the United Kingdom, a formal Union from 1801.

Nevertheless, democratic reforms of a progressive nature did take place: namely, the Reform Acts of 1832, 1867, 1884, and 1918; each of which significantly extended the franchise in the United Kingdom. In addition, ‘plural voting’ (some people being able to vote more than once) was abolished in 1848. This meant the United Kingdom essentially had a system of ‘one man, one vote’ by 1918. While the 1918 reform also gave the vote to some women, it was in 1928 that women and men aged over 21 had the vote on an equal and universal basis. The United Kingdom voting age was lowered to 18 in 1969; and to 16 in Scotland in 2014.

New Zealand essentially inherited the British Law of 1832. All Māori men over 21 gained the right to vote (in special Māori electorates) in 1867. From then, universal male voting was introduced in 1879, and plural voting was eliminated in 1889. Working-class men gained the vote in 1879 (1867 for Māori), and all women in 1893; the only cases where New Zealand reforms preceded equivalent British reforms.

New Zealand of course introduced the critical reform of ‘proportional representation’ in 1996; a reform still awaiting in the United Kingdom. So New Zealand did precede the United Kingdom in the more critical extension to democracy.

Elite versus Non-Elite Voting

The key step changing the class balance-of-power was the ‘universal male franchise’. The female franchise was of course important, although working-class men then were reticent about this, believing that, on balance, women would vote for conservative candidates. That ‘concern’ was probably valid, from the working-class point of view; although, fortunately, the critical universal reform had already taken place.

On this matter of women voting more conservatively, we may note the poem by James K Baxter – The Ballad of Calvary Street – with its famous line “National Mum and Labour Dad”. Baxter wrote this in 1944, when he was 17 years old. (And here’s an academic reference to that line, in Landfall volume 16, 1962.) Many would argue that women this century vote less conservatively than men; but, then, the meaning of ‘conservative’ may have changed; try substituting the words ‘privileged’ or ‘advantaged’ instead. A vote for Labour may now be at least as much a vote for ‘no substantial change’ as a vote for National once was.

Sequence does matter. If, in the nineteenth century, middle-class women had got the vote before working-class men, then there could have been a considerable delay in granting the vote to working-class men.

There may be similar concerns with the proposal to lower the voting age. The push to lower the age appears to be driven by the new elite, or at least the teenage children of the new elite. And, it is almost certainly true that, at present, new-elite young people are significantly more likely to vote than are working-class or underclass youth. So the question is whether this mooted lowering of the voting age will in any way impede more important and more necessary democratic reforms. Certainly, in the past, it has been elite interests which have been the barriers to the eventual achievement of hard-won extensions to non-elites. (Or, maybe lowering the voting age might facilitate further democratic reforms which benefit non-elites?)

Extensions to Democracy unrelated to the extension of the Franchise

The introduction of proportional representation was clearly the most important of these in New Zealand’s history. This reform meant that one person’s vote had the same value as any other person’s vote.

(We see many overseas examples where this is not the case. The most obvious is that voters in California have zero influence in choosing who the President will be, and almost zero influence in determining the balance of power in the senate. There are two issues here. Re the president vote, California always votes Democrat; it is not even close to being a ‘swing state’. Re the Senate vote, the ratio of population to senators is 20,000,000 to 1. In neighbouring Nevada, which is also a swing state, there are 1,600,000 people per senator. Nevada senators have the same weight in the federal Senate as do California senators.)

The discussion around democracy gets more diffuse when it goes beyond ballot-box issues. Here we move into the realm of economic democracy, and the importance of expressing constitutional equality in the area of public property rights. Huge amounts of each country’s productive economic resources are subject to collective ownership – that is, collective stewardship and (ideally sustainable) utilisation. In some cases, collective resources are local, in some cases they are national. And in many cases resource ownership/stewardship is global, meaning that each country has equity with respect to a population-weighted share of global public resources.

Economic democracy means that every ‘person of age’ – currently that age is 18 in most parts of the world – has an equal share of the public property rights associated with collectively owned public resources.

Economic democracy is as conceptually simple as political democracy. Yet the elites muddy the waters, just as they have done through most of human history with respect to the establishment of universal voting rights.

In this case democracy means that economic organisations – ‘firms’, for want of a better word – should be paying a ‘production tax’ (a mix of a rent and a service fee) for their use of collective resources. Firms should be paying that tax in proportion to their size. Thus, if Firm A is twice as big as Firm B, then Firm A – using twice as much public resource – should pay twice as much production tax. (The next thing to be aware of is that, by definition, production taxes are the same as income taxes; just another name. A change of language does, however, facilitate a new way of thinkingabout income tax.)

The second half of the argument for economic democracy is that every person ‘of age’ – as equal shareholders of our collective resources – should receive an equal stipend from production tax revenue.

Economic democracy can be represented by the bumper sticker slogan: ‘flat tax, universal income’.. In conventional language, it’s a built-in rights-based (ie non-targeted, non-bureaucratic) mechanism of ‘progressive taxation’. Depending on the rate of production tax and on the size of the universal stipend, the mechanism may be broadly neutral in its income distribution effect, or may be more ‘redistributive’.

As a simple way of conceiving this, we may think of public finance at the local council level. Imagine two proprietors in a town, and three equal properties in that town. Proprietor A owns two of the properties, and proprietor B owns the other property. Under the principle of economic democracy, A pays twice as much in property rates as B. But the benefits of the revenue raised are shared equally between all persons in that town, meaning that A and B get the same as each other.

Prospects for Economic Democracy

Possibly, in western societies our present position is much like the United Kingdom in the year 1801; meaning that the First Economic Reform Act may be about 30 years hence, say around the year 2050. Economic democracy is needed now, of course, just as political (and economic) democracy was desirable in 1801.

So the question is, would the extension of political democracy to sixteen- and seventeen-year-olds impede or enhance our journey towards economic democracy?

My fear is that this extension to the franchise would create a further impediment to the achievement of economic democracy. The first reason, already alluded to, is that this change would slightly entrench the power of the new elites; and that it is the elites who represent the main impediment to the achievement of democracy by lower socio-economic groups.

Part of the sway of the elites is their obsession with ‘sound’ (in practice, ‘miserly’) public finance. Thus, if the age of entitlement to a universal public stipend is 16 instead of 18, then such a provision will be more expensive, because there will be more people entitled to that universal payment.

Second, the discussion around economic democracy – a discussion easily derailed by our old and new elites – is that the matter of paying an adult stipend to school ‘children’ may become a substantial diversion from the main discussion.

Third, there is the problem that advocates of a Universal Basic Income are often their own worst enemy. Many argue for a universal gift (‘grant’, ‘transfer’) without appreciating that the achievement of this payment is a consequence of a production tax regime as outlined above. Economic democracy cannot be the one part without being the other part. Production taxes and universal stipends represent an alternative to graduated income taxes and targeted transfers; not some kind of ‘stick on’ ‘band aid’ to our present conception of income taxes. If advocates don’t get this right, they will be forever on the back foot when challenged on how to pay for what they present as a ‘gift’. (Equity dividends are not ‘gifts’.)

Further, many of the advocates of a Universal Basic Income see the ‘universal gift’ as a payment sufficient to create an alternative to labour, thereby enabling non-elites to choose to not work. This conception of a universal welfare state riles elites, and allows them to use the ‘labour supply’ issue as a ‘straw man argument’ against economic democracy. The important reality is that economic democracy enhances the functioning of the labour market, rather than stifling it. It should be that a universal stipend falls short of a stand-alone wage. The fact that participation in the labour market would not cost a person their stipend means that they are much better incentivised to participate in non-exploitative labour. In other words, a proper implementation of economic democracy creates the labour-supply elasticity – the ‘surge capacity’ if you like – that enables people to establish healthy work-life balances, and also enables people to adjust those balances (in favour of more paid work) in times of labour shortages.

I may be wrong in my concern that the inchoate economic democracy project might be derailed by the granting of full democratic rights to a younger cohort of people. Maybe, an extension to our education (probably in Years 9 and 10, given NCEA requirements for older students) towards “civics’ education” might lead to school students becoming much more aware of the ‘full gamut of democracy’ discourse; civics would need to be well-taught, and not massaged to conform with elite interests. If quality civics’ education is a co-requirement of extending the franchise to senior school pupils, and both teachers (who are not part of the social elite) and genuinely progressive students ‘grasp the nettle’, then a lower voting-age could smooth some of the many bumps in the road to a more complete democracy.

At the end of this essay are two academic references for my work on the theme of economic democracy.

Conclusion

The extension of democracy from political democracy – the right to vote in elections – towards economic democracy is critical if humanity is to have a future. Any proposals to extend democracy in ‘sideways’ directions must be evaluated in terms of whether these proposals inhibit or enhance the achievement of the more important reforms.

Just as if elite women had been given the vote before non-elite men then the achievement of universal suffrage may have been delayed (or otherwise compromised), so also an extension of voting rights which in practice will mainly benefit young elites may also endanger an already fraught path towards universal democracy. (Or it may not, if there can be genuine improvements in ‘democracy education’ as part of the reform.)

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

References:

Public Equity and Tax-Benefit Reform
https://thepolicyobservatory.aut.ac.nz/publications/public-equity-and-tax-benefit-reform
“economic democracy: one economic citizen, one dividend”

Symposium on The Basic Income Guarantee
https://scholarworks.wmich.edu/cgi/viewcontent.cgi?article=4024&context=jssw
Keith Rankin: Prospects for a Universal Basic Income in New Zealand

Political Roundup: The High barriers to lowering the voting age

Sixteen-year-olds aren’t about to get the right to vote anytime soon. Despite yesterday’s Supreme Court declaration that a voting age of 18 violates the Bill of Rights, there are still many barriers to get over before the voting age could be lowered.

In fact, as a best-case scenario, youth voting campaigners are now setting their sights on 2029 as the first general election for 16-year-olds to vote in, and perhaps 2025 as the first time that they might be able to vote in local government elections. But to get an extended franchise by these dates would require that the following very high barriers be overcome.

1: Public opposition to lowering the voting age

The problem for advocates of lowering the voting age to 16 is the vast majority of voters disagree. Poll after poll shows that about three-quarters of the public is not yet convinced that it’s a good idea. The public has actually been more favourable to giving the vote to prisoners than they are to letting younger people vote.

A TVNZ Vote Compass poll in 2020 showed 70 per cent in favour of a voting age of 18 years, and 20 per cent favouring a lower age. Then a 1News Colmar Brunton poll showed a massive 85 per cent opposed lowering the voting age to 16. And Curia Research also polled on the question in 2020 and found 88 per cent favoured the status quo. A more recent Curia poll showed that 79 per cent opposed dropping the voting age. And back in August of this year, a Talbot Mills poll showed 66 per cent opposed, and only 28 per cent in favour.

It seems that those favouring change – largely those in political activism, journalism, and academia – are strongly at variance with wider concerns. The case for change simply hasn’t had the cut through yet, until it does, a change in the law is highly unlikely.

2: National and Act oppose lowering the voting age

The rightwing opposition parties are unequivocally against lowering the voting age. This means that when the Labour Government introduces legislation next year to lower the age to 16, it will fail. What’s more, it means that a future National-led government would be inclined to reverse any shift to a lower voting age.

Normally any significant changes to electoral law require some sort of cross-party consensus, and this just hasn’t yet been forged. Campaigners have focused more on judicial activism, which turns out to have achieved them a powerful win, but without actually convincing most of the political parties yesterday’s Supreme Court declaration becomes something of a moot win.

National and Act have the power to stymie any changes to the general election voting age because the Electoral Act is constitutionally entrenched, meaning a super-majority of 75 per cent is required to make changes in Parliament. Ninety MPs are required to vote in favour of such a change, which is not going to occur.

3: Labour Party caution

Prime Minister Jacinda Ardern has come out in favour of lowering the voting age to 16 years and has promised to introduce legislation in terms of general election voting next year, as the Government’s answer to the Supreme Court’s ruling. However, she has made the call safe in the knowledge that such legislation won’t be consequential, because it won’t be passed.

Cynics might see it as a smart move by Ardern. It ticks off a legal requirement to respond to the Supreme Court ruling, and keeps her onside with progressives who favour a reduced voting age, but at the same time it avoids actually changing the law and alienating the three-quarters of the public opposed to 16-year-olds voting. Quite simply, Labour can rely on National and Act to save them from achieving what they possibly don’t really want to win – an unpopular lowering of the vote.

The problem for Labour will be the question of the voting age for local government elections. This is now where attention is likely to shift. This is because the Local Government Act isn’t constitutionally entrenched, which means that only a simple majority in Parliament is needed to lower the voting age to 16. The Government can’t just rely on National and Act to block this change.

The pressure will therefore be on the Government to reform the Local Government Act immediately. Labour has no excuses not to do so and it will therefore be a real test of Ardern’s principles.

Pressure to reform the Local Government Act’s voting age has also been increased by the review that the Government itself commissioned. The recent Future of Local Government report also recommended a voting age of 16 years for local elections, making it more difficult for Labour not to progress this.

The argument of reformers is now that local elections could be a “trial” for a lower voting age. Or, put another way, by introducing a lower voting age in this less important level of government, it would be a good way for the public to get used to the idea, with the hope that it would lead the way to the public supporting a lower voting age for general elections too.

But is Labour too cautious to make this change? It’s likely to stymie this by trying to keep the voting age for both general and local elections bound up together. The Government might even kick for touch by arguing that it wants to hear back from the Independent Review of Electoral Law before making any decisions – who are not due to report until after next year’s election. This would effectively make the change too late to implement until much later elections.

The general convention – which Jacinda Ardern reiterated yesterday – is for the implementation of significant electoral law changes to only take place for the election after the next one. This would mean that even if the Electoral Law was changed in 2024 to allow 16-year-olds to vote, this wouldn’t occur until the 2029 general election.

4: The Appearance of politician self-interest

Much of the debate about the voting age is likely to be blocked due to apparent political self-interest. Quite simply, the age level for voting has a large impact on the support levels of the various political parties.

There is a general consensus that younger people vote in higher proportions for the parties of the left. This is why one of the Supreme Court judges, Stephen Kos, gave a dissenting opinion yesterday, saying that “Altering voter age is not a neutral political action”, and “Whichever direction it goes in is likely to benefit some parties disproportionately”.

This means that National and Act’s opposition to a voting age is partly driven by the desire to protect their own levels of support. Act leader David Seymour expressed this yesterday, saying: “We don’t want 120,000 more voters who pay no tax voting for lots more spending”.

Conversely, Labour and the Greens could be accused of wanting to lower the voting age for their own advantage. Stuff political editor Luke Malpass explains today that “most of the political upside would go to Labour or the Greens, meaning that a Labour or Labour/Greens Government could look pretty self-interested in making any such change. That’s because those younger voters tend to split 2:1 to the left (either Labour or the Greens)”.

Malpass calculates that lowering the voting age to 16 could result in 80,000 more votes (a 2.7 per cent increase), which “could result in an extra seat for the centre-left. In an MMP environment where elections can be close-run, this would amount to a small – but not insignificant – realignment of the electoral board in favour of the political left.”

Such motivations for lowering the voting age are likely to become more apparent in any developing public debate about reform. New Zealanders have been shown to use “fairness” as a clear criteria in approaching issues such as electoral reform, and so on this subject they might be very inclined to also regard the lowering of the voting age with suspicion – leaving reform to the distant future.

Further reading on the voting age

VOTING AGE
Thomas Coughlan (Herald): Change to local body voting age possible – even likely (paywalled)
Michael Neilson (Herald): Parliament to vote on lowering voting age from 18 to 16, could see ‘differential’ system for local and general elections
Luke Malpass (Stuff): Which parties would a voting age lowered to 16 likely favour in Parliament?
Richard Harman (Politik): Supreme Court v Parliament (paywalled)
Liam Hehir: The disappointing but not surprising Supreme Court decision (paywalled)
David Farrar: Hehir on the Supreme Court and the voting age
Anna Whyte (Stuff): Lowering voting age to 16 likely to fail in Parliament
River LIn (1News): Luxon calls on voting age to remain at 18
Brent Edwards (NBR): Opposition unimpressed with Supreme Court decision on voting age (paywalled)
RNZ: Voting age 16 law to be drafted requiring three quarters of MPs to pass – Ardern
Tess McClure (Guardian): Ardern promises bill to lower voting age to 16 in New Zealand after discrimination ruling
Michael Neilson (Herald): Parliament to consider lowering voting age to 16 after Supreme Court rules ‘inconsistent’ with Bill of Rights
RNZ: Supreme Court rules in favour of ‘Make It 16’ to lower voting age
Stuff: Door for voting age change open after backers score win in ‘uphill battle’
Will Trafford (Whakaata Māori): Voting age should be lowered to 16 – Supreme Court
Zarina Hewlett (Today FM): The voting age: Keep it 18 or make it 16?

Other items of interest and importance today

PARLIAMENT
Pattrick Smellie (BusinessDesk): Election 2023: a minor (party) flirtation (paywalled)
Thomas Coughlan (Herald): Christopher Luxon not ruling out NZ First coalition after Winston Peters rules out Labour
Jane Patterson (RNZ): Luxon not ruling out post-election deal with NZ First
Newshub: Christopher Luxon won’t rule out NZ First coalition after Winston Peters says no to current Labour Party
Tova O’Brien (Today FM): For the first time ever Winston Peters has chosen a side before election day
Mike Hosking (Newstalk ZB): Winston’s risky Labour call
Martyn Bradbury (Daily Blog): If ACT rules Winston out, Luxon and NZ First will be snookered
Phil Pennington (RNZ): The ‘big maybe’ over Māori seats in Parliament due to census undercount
Will Trafford (Whakaata Māori): Census undercount could have shortchanged Māori seats – Waititi
Jonah Franke (Stuff): By-election? What by-election? Voter indifference as battle for Hamilton West heats up

HATE SPEECH REFORMS
Chris Trotter (Interest): In spite of Labour’s back-down on ‘Hate Speech’, the debate looks set to rage on through election year
Arran Hunt (Heald): Will hate speech laws turn NZ into another Iran? (paywalled)
Martyn Bradbury (Daily Blog): How to save Labour from their Religious Hate Speech Law minefield
Anna Whyte (Stuff): Hate speech change: What it means and why it matters
Jamie Enosr (Newshub): Government’s hate speech change explained: How different is it to proposals, will it be unlawful to insult someone’s religion
David Harvey: Eroding Freedom of Expression

HOUSING
Seni Iasona (Newshub): Grant Robertson says 1000 fewer people in emergency housing shows Govt ‘making progress’ amid desperate plea from Rotorua Mayor Tania Tapsell
Michael Neilson (Herald): Government to make Healthy Homes extension announcement for Kāinga Ora and private landlords
1News: Govt’s possible healthy homes deadline extension ‘a slap in the face’
Giles Dexter (1News): Healthy Homes deadline extension under ‘active consideration’
Georgina Campbell (Herald): Warning building boom could see homes built in ‘terrible places’
Susan Edmunds (Stuff): Farewell to home ownership: Interest rate hike forces borrowers to reconsider plans
Jonathan Killick (Stuff): Recap: Frustration, elation in the race for a rental
Greg Ninness (Interest): Median rent up $40 a week nationally in September year but almost flat in Auckland
RNZ: Iwi file Treaty claim over proposed Hamilton housing project

FOREIGN AFFAIRS
Katie Scotcher (RNZ): Volodymyr Zelensky invited to address New Zealand Parliament
RNZ: Defence Minister Peeni Henare to discuss funding weapons for Ukraine with Cabinet colleagues
Mei Heron (1News): What Peeni Henare likely discussed with Ukraine defence minister
Stefan Dimitrof (Whakaata Māori): Defence minister reaffirms New Zealand’s support of Ukraine
1News: Mahuta announces new sanctions against Putin’s daughters
Stephen Hoadley (Newsroom): Five summits reaffirm global cooperation
RNZ: Jacinda Ardern talked to Xi Jinping on human rights, Pacific development, Robertson says

ENVIRONMENT
Simon Wilson (Herald): National Party’s approach to climate-change policy is a massive failure for farmers (paywalled)
Rachael Kelly (Stuff): Climate Change Commission staff will meet with Groundswell NZ
Henry McMullan (1News): East Coast communities concerned about farmland sell-offs
Rod Oram (Newsroom): COP 27 ends with historic win and abysmal fail
RNZ: COP27 was ‘bitter, divisive, chaotic’, climate change expert says
Herald Editorial: Climate conference results a mixed blessing (paywalled)
Stefan Dimitrof (Whakaata Māori): Microplastics found in breast milk highlights importance of Global Plastics Treaty
David Williams (Newsroom): Mackenzie protection deal disarmed
Hauraki Coromandel Post: National MP Scott Simpson attends UN Climate Change Conference

HEALTH, DISABILITY
Emma Vitz and Shanti Mathias (Spinoff): The rising costs of outsourced healthcare
Rob Campbell (BusinessDesk): We need to centralise health to localise it (paywalled)
Rachel Thomas (Stuff): Health minister asks for patience as GPs demand changes to ‘soul-destroying’ conditions
1News: GPs say practice wait times becoming ‘dangerous’
Kristie Boland (Stuff): UK nurses turn to hospo jobs after waiting 8 months for NZ work approval
Louise Ternouth (RNZ): Disability sector facing critical staffing crisis and calling for more carers
Damien Venuto (Herald): The Front Page: Covid cases are rising – will Govt intervene or are we on our own?
RNZ: Covid-19 update: 24,068 new cases, 40 deaths and 344 in hospital reported in past week
Chris Ford (RNZ): Opinion: Let’s go no further with voluntary euthanasia
Zoe Madden-Smith (Re: News): New over-the-phone abortion service getting 100 bookings a week

BUSINESS, EMPLOYMENT
Kaysha Brownlie (Newshub): National Party reiterates plans to repeal Fair Pay Agreement law
Jane Nixon (1News): Bill to address supermarket duopoly set to pass in 2023
Tom Pullar-Strecker (Stuff): Tiwai Point aluminium smelter set to stay open ‘long term’, says broker
Ian Llewellyn (BusinessDesk): Tiwai power deal likely to be settled (paywalled)
Jonathan Milne (Newsroom): Give mountain a chance to recover, say Ruapehu iwi
Emma Hatton (Newsroom): Small retailers ditch insurance over rising costs

EDUCATION
Lee Kenny (Stuff): Eight $200k-a-year executives wanted at Te Pūkenga, despite need to cut $35m from budget
Jimmy Ellingham (RNZ): Massey vice-chancellor’s 18% pay jump not a pay increase, Public Services Commission says
Jenna Lynch (Newshub): Christopher Luxon takes aim at parents, ‘culture of excuses’ for truancy crisis, but Jacinda Ardern fires back

RMA, Infrastructure
David Parker (Herald): Making resource management faster, cheaper and better (paywalled)
Fran O’Sullivan (Herald): Infrastructure: Three Waters ‘the right thing to do’ – Grant Robertson (paywalled)
Nicholas Boyack (Stuff): Trentham Racecourse on track for 850 new homes
Graham Skellern (Herald): Infrastructure: Record pipeline of road and rail projects, Michael Wood says Auckland harbour crossing critical (paywalled)
Simon Bridges (Herald): Infrastructure: 5 ways to fix Auckland’s transport problems (paywalled)
Reuben Tucker (Herald): Infrastructure: A Lodestone for transformation (paywalled)

TRANSPORT
Anne Gibson (Herald): Experts ponder: is this what might be planned for $15b second Waitematā Harbour crossing? (paywalled)
Oliver Lewis (BusinessDesk): Michael Wood responds to Christchurch transport request (paywalled)
John MacDonald (Newstalk ZB): End of the road for Waka Kotahi ads?
1News: 6 road deaths over weekend could have been prevented – police

JUSTICE, CORRECTIONS, POLICE
Dave Armstrong (Stuff): A policy that hits youth offenders where it hurts
Duncan Garner (NBR): If law is not working, why can’t we get tough? (paywalled)
Sam Sherwood (Herald): Police officers failed to declare conflicts of interest while involved in international procurement process
David Farrar: Some dismal stats on prisoner literacy and numeracy programmes

BLACK FERNS TO BE CELEBRATED AT PARLIAMENT
Mana Wikaire-Lewis (Whakaata Māori): Official celebrations for Black Ferns on Parliament’s lawn in December
RNZ: Black Ferns World Cup win to be celebrated in Parliament
1News: World Cup-winning Black Ferns to be celebrated at Parliament

LOCAL GOVERNMENT
Todd Niall (Stuff): Is Auckland Council’s next budget really the fiscal apocalypse?
RNZ: Tāmati Coffey voted off Rotorua Trust

OTHER
Phil Pennington (RNZ): Identity Check online system pilot launched despite gaps over privacy, rights
Nick Truebridge (Newshub): Charity says hungry and struggling elderly New Zealanders account for 80 pct of calls
Herewini Waikato (Whakaata Māori): National iwi hui wants funding and resources to take care of whānau
Sharon Brettkelly (RNZ): NZ’s prehistoric past at risk of crumbling away
Gavin Ellis: NZME reaches a milestone some thought impossible
Gerhard Uys (Stuff): Pig farmers concerned banks won’t finance expensive upgrades for new animal welfare standards

Political Roundup: No confidence in dire local govt elections

The “No Confidence” vote in local body elections could be as high as 60 per cent by the end of this week. That’s essentially what it is when only 40 per cent of the public choose to vote, which is what is happening at the moment. In fact, voter turnout is trending lower, meaning New Zealand could be headed for a record low voter turnout (and hence a record no confidence vote in politicians).

The reality is clear: the vast majority of the public are not inspired by what’s on offer from candidates across the country and voters aren’t convinced that voting in local elections really matters.

Voter turnout was supposed to increase in 2022

This year’s extremely low voter turnout is occurring despite circumstances that should be driving increased public involvement. Firstly, there are a large number of very competitive mayoral elections taking place – in which the likely outcome is far from decided. In Auckland, Wellington, Christchurch, Dunedin, and Invercargill, for instance, it’s not clear who will win, and a number of new mayors are likely to be elected. This situation normally drives up turnout.

In addition, there are a number of factors that many commentators and authorities believed would drive up participation:

• The new Māori wards in many elections were supposed to provide for better representation of an historically under-represented demographic
• There is increased media coverage of local elections and, in particular, a plethora of voices explaining the need for people to vote
• The Three Waters reforms have provided a contentious public issue for voters to vote for or against as candidates take a pro or anti Three Waters stance
• A much more demographically diverse range of candidates – women, Māori, young people, and so forth – standing was said to help boost turnout amongst sections of the public put off by so-called “pale, stale, and male” incumbents
• Local government authorities have produced huge publicity and advertising campaigns, normally incorporating te reo Māori and an emphasis on diversity, to get people enthused about democracy.

None of these factors appear to have had a significant impact in lifting voting so far. Perhaps some of these dynamics have actually had a counterintuitively negative impact.

Could it be that the low voter turnout reflects contentment?

Of course, there are plenty of explanations for the public choosing not to vote. Some politicians and commentators have been attempting to put a more positive spin on the declining voter turnout. Much of this looks like wishful thinking. They say the declining voter turnout simply reflects public satisfaction with the politicians and their local authorities. Voters are content to just let the politicians continue doing their good work without the scrutiny and evaluation of voting.

But there is absolutely no evidence to support the view that the low voter turnout reflects contentment. In fact, there is strong evidence throughout the country that the public’s unhappiness with councils has reached an all-time high.

Surveys carried out by local authorities show that dissatisfaction with individual councils is very strong this year. For example, in Wellington, when the public were asked this year about satisfaction with council decision-making, the number of those who are “satisfied” dropped to a new low of only 12 per cent, while those who said they are “dissatisfied” jumped to 52 per cent. Similarly, those who believe that the Council makes decisions that are in best interests of the city has plummeted from 50 per cent to just 17 per cent this year.

It seems that throughout the country there is a similar level of anger and disenchantment with local politicians which should dispel any rosy idea that lower voter turnout is in some way positive.

Those pushing the “contentment theory” of low voter turnout also have to grapple with the fact that non-voters are disproportionately made up of the poor and marginalised of society. Evidence shows it’s the wealthier demographics that vote in much larger numbers than others.

For example, suburb comparisons in the 2019 Rotorua Lakes Council elections showed that the higher turnouts were from residents from wealthier housing locations, and vice versa.

Overall in Rotorua the turnout was 45 per cent, but for the affluent suburbs the turnout rates were much higher, and for the lower socio-economic areas the voting rates were about a third of this.

For example, in Rotorua’s flash suburb of Springfield, 59 per cent voted, in leafy Lynmore it was 57 per cent, and wealthy Kaharoa had a turnout rate of 56 per cent.

However, the poorer suburbs had abysmal turnout rates. In disadvantaged Western Heights it was only 27 per cent, and in the poorest area of Fordlands voter turnout was an incredible 18 per cent.

This pattern was borne out by a 2015 Auckland Council study that showed significant variation in voter turnout according to socioeconomic status.

It goes to show just how much participation in elections is a function of socio-economics. And so, a discussion of voter turnout must involve an awareness that elections in New Zealand are primarily determined by wealth.

It seems that local government isn’t working for most people. And this is especially the case for the poor. Increasingly there is a feeling that local government – much like central government – has become dysfunctional and captured by vested interests and elites.

All around the world voter turnout has generally been on the decline over the last few decades, driven by waning trust in authorities and politics. And this is evident in the rise of populist nationalism and the increased peddling of conspiracy theories.

A 17 per cent turnout in amongst poorer communities speaks to something rotten in our democratic processes. Fixing this won’t involve superficial and mechanical changes to voting systems or just more public education. A much bigger examination of the failings of our political system is necessary, and this needs to include looking at wider societal problems.

Without big change, our elections will decline further in legitimacy. As today’s New Zealand Herald points out, the Prime Minister is being “asked this week to speculate on how low the turnout threshold should be for local elections to be considered valid”. She won’t answer this. But someone is going to have to engage very quickly.

What is clear is that blaming voters for being uninspired by the candidates and the system of local government is not the answer. The public – and especially poorer New Zealanders – will just keep essentially voting “No confidence” in larger and larger numbers until it’s impossible for this message to be ignored or misunderstood.

Further reading on Local Government Elections

Bernard Orsman (Herald): Local body elections: Christchurch leads voting turnout among the big cities; Wellington last
Herald Editorial: Who’s to blame when local elections fail to excite voters? (paywalled)
Brad Olsen (Infometrics): Chart of the month: Time for some local democracy
Adam Burns (RNZ): Local body elections: Late voters urged to cast special votes
Bernard Orsman (Herald): Local body elections: Christchurch leads voting turnout among the big cities; Wellington last
Felix Desmarais (Local Democracy Reporting): Rotorua voter turnout steady but voters urged to ‘make their vote count’
The Facts: Only 21% of votes returned with 5 days left + exclusive new polling
Sinead Gill (Stuff): Lorde ‘told off’ after breaking electoral rule
David Farrar: The Labour loyalty pledge
Michael Sergel (Herald): Five issues dividing Auckland election candidates
1News: Ardern throws support behind Collins’ Auckland mayoralty campaign
Tim Murphy (Newsroom): Brown momentum vs Collins machine
No Right Turn: The “endorsement” you give when you want someone to lose
Dita De Boni (NBR): Wayne Brown’s good points flushed away by urinal comments (paywalled)
Katie Townshend (Stuff): Five things you may not realise your local council does
Stewart Sowman-Lund (Spinoff): Race briefing: Can the country’s youngest mayor make it two for two?

Other items of interest and importance today

JAMI-LEE ROSS CLEARED OF FRAUD CHARGES
Sam Hurley (Herald): Labour and National donations trial: Guilty and not guilty verdicts over political money
Catrin Owen (Stuff): Jami-Lee Ross not guilty in political donations case, businessmen found guilty
Tim Murphy (Newsroom): Ex MP Jami-Lee Ross cleared of fraud charges

GOVERNMENT AND PARLIAMENT
George Block (Herald): Former Cabinet minister Kris Faafoi to head new lobbying and PR firm (paywalled)
Catrin Owen (Stuff): Political donations case: Jami-Lee Ross, businessmen set to hear verdict
Stuff: Ex-minister Kris Faafoi is now a lobbyist and PR guy
Martyn Bradbury (Daily Blog): New Roy Morgan Poll – Labour Crash
Annabel Ahuriri-Driscoll (The Conversation): When is being Māori not enough? Why Māori politics are always personal
Tova O’Brien (Today FM): I can’t decide whether four year political terms are really what NZ needs
Duncan Garner (NBR): National has to offer tax cuts – but to who, how and when? (paywalled)
Waatea News: Davis apologises but ACT policy still racist
Matthew Hooton: Act’s terrible dilemma (paywalled)

OFFICIAL INFORMATION ACT
Gavin Ellis: Government media teams that breach the law
Elspeth McLean (ODT): Ombudsman ambitions killed off by lack of respect for OIA

ECONOMY, EMPLOYMENT AND INEQUALITY
Thomas Coughlan (Herald): Covid bloodbath expected as Government opens books today
Richard Harman: Another shot into Labour’s re-election chances (paywalled)
RNZ: Tax rates a factor for attracting candidates for top jobs, Luxon says
Brooke van Velden (Herald): What Liz Truss-led economic turmoil in UK can teach NZ (paywalled)
Robert MacCulloch: National and Labour economic policy summed up in a few lines
Tim Hunter (NBR): Council calls in PwC to review Eke Panuku deals (paywalled)

HOUSING
Sam Olley (RNZ): Emergency housing: Government warned of human rights risks years ago, documents reveal
David Farrar: A 421 day waiting list for a state house for the most needy
Dileepa Fonseka (Stuff): Why I’d be happy to see more ghost homes
RNZ: Housing market still firmly in retreat – CoreLogic
Ireland Hendry-Tennent (Newshub): Timing the market: Is now the best time to buy a house or should you wait for prices to drop further? An expert weighs in
Anne Gibson (Herald): ‘One of worst times for NZ house values’: New CoreLogic data shows falls continue

HEALTH
Alexa Cook (Newshub): Government increases GP funding, but sector worries it won’t fix crippling doctor shortage
Thomas Coughlan (Herald): Andrew Little announces GP pay bump and push to increase doctor numbers

INTERNATIONAL RELATIONS
David Fisher (Herald): New book on Five Eyes spying club explains NZ’s role in world’s largest intelligence network (paywalled)
Thomas Manch (Stuff): Solomon Islands foreign minister says his country will not ‘choose sides’
Thomas Coughlan (Herald): Solomon Islands unhappy with indirect China references in draft agreement with Washington, insists it would not ‘choose sides’
Jamie Ensor (Newshub): Nanaia Mahuta, Solomon Islands’ minister hold talks in ‘Rainbow Room’, despite island nation’s anti-same sex policies

MEDIA
Martyn Bradbury (Daily Blog): No one screams like media dependent on NZ on Air money
Brigitte Morten (NBR): Kiwis’ trust in institutions is being tested (paywalled)
Martyn Bradbury (Daily Blog): Today FM vs ZB – has the experiment worked?
ODT Editorial: TVNZ plumbs the depths

OTHER
David Bromell (Newsroom): How to argue in a free and open society
Thomas Cranmer: Three Waters and the vexed question of ownership
Martyn Bradbury (Daily Blog): Human Rights Commission tries to stuff online hate Genie back into bottle while Jacinda threatens Big Sister
Katarina Williams and Ripu Bhatia (Stuff): Teachers want ‘racist, discriminatory’ streaming system to be abolished in schools from 2030

Political Roundup: Te Pāti Māori and vested interests

Controversial Māori politician and president of Te Pāti Māori, John Tamihere, is in hot water over large financial donations relating to his 2019 Auckland Mayoral campaign and Te Pāti Māori’s 2020 election campaign. For him and his supporters, the allegations are “inherently racist”. For others, they illustrate that there are a lot of vested interests and wealth in te ao Māori, and this influence has the potential to have a strong impact on government decisions.

Is Te Pāti Māori a vehicle for vested interests?

Contrary to the myth that Te Pāti Māori only pursue the interests of working class or poor Māori, the party has historically often represented the interests of Māori middle class and business. In fact, this was why MP Hone Harawira split so spectacularly from the party in 2011 to set up his more working class orientated Mana Party. He complained that Te Pāti Māori had become dominated by the elite forces of te ao Māori. The two parties have now reunited, but the underlying tension that caused the split remains.

Similarly, there is a myth that, unlike other political parties, Te Pāti Māori doesn’t have access to wealthy backers. But records show that for many years the party, and its current president John Tamihere, have received large donations from wealthy individuals and organisations to use for campaigning.

Some of these large donations have been in the spotlight recently, and questions raised about their legitimacy. The latest is an investigation by Herald journalist Matt Nippert into donations given to Te Pāti Māori and Tamihere by two charitable organisations that Tamihere himself controls.

The Herald’s allegations about Tamihere’s charities

Matt Nippert’s story, published on the front page of the Herald this week, highlighted that charitable organisations are given tax-free status which saves them huge amounts of money, but this privilege is given on the basis that they do not side with political parties or give donations to election campaigns. In the case of Tamihere’s organisations, this rule appears to have been broken.

Here’s the opening paragraph from Nippert’s report: “Charities connected to Te Pāti Māori president John Tamihere are under investigation after financial reports showed nearly $500,000 in charitable funds had been used to bankroll his mayoral and general election campaigns.”

Tamihere was advanced $82,695 from the National Urban Māori Authority (NUMA) and $385,307 from Te Whānau o Waipareira Trust Group. Tamihere is the chief executive of both organisations, which endorsed his campaigns for office in 2019 and 2020.

Nippert’s article quotes Natasha Weight, the general manager of Charities Services, the agency that regulates tax-free charities, saying the rules are very clear: “a charity must not support or oppose a political party or candidate. This includes making a donation to a political party or a candidate’s election campaign, endorsing a party or candidate, or allowing a party or candidate to use a charity’s resources”.

As political finance researcher Max Rashbrooke wrote this week, “this looks terrible for Tamihere and the Trust. How can a registered charity be lending (and in effect donating, since it’s interest-free) their money to a political candidate? That’s not a ‘charitable’ purpose!”

The University of Auckland’s Peter Davis, a long-time Labour Party activist, also commented this week on Tamihere and Te Whānau o Waipareira: “He has always run the trust as a bit of a personal fiefdom and this has not been transparent until now. It was possible to forgive the early likely and anecdotal transgressions because the Trust was doing necessary work, but this crosses a line that no longer earns such sympathy.”

According to Nippert, Charities Services has issued a formal warning to Te Whānau o Waipareira, and is now engaged in negotiations over how to proceed with the alleged breach of the law. Te Whānau o Waipareira could be de-registered and Nippert says it could lose its lucrative tax-free status, which he calculates could cost it $16m.

Tamihere’s charities – which are clearly partisan – also contract to the Government to provide Whānau Ora services. When the donations first came to light last year, political commentator Shane Te Pou called for the minister of Whānau Ora to bring in the Auditor-General to investigate.

Nippert has also raised a discrepancy in the amounts that have been provided to Tamihere and Te Pāti Māori: “Tamihere declined to explain the difference between the sum recorded in accounts as being advanced by the charities for his political campaigns ($468,002), and the figure recorded as donations from them and him for the mayoral and general elections ($387,604).”

Racism allegations and defence

Tamihere and Te Whānau O Waipareira have reacted strongly to the Herald news story, accusing the newspaper of racism. Tamihere called it an example of the media demonising Māori, labelling it “a hit on the Māori”.

Talking about Nippert’s story, Tamihere says “This is a pogrom”, and likens the experience to that of the Jews facing persecution. And he says that Te Pāti Māori will no longer work with or write for the Herald, which raises important issues for media freedom and holding politicians to account.

In announcing the boycott, Tamihere states: “I will never write another word to try and educate ignorant pakeha about Māori matters for the New Zealand Herald. Nor will any Māori Party member ever be either interviewed or write anything for the New Zealand Herald or ZB radio – let’s leave it for what it is – ‘white man’s radio’, ‘racist radio’, and a racist rag… We will just go on our own platforms. We will talk on iwi radio, because we no longer need white men to define us”.

Tamihere also appealed to pakeha to intervene to curtail the questions being asked, saying Nippert’s story was fake news and a smear: “good Pākehā friends need to know what some of their kinfolk get up to and they just have to stop it and stop them. It’s not for Māori to correct things all the time and defend themselves all the time from malicious framing of us always in a negative way.”

The charity is also now crowdsourcing material from supporters in an attempt to prove that the journalist is racially motivated, using the social media hashtag #dobinaracistlikeMattNippert

The ethnicity element is centrally important to this issue, and is likely to have continued reverberations. For instance, in Parliament it caused one of the biggest political scuffles of the week, with Whanau Ora minister Kelvin Davis reacting to questions about the scandal by accusing Act MP Karen Chhour of having a “vanilla lens” and needing to get acquainted with the Māori world.

Davis’ comments were made in response to the following question in Parliament: “So does the Minister agree with John Tamihere when he says his charity and Oranga Tamariki are in a partnership and not a contract, and if Te Whānau o Waipareira is struck off the Charities Register, will the Minister guarantee that this partnership will end?”

Past issues with the Te Pāti Māori and vested interests

Matt Nippert’s revelations of the donations aren’t entirely new. His story is important because they highlight the investigations of Charities Services into the partisan activities of the two trusts.

Last year the Electoral Commission announced it was concerned about a breach of electoral law by Te Pāti Māori because they failed to declare the donations from the two charities during the election – as well as another $120,000 donation from the mysterious Aotearoa Te Kahu Limited Partnership.

The Electoral Commission made a complaint to the Police, and then the Serious Fraud Office (SFO) investigated. This week we learned that the SFO have closed their investigation and decided not to prosecute. The agency won’t provide further details of what they learned about the breach and why they’ve made their decision, simply stating: “The SFO has closed this matter and will not be taking any further steps”.

What is unknown is whether knowledge of the donations would have changed voters’ opinions of the party at the 2020 election. Te Pāti Māori kept the details secret, and then got back into Parliament when Rawiri Waititi captured the Waiariki electorate, beating Labour incumbent Tāmati Coffey by 836 votes.

Vested interests operate amongst all ethnicities

Te Pāti Māori and John Tamihere have been entirely dismissive of any questions about their financial backers and whether they are following the rules meant to make politics more transparent. This suggests they don’t take issues of corruption and vested interests seriously.

Although the party has only two MPs, there is a strong chance that Te Pāti Māori will hold the balance of power at the next election. Some in the Labour Party clearly see Te Pāti Māori as the Ardern Government’s lifeline to power at the next election should the National Party and Act win more votes than Labour and the Greens combined. Tamihere and his colleagues could have huge leverage over the next government.

When political figures are powerful they need to be held to account, regardless of race. Allegations of racism are extremely powerful, precisely because of the history of appalling discrimination towards Māori in this country. But such allegations should not be used to shield those in power from scrutiny. Te Pāti Māori is a product of our democratic political system and, as such, has to be held to account in the same way as other political parties, especially on an issue so important and fundamental as the funding of political campaigns.  Double standards can’t be accepted by anyone wanting clean and fair politics – especially those of us worried about vested interests looking for ways to leverage their political donations.

Political Roundup: Fighting for cleaner and fairer elections

From this week the public can provide input into the Government’s review of electoral laws – a process which is supposed to make elections cleaner and fairer. Hopefully, public submissions and pressure applied to both the electoral review experts and the Government will force the consideration and implementation of progressive reforms.

The Independent Electoral Review now has a website, a consultation paper, and a way to provide feedback on what needs to change. To have your say, go to: https://electoralreview.govt.nz

Pressure for reforms vs complacency

The independent review is part of a wider agenda by the Labour Government to reform electoral rules. Labour is under great pressure to clean up elections and make them fairer. This is particularly the case with regard to political finance – the ways in which politicians and parties raise money and spend it on campaigning.

We’ve had many years of financial scandals involving all the parties in Parliament, and many outside as well. The major parties are the most vulnerable to allegations of corruption and a lack of integrity in how they fundraise.

Representatives of Labour and National have been in the dock for the last few months at Auckland’s High Court, having to defend how parties and individuals fundraise from the wealthy. Many of the key individuals still have name suppression, but there’s been a lot of detail to show that massive change is needed to clean up our electoral process.

This also comes after the recent NZ First Foundation High Court trial, which the Serious Fraud Office failed to get a conviction on but is now appealing. That court case showed the extent to which the current system has serious loopholes that prevent adequate regulation of political donations. It also illustrated the danger of just assuming our current system works when, in fact, large amounts of money seem to shift between wealthy individuals and parties without detection.

In this country we have a serious problem with complacency in politics – resting on our supposed laurels of being the least corrupt country on earth, and pretending the wealthy don’t have an undue influence on decision-making.

A “scattergun” approach to reform

The label of “tinkering” has been applied by critics to the Government’s political donations reform processes, due to Labour’s apparent lack of appetite for thorough reform.

It’s also a major problem that the reform process designed by Labour has been rather messy, opaque and not well-thought-out. Much of the design was down to the former Minister of Justice Kris Faafoi, who clearly didn’t have much enthusiasm for his portfolio and the necessary reforms.

The jury is still out on whether his replacement, Kiritapu Allan, might be more enthusiastic, transparent and competent. So far not much has changed, and Labour is still refusing to release its own submission to the Ministry of Justice about how it wants electoral laws changed.

The latest phase of Labour’s electoral reform is particularly scattergun. The Government announced an “Independent Review Panel” in May, and gave it some almost-random areas of electoral law to consider. It also directed the panel not to look at various parts of the electoral process. This scattergun approach, in which it looks at some parts of elections and democracy and not others, has made the process rather constrained.

The main issues the panel are looking at, and now consulting on, are: whether to lower the voting age, if a four-year Parliamentary term should be introduced, if the 5% MMP threshold should be lowered, and whether party donation regulations should be reformed. Other aspects of electoral law are also being considered, but much of this will remain either uncontentious or obscure.

The hope is that the review panel will take a keen interest in political finance, and come up with stronger rules than we currently have, to make the system of elections fairer and the democratic process safer from the undue influence of vested interests.

But this will depend on public pressure. Looking at the consultation document, and the questions that the panel want the public to focus on, many of the most important political finance issues have been sidelined.

For example, “cash for access” fundraising isn’t being examined. This has been one of the biggest areas of concern for the public in recent years. Under Prime Minister John Key, the last National Government ran “Cabinet clubs” in which wealthy businesspeople could pay large sums of money to attend networking meetings with ministers.

This has continued under Labour, with Prime Minister Jacinda Ardern and her ministers charging for access to meetings where they brief businesspeople on their reform programme and get to hear the concerns and priorities of wealthy individuals. Despite pressure for the electoral review panel to investigate this, it appears to be off the table so far, as is scrutiny of other political finance issues that might be unwelcome to the parties in Parliament. Note, for example, that the use of Labour’s fundraising art auctions – at the centre of the recent High Court trial – has also been left off the table by the independent panel.

Will the politicians accept the independent review’s recommendations?

The last time a similar review of elections was held – by the Electoral Commission in 2012 – the then National Government threw the recommendations in the bin. Labour accused National as acting out of self-interest. The boot is now on the other foot, and Labour is emulating National in not committing itself to implementing the recommendations of the review.

This is always the danger of this type of exercise. When the panel provides its reform proposals – just after next year’s election – the Government is likely to pick and choose what it wants to implement. Self-interest will likely be the leading criteria for whatever parties are in power.

As the NBR’s political editor Brent Edwards writes today, “the political parties, as always, will have an influential role in implementing – or not – the recommendations which emerge from the review.” He asks: “once the review reports back will the politicians listen? Or will they, as National did in 2012, quietly shelve the report?”

A Royal Commission would be better

The current reviews and reform agenda are too ill-thought-through, scattergun, and compromised. The danger, however, is that the politicians will be able to pretend that the current review is sufficient, therefore fending off public demands for something more thorough and transformational.

There are so many different areas of our democracy that need more than the “once over lightly” approach we are currently seeing. In the end, we need to raise our ambitions for democratic reform, and to fight for a Royal Commission of inquiry into how to make our democracy cleaner and fairer.

Eventually, a more serious reform effort will surely be demanded by the public. Democracy deserves it.

Other items of interest and importance today

MONARCHY
Chris Trotter (Daily Blog): Two kings, one country
Thomas Coughlan (Herald): Countdown as republic inches closer (paywalled)
Richard Shaw (The Conversation): God save the King: why the monarchy is safe in Aotearoa New Zealand – for now
Ben Thomas (Stuff): The paradox of powerlessness at the epicentre of the sovereign
Karl du Fresne: Why we should remain a constitutional monarchy, even with Charles on the throne
Simon Bridges (Herald): We should hold off on talks of republicanism (paywalled)
Chris Laidlaw (Stuff): King Charles: a man ahead of his time?
Mark Quinlivan (Newshub): James Shaw ‘absolutely’ supports Marama Davidson’s comments about monarchy’s colonialist legacy during Queen Elizabeth tributes
Luke Kirkness (Herald): Public holiday to mark Queen Elizabeth II’s death wrong move for NZ (paywalled)

GOVERNMENT AND PARLIAMENT
Political poll (Herald): National in government as Labour and Jacinda Ardern tumble
Taxpayers’ Union: Curia Poll: September 2022
Hawkes Bay Today: Ex-staffer alleges he quit after ‘public scolding’ from Hawke’s Bay MP Anna Lorck
Bridie Witton (Stuff): Fresh bullying allegations against Labour MP Anna Lorck. MP says she’s working with a leadership coach
RNZ: Labour MP Anna Lorck in leadership training after bullying accusations
Jo Moir (Newsroom): Labour’s campaign will need to look different come 2023
Brent Edwards (NBR): Important debate on the electoral system should be the focus (paywalled)
David Farrar: Audrey rates Labour’s Maori caucus

LOCAL GOVERNMENT, THREE WATERS, AND ELECTIONS
Marc Daalder (Newsroom): A three-way race to decide Wellington’s future
Toby Manhire (Spinoff): Nick Smith is engineering a political comeback
Shane Te Pou (Herald): The difference between Efeso Collins and Wayne Brown (paywalled)
Bernard Orsman (Herald): Auckland mayoralty: Wayne Brown on slashing council salaries and speeding up bus journeys (paywalled)
Cherie Sivignon (Stuff): Police to investigate complaint over Tasman mayor Tim King’s donations
Eric Crampton (Newsroom): New Three Waters entities: Bad debt and a bad precedent
Gavin Beattie (Stuff): Local body elections: Making the most of your STV vote
Lucy Xia (RNZ): ‘Do people not want me in the picture?’: More candidates’ signs vandalised
John Williamson (Herald): Signs that roadside electorate hoardings may need to go

ECONOMY, EMPLOYMENT AND INEQUALITY
Melanie Carroll (Stuff): Recession averted: NZ economy rebounds in June quarter, GDP up 1.7%
RNZ: GDP rises 1.7 percent, new figures show
RNZ: Grant Robertson strikes optimistic note at business breakfast, ‘ensuring path back to surplus’
Rob Stock (Stuff): Supermarket duopoly cries foul at Costco’s five-year ‘holiday’ from Government’s supermarket competition regime
Rebecca Macfie (Newsroom): WorkSafe moves on courier company over health concerns
Brianna Mcilraith (Stuff): The roles with the fastest-growing salaries in NZ this year
Herald Editorial: Food prices increase shock is hopefully at the peak (paywalled)
Brianna Mcilraith (Stuff): The Māori influencers helping people navigate the financial world

INTERNATIONAL RELATIONS
Jamie Ensor (Newshub): New Zealand to participate in ministerial meeting of new group formed to counter China’s Pacific moves
Thomas Manch (Stuff): Five Eyes spy meeting taking place at Queenstown resort
Kurt Bayer and Claire Trevett (Herald): Queenstown, New Zealand hosts Five Eyes network gathering amid high secrecy and security

TE REO MĀORI
Graham Adams (The Platform): Are Pakeha really the bad guys in the demise of te reo?
Ripu Bhatia (Stuff): ‘Struggle’ to reach 1 million Māori language speakers by 2040, says commissioner
Glenn McConnell (Stuff): Reo radicals welcomed to Parliament, 50 years later
Bronte Metekingi and Katarina Williams (Stuff): Kōhanga reo at 40: The pioneering ‘language nest’ that helped te reo thrive

KEN DOUGLAS
John Minto (Daily Blog): Ken Douglas + the CTUs weakest moment – not a single fighting bone in his body when it was needed the most
RNZ: ‘He was somebody extraordinary’ – Tributes flow for union leader Ken Douglas
Michael Neilson (Herald): Ken Douglas, ‘giant’ trade union leader, dies – remembered for standing up for workers’ rights
Richard Harman: A working class man (paywalled)

HOUSING
Dan Sheridan (Stuff): Government set to tackle Tauranga’s housing shortage
Benn Bathgate (Stuff): Rotorua Mayor posits ‘end to emergency housing in Rotorua’ after Ministerial meet
Tony Alexander (One Roof): Blink and you miss it – the housing market is at a turning point

OTHER
Bridie Witton (Stuff): Schools hiring untrained teachers as Government battles to avoid education ‘crisis’
Glenn McConnell (Stuff): Racism is a cause of ethnic health gaps
Maiki Sherman (1News): Thousands of prisoners denied visits due to Corrections’ Covid policy
RNZ: ‘Potentially a billion dollars’ to clean up Tiwai Point
Charlie Mitchell (Stuff): Fonterra restructure law risks pushing up emissions and diminishing freshwater quality, environment commissioner warns
Brook Sabin (Stuff): The Government has quietly made one Covid rule ‘long term’ — it’s a complete waste of time
Ellen Thompson (Herald): TVNZ at Human Rights Review Tribunal for failing to provide sign language interpreters
Madeleine Chapman (Spinoff): How much money would you give up to not have women on your board?

Political Roundup: Time to take political donations law seriously

There is no corruption in New Zealand. At least that’s what authorities want the public to believe. For decades now our system of political finance regulation has been portrayed as highly rigorous, ensuring our politicians cannot be bought.

Unfortunately, that’s just not true. Although politicians and officials have claimed tight rules around transparency of large donations prevent the selling of policy by politicians, it’s really just resulted in a false sense of security.

Scholars of political finance such as myself have been unconvinced that the system works. As I’ve pointed out, often donation loopholes exist but are undiscovered by authorities. In this regard, we’ve ended up with a worst-case scenario in which the rules to prevent corruption are ineffective, yet the public is encouraged to have illusions in the rules working.

The New Zealand First Foundation trial has exposed a giant loophole

Thankfully, in 2022 we now have two landmark High Court trials proving that our laws are an ass and need significant reform.

The first trial, involving large donations intended for the New Zealand First party, showed how donation disclosure rules were easily avoided by having a system set up where cheques are deposited into a bank account of a separate legal entity called the New Zealand First Foundation. In this case, the judge ruled that these large gifts – about $750,000 in total – did not qualify as “political donations” under the Electoral Act. Therefore, the donors weren’t disclosed, and although the Serious Fraud Office viewed this as a violation under the Crimes Act, the judge acquitted the defendants.

The public doesn’t know how much this technicality has been used by other political parties to evade disclosing their links to wealthy donors. This particular trial only came about due to a whistleblower inside New Zealand First. Otherwise, authorities had no idea about the donations and the use of the dodgy fundraising mechanism.

The Government is now proposing that the loophole can be easily fixed by adding two small amendments to the current Electoral Amendment Bill, which is currently being considered by select committee, and is intended to be passed into law by the end of the year. Effectively the Minister of Justice, Kiri Allen, is proposing to make an “amendment to an amendment”, which she says will be “urgent” and “quite succinct”.

Allan states that two changes are necessary – the creation of a new more expansive definition of what a “party donation” is, and making it a crime for those receiving party donations not to inform the party secretary who is responsible for disclosing large donations.

The problem, of course, is that this is piggybacking on an existing piece of legislation going through Parliament that is designed to deal with very different problems with the Electoral Act. And the changes being made in this existing amendment bill – particularly lowering threshold levels for disclosure of donations – are strongly opposed by the National and Act parties. This means the crucial closing of the “NZ First Foundation loophole” is being inserted into a contentious bill that won’t have cross-party consensus. So although all the parliamentary want to close the loophole, not all of them will be able to vote for it.

This is a muddled and dangerous way to carry out political donations reform. It would be much wiser to make the changes to the loophole in an entirely separate bill that isn’t muddied by partisan disagreement. While it might be convenient for the Government to piggyback the changes onto the existing bill, taking a shortcut on such a crucial and complicated loophole might actually cause more problems.

As Prime Minister Jacinda Ardern correctly said last week, there is a risk that by rushing the loophole fix through quickly there might be unintended consequences. Hence, this appears to simply be another case where the Government would be wise to heed the aphorism of: “legislate in haste, repent in leisure”.

The Labour and National donations trial is exposing more loopholes

A second trial, currently taking place in the Auckland High Court, concerns large donations to the Labour and National parties that were also hidden. We are hearing that, as with the NZ First trial, these large donations were easily disguised under the current law and were undisclosed.

As with the NZ First Foundation, the prosecution is arguing that people inside the Labour and National parties helped manipulate the rules to keep large donations secret from the public. We now know one wealthy individual is accused of giving both Labour and National very large donations, with the SFO alleging these were broken down into smaller amounts given by various “sham donors” so that they wouldn’t be disclosed to the public. The prosecution alleges that Labour and National MPs had lobbied for the wealthy donor to receive a royal honour and this was the motivation for hiding the donor’s identity from the public.

Also in common with the NZ First trial, the dodgy donations to both Labour and National only came to light via whistleblowers. In National’s case, it was due to an unusual meltdown in the usually tightly-controlled party, when MP Jami-Lee Ross fell out with leader Simon Bridges. It then turned out that the same donor had made large donations to Labour in secret.

In the case of the Labour and National donations, the loophole is simply that our donations regime is based on a “high trust model” in which authorities expect parties and donors to follow the rules. There is no policing of these rules as no authority is charged or resourced to monitor what is happening. Instead, the public only learns about dodgy donations when there is a whistleblower. One of the basic foundations of our democracy, that political power isn’t for sale, should not have to rely on the development of a guilty conscience or a desire for revenge inside a political party.

Governments continue to play catchup with piecemeal and poor reform

Governments often regard the reform of political finance as simplistic when in reality it’s always much more complicated than they expect. Furthermore, wealthy donors and party fundraisers will always try to find ways to get around the rules. Academic scholars of this regulation compare the money given to politicians by the wealthy to underground spring water trying to get to the surface – we can try to block secret money from getting through, but there is a strong hydraulic nature that pushes it through, and once authorities dam up one outlet, the water finds its way up through another leak. The problem should not be underestimated.

Hence there is no place for complacency about money and politics. And yet that’s been the official setting for many years. And authorities often come up with quick fixes to try and stem the latest discovered loophole. But inevitably there are then unintended consequences arising from those simplistic fixes, sometimes making matters worse or driving the political money through a different loophole.

The ultimate example of this was the Helen Clark Labour Government’s Electoral Finance Act 2008, which caused more problems than it sought to fix. Labour themselves voted to repeal the hated legislation, which had been rushed into power without proper scrutiny or care.

Governments continue to play catchup with political finance reform, and are obviously not motivated to have a proper investigation into how to run the system of money and politics – it might threaten their own interests. Working groups are put together, normally without proper scope to examine the problems, and fixes are inevitably put forward that avoid some of the big problems and the public is yet again assuaged that there is no corruption in New Zealand.

Government using a self-serving reform process

There’s also the problem that fixes are often also used to either improve the financial position of the parties in power, or to hurt opponents. Furthermore, reform can sometimes involve a cartel of parties in Parliament who increase their own financial advantage with new rules that also seek to disadvantage fledgling or outside parties trying to break into Parliament.

Self-interest is therefore the major flaw to watch for in the design of donations reform. Already, the National and Act parties have argued that Labour’s latest proposals to lower the threshold for disclosure of donations are designed to hurt opponents and favour the incumbents themselves. Of course, this argument probably also reflects the self-interest of the parties of the right.

Nonetheless, it’s never a good look in this area of reform for changes to donation rules to look like it’s being a partisan football game. This reduces public confidence in the changes, and also threatens to make them less enduring. When such laws are made on a partisan basis, and often without much consultation with the public or opponents it discourages consensus – which is highly desirable when working on the rules of democracy.

We need donations reform processes that are more removed from self-interested politicians. This is a good point made yesterday by an editorial in the Otago Daily Times which suggests a Royal Commission, and points to inadequacies in the Government’s plans for an independent panel to propose reform. Without a more rigorous and truly independent mechanism for donations reform, the newspaper warns that “we are left with piecemeal changes to the law designed to convince the populace that something is happening even if that something is not much.”

Nonetheless, the most pressing issue is that the Government needs to properly close the “NZ First Foundation loophole”. There now needs to be pressure applied on the Government so that they don’t carry this out in a way that makes the problem even worse.

The other risk is that in closing this one loophole, the Government gets to declare that the problems are mostly fixed, and the public might too easily believe that the problems identified in the current high court trial have also been dealt with.

There will be a temptation for the parties currently in the dock – Labour and National – to simply patch up the hole that the NZ First verdict has revealed, tweak a few donation thresholds and tick box forms and declare the problem fixed. Until a proper process is set up by a government that takes money in politics seriously, then we have no right to be complacent about corruption in this country.

Further reading on political donations reform and the high court trial

Thomas Manch (Stuff): The fight over political donations and what the Government plans to change
Andrea Vance (Stuff): Ministry of Justice forced to ask for $10m in extra funding for ‘rushed’ electoral law review
Tim Murphy (Newsroom): Political donations trial: Eavesdropping on a WeChat scheme
Catrin Owen (Stuff): Jami-Lee Ross’ ex-wife hopes for acquittal in donations trial for children’s sake
Amy Williams (RNZ): Andrew Little and Michael Wood to take stand in political donations trial
Catrin Owen (Stuff): Labour Party wanted to be ‘transparent’ after double up in donors found
Claire Trevett (Herald): Political donations: Justice Minister Kiri Allan – Govt will close NZ First Foundation loophole for election year
RNZ: Cabinet confirms ‘shadow entity’ loophole will be closed
Newstalk: Justice Minister: Closing electoral donations loophole a relatively simple fix

Other items of interest and importance today

COST OF LIVING PAYMENTS
Damien Venuto (Herald): How the cost-of-living payment became a complicated mess
Claire Trevett (Herald): Money doesn’t buy Labour happiness in cost-of-living payment pickle (paywalled)
Peter Dunne: Aspirations are all very well, but it’s getting it right that counts
Susan Edmunds (Stuff): Cost of Living payment made to 780,000 fewer people than expected
RNZ: Cost of living payments: Call for government to help low income earners on benefit
Ireland Hendry-Tennent (Newshub): Christopher Luxon says Government has ‘lost the plot’, lashes out over cost of living payment issues
RNZ: National urges investigation over foreign cost-of-living payments
Heather du Plessis-Allan (Newstalk): You can only really get angry at cost of living payments if you expected better
Herald: Editorial: Cost of living payment a blunt but effective tool (paywalled)
Katie Scotcher (RNZ): Government in dark over numbers getting cost of living payment overseas
Jem Traylen (BusinessDesk): Cost of living payments – IRD warned govt it’s not sure where people live (paywalled)
Susan Edmunds (Stuff): National: Government underestimating scale of payment errors
Sam Olley (RNZ): Cost of living payment: IRD staying mum on overseas recipient numbers
Brad Lewis (Today FM): Former revenue minister says Governments Cost of Living Payment scheme good idea, poorly executed
Melanie Carroll (Stuff): Cost of living payment will add temporary fuel to inflation: Economists
1News: How far can the cost of living support payment go each week?
Michael Neilson (Herald): Cost of living payment: Questions over ‘targeted’ nature with people overseas receiving money
Jean Edwards (RNZ): Expats, foreigners told they’re getting cost of living payment intended for struggling Kiwis
1News: Govt’s ‘duty’ to support Kiwis amid cost of living crisis – Ardern
Gordon Campbell: On why we should pay kiwis living abroad

ECONOMY, EMPLOYMENT AND INEQUALITY
Chris Trotter (Interest): Fifty wasted years
Melanie Carroll (Stuff): By the numbers: The billions of dollars that drive NZ’s economy
Katie Bradford (1News): Low unemployment a chance to reset job market
Tom Pullar-Strecker (Stuff): So far, Reserve Bank governor Adrian Orr deserves a second term
Ella Somers (BusinessDesk): Most pokies money comes from the most deprived (paywalled)
Lauren Pattemore (Stuff): Emergency food parcels numbers skyrocket since pandemic
Michael Reddell: Reviewing Covid monetary policy – Part 1
Melanie Carroll (Stuff): How rich are New Zealand’s supermarket owners?
Liam Dann (Herald): Why we won’t be celebrating record low unemployment (paywalled)
Jonathan Mitchell (NBR): Will the Government give motorists an election year sweetener? (paywalled)
Damien Venuto (Herald): The Kiwis being digitally excluded in a changing world
Dan Bidois (Stuff): Two things we should do to make everyone better off

PARLIAMENT, GOVERNMENT AND ELECTIONS
Branko Marcetic (Democracy Project): Who knew James Shaw had so many fans in the media?
Rachel Smalley (Today FM): Jacinda has chosen to step away when she is needed most
Dave Armstrong (Stuff): A guide to wrecking left-wing parties in NZ
Richard Harman: National goes to conference on back foot (paywalled)
Steven Cowan: Jacinda is John
Anne-Mette Holmgård Sundahl (The Conversation): Does Jacinda Ardern’s popularity really qualify as a cult of personality, as some critics claim?
David Farrar: Roy Morgan poll July 2022
Thomas Coughlan (Herald): Gerry Brownlee retiring from Ilam race next election, hints at Speaker
Critic: Aotearoa’s politicians if they were your flatmates

CO-GOVERNANCE AND THREE WATERS
Thomas Coughlan (Herald): Councils propose Three Waters fix without co-governance (paywalled)
Julian Ludbrook (BusinessDesk): Three Waters co-governance: more of the same or different? (paywalled)
Don Brash: One of the world’s most successful democracies at risk
Chris Trotter (Daily Blog): A Grand coalition for peace, unity and democracy
Lisa Tumahai (Herald): Ngāi Tahu final step to permanent representation on Environment Canterbury
Tracey Roxburgh (ODT): 3 Waters: Mayor lauds council over approach to submission
Will Trafford (Māori TV): We’ll roll back co-governance – National

HEALTH
Ireland Hendry-Tennent (Newshub): Christopher Luxon backtracks on promise to match health funding with inflation if elected despite repeated assurances
Tova O’Brien (Today FM): I’m not sure Shortland Street is the answer to our nursing shortage
Emma Russell and Rachel Maher (Herald): Healthcare crisis: North Shore Hospital near capacity, woman ‘left in own urine for 14 hours’
Louise Ternouth (RNZ): NZ healthcare workers feel sidelined as govt seeks recruits
Bridie Witton (Stuff): More financial support needed to keep nurses and doctors in New Zealand, industry leaders say
Tova O’Brien (Today FM): 166 skilled migrants want to come here, nine of them nurses… Slow clap Prime Minister
Stephen Forbes (Local Democracy Reporting): Govt plan to boost healthcare workforce is ‘light at the end of the Covid tunnel’
RNZ: Shortland Street, TVNZ nursing campaign funding to be kept secret
Jean Edwards (RNZ): Government warned against relying too heavily on overseas health workers to fill shortages
Jenny Ruth (BusinessDesk): Aged care sector to health minister Andrew Little: we’ve heard it all before (paywalled)
Anna Whyte (1News): Health crisis: New measures to attract overseas staff
Bridie Witton (Stuff): Cheat sheet: The plans hoped to ease the health workforce shortages
Luke Malpass (Stuff): Health Minister Andrew Little stands firm on DHB ‘crisis’ letter timing
David Farrar: ED waiting times at record lengths
Tony Farrell (Herald): Punched-in-the-face and stalked GPs are exhausted and overloaded (paywalled)
Rowan Quinn (RNZ): Hospitals’ winter illnesses spell long waits for heart and cancer surgeries
Samantha Murton (Herald): We can’t magic away the chronic GP shortage (paywalled)
Alex Spence (Herald): ‘Utterly overwhelmed’: Child psychiatrists plead for urgent action to fix mental health staffing crisis (paywalled)
Alex Spence (Herald): Great Minds: Mental health staffing crisis – Andrew Little promises ‘more boots on the ground’
Grady Connell (Today FM): ‘Definitely in a health crisis’ – says anonymous overworked nurse
Aden Miles Morunga (Local Democracy Reporting): Call to improve health inequities for Pasifika, Māori after fluoride order
Georgia O’Connor-Harding (Herald): GP shortage: Rainbow community struggles to find the right health care

INTERNATIONAL RELATIONS
Thomas Manch (Stuff): Beijing takes notice of more New Zealanders viewing China as a ‘threat’
Thomas Manch (Stuff): PM Jacinda Ardern urges China to oppose Russia’s invasion of Ukraine
Andrea Vance (Stuff): MPs warned Chinese Government could access TikTok data
Tess McClure (Guardian): New Zealand MPs warned not to use TikTok over fears China could access data
Richard Harman: Ardern backs off White House China statement (paywalled)
Glenn McConnell (Stuff): The excitment and unity seen in Apia is vital as the Pacific deals with multiple crises
Glenn McConnell (Stuff): Jacinda Ardern and politicians show united front on tour to Samoa
Giles Dexter (RNZ): Jacinda Ardern stresses unique nature of New Zealand-Samoa friendship
Sam Sachdeva (Newsroom): ‘Self-serving’ powers must tackle nuclear threat
Russell Palmer (RNZ): Chinese ambassador touts openness, regional ‘peace and stability’
Oliver Lewis (BusinessDesk): Jacinda Ardern on the complicated, important NZ-China relationship (paywalled)
RNZ: Media manager lands on Russia’s banned list after commenting on embassy prank

HOUSING
1News: Hundreds living in cars as winter chill bites
Dileepa Fonseka (Stuff): The meeting that shows why housing is broken and never gets fixed
Rob Stock (Stuff): Cry of protest from Auckland’s ‘kauri suburbs’
Tamsyn Parker (Herald): Nation of debt: Housing debt jumps 7pc – can we afford the rising cost of it? (paywalled)
RNZ: Decline in house prices gains more traction but crash not expected – CoreLogic
Tina Grumball (Herald): Calls to stop Christchurch housing intensification – ‘Build them where they are needed’
Rachel Moore (Stuff): Motel millions for emergency housing are ‘guaranteed’ Government cash, Hamilton motel leader says
Kate MacNamara (Herald): Affordable housing agency Kāinga Ora bids up Ferncliffe Farms price on inflated valuations (paywalled)
Kelvin Davidson (One Roof): What could harm house prices the most right now – job losses
Carmen Hall (Herald): Bay of Plenty developers say government policies continue to lock land for houses (paywalled)
Fiona Rotherham (NBR): House price falls likely only half-way through, economist says (paywalled)
Diana Clement (One Roof): House price recovery: When will it happen, which city will bounce back the fastest?
Tim Hunter (NBR): How banks fuel house price inflation (paywalled)
RNZ: Auckland council saving estimated $1m housing intensification consultation

LOCAL GOVERNMENT
1News: MPs’ views on multiple property-owners getting extra local votes
Simon Wilson (Herald): The mayoral hopefuls and the future of the port (paywalled)
Tom Hunt (Stuff): The good, the bad and the weird: Wellington council report cards in
Bernard Orsman (Herald): Efeso Collins confirmed as frontrunner in Auckland mayoral race (paywalled)
Chris Keall (Herald): Auckland mayoralty: Person behind rogue ‘Efeso Collins’ website revealed (paywalled)
Todd Niall (RNZ): Auckland mayoral candidate rubbishes claim he backs $785m cycle bridge
Stephen Forbes (Local Democracy Reporting): Former National MP Maurice Williamson seeks Auckland Council seat
Samantha Gee (RNZ): Former National MP Nick Smith eyes Nelson mayoralty
ODT: Editorial – Tripping over each other
Heather du Plessis-Allan (Newstalk): Māori ward legislation change is clever politics from Nanaia Mahuta
Kiri Gillespie (Herald): Tauranga City Council moves forward in key CBD co-ownership bid with Māori (paywalled)
Lianne Dalziel (Herald): One size does not fit all (paywalled)

JUSTICE, LAW AND ORDER
Damien Grant (Stuff): The fall of a disgraced lawyer in the age of #MeToo
Damien Venuto (Herald): Guns, rage and racism – Has NZ become an angry nation?
Dylan Asafo (Herald): Why we need to abolish prisons and honour te Tiriti o Waitangi (paywalled)
Dita De Boni (NBR): New Law Society head being investigated for ‘behaviour concerns’ (paywalled)
Andrea Vance (Stuff): Law Society launches review over concerns about ‘behaviour’
Michael Neilson (Herald): Reports of retail crime nearly double in 5 years – National’s claim of ‘soft’ approach rubbished by expert (paywalled)
Deena Coster (Stuff): Victims at risk as justice stalled due to ‘exorbitant’ court delays
Jarrod Gilbert (Herald): Evidenced-based policing gives science a seat at the table (paywalled)
Martyn Bradbury (Daily Blog): The ram raids are a symptom of a much deeper malaise

CLIMATE AND ENVIRONMENT
Jamie Mackay (Herald): Gloves off in climate fight over He Waka Eke Noa (paywalled)
Thomas Coughlan (Herald): Fuel tax cuts will increase emissions, but Government still plans to hit climate targets
Marc Daalder (Newsroom): Climate targets at risk if carbon market isn’t fixed
Will Trafford (Māori TV): Govt axes controversial forestry shake-up
Tina Morrison (Stuff): What’s good for the planet is good for business, survey finds
Jamie Gray (Herald): NZ corporates lag offshore peers reporting climate risk – PwC (paywalled)
Moana Ellis (Local Democracy Reporting): ‘We need to act’: NZ can’t slow down on climate action – Mahuta
Christine Rovoi (Stuff): Greenpeace urges alliance against ‘rush to open deep-sea mining’
David Williams (Newsroom): NZ on the cusp of a rivers revolution

TE REO
Waatea News: Name game distraction from Māori development
Karanama Ruru (Stuff): 35 years ago te reo Māori became an official language, but experts say its survival still isn’t guaranteed
Ashleigh McCaull (RNZ): Celebrating 35 years of te reo Māori as an official language, but the danger of losing it remains

COVID
Amelia Wade (Newshub): Greens, National, ACT, former Reserve Bank chairman call for major Covid-19 inquiry
Akula Sharma (Herald): Protest threat: More Freedom and Rights’ marches in August, Parliament plans unveiled
John Tamihere (Herald): This Covid hangover is not going away until we find something else as a scapegoat’
John Roughan (Herald): It feels like we have a national case of long-Covid (paywalled)
Jo Moir (Newsroom): Govt awaiting advice on isolation and test-to-work
Rachel Smalley (NBR): Prime Minister missing as face of our Covid response (paywalled)
Claire Trevett (Herald): Time for the Covid-19 review? The borders are open and Ashley Bloomfield has left, but the ‘what next’ question lingers (paywalled)
Jamie Morton (Herald): Omicron wave: Why NZ hasn’t seen a worst-case scenario (paywalled)

MEDIA AND COMMUNICATION
Duncan Grieve (Spinoff): Willie Jackson has big plans for the media – and social media, too
Siouxsie Wiles (Stuff): Disinformation campaigns a danger to us all
Marc Daalder (Newsroom): A new wave of anti-LGBT hate
Critic: Free speech debate looking for student voices

It’s shocking that the accused in the NZ First Foundation trial were declared “not guilty” in the High Court today. But it’s not actually surprising.

There was always a strong chance that the Serious Fraud Office (SFO) was not going to get a conviction over the machinations used to keep large donations to the New Zealand First party secret. The revelation of this scandal in 2020, and the trial over the last month, may well have proven that the Electoral Act was breached, but it was far from certain that the accused were guilty of what the authorities were charging them with.

This is because the SFO chose not to lay charges against the defendants, or other party officials and politicians, under the Electoral Act, but under the Crimes Act instead. Rather than arguing that the Electoral Act’s requirements that larger donations be declared to the Electoral Commission (and therefore made public), the SFO essentially argued in court that the accused, who were running the NZ First Foundation, had stolen the money and were guilty of theft.

As the accused were able to argue in their defence, there was no one complaining of theft – certainly not the New Zealand First party, nor the donors. The money had been given to help the party in their electioneering, and that’s how the money genuinely appeared to be spent.

The Serious Fraud Office has some explaining to do

The SFO now need to front up and be accountable for failing to get a conviction for what appears to be a very clear breach of the Electoral Act.

As I noted in an earlier column that questioned the SFO’s strategy, there appeared to be two reasons why charges were laid under the Crimes Act: “It seems likely that the maximum penalties that can be imposed under this act are deemed too low, and so the SFO have used the Crimes Act instead. This raises the question of why the maximum penalties under the Electoral Act are so low. Alternatively, the SFO’s decision to use the Crimes Act might have been because it was too difficult to prove that the Electoral Act has been breached.”

The latter now looks to be the most likely explanation. The SFO may have had trouble using the Electoral Act due to its severe limitations, especially because the accused were not party officials. The Act places responsibility for party donations with the Party Secretary, who was apparently unaware of the donations arrangement. The Foundation had been set up, after all, to keep the donations away from the formal organisation.

In fact, it was the Party President in 2020, Lester Gray, who seems to have been the whistleblower, resigning from the party over the donations arrangements and bringing them to the attention of the media. The SFO likely was hesitant to prosecute them or other officials who had little knowledge of the behaviour at the time it was happening.

The SFO could have gone after other politicians in the New Zealand First party, including leader Winston Peters, who had played a role in fundraising. However, there appeared to be no evidence that he had authorised the way the Electoral Act had been circumvented. The defence made much of the SFO’s failure to call Peters as a witness and “victim” of the alleged crime. The judgement makes it clear that very large donations ended up being used for the purposes both the donors and the party intended. That meant the accused walked free, but it is a damning indictment on our politics.

The Electoral Act needs a significant overhaul

The trial outcome demonstrates that the Electoral Act is full of holes, and that the public cannot have confidence that some large donations to politicians are ever declared. Essentially this is a case study in how you can drive a bus through the Electoral Act.

There needs to be a proper overhaul of electoral laws. Unfortunately, the minor reforms that the Government are proposing won’t address any of this. Even the Independent Panel that was recently set up to look into electoral matters have been pointed to look in a different direction. The Government needs to change the remit of that panel, or else establish something more rigorous like a Royal Commission.

The current Electoral Act appears to operate on a “high trust model”, akin to the Wage Subsidy Scheme under Covid, in which business was trusted to be honest with the $20bn of handouts. Similarly, politicians and their parties are expected to follow the rules, despite knowing there is really no substantial monitoring and enforcement of those rules.

And in fact, revelations of the large donations and the violation of the disclosure requirements only really come about when whistleblowers and the media do some digging. There has to be a better way.

At the moment the Electoral Commission is toothless in this regard. But even when the high-powered SFO spent years on this case it could not get a conviction – despite there being open admissions that the very basic purpose of the Electoral Act’s donation disclosure regime had been seriously violated.

Max Rashbrooke, who is researching the role of money in politics at Victoria University of Wellington, tweeted the following in response to the “not guilty” verdict: “So, in New Zealand now, you can take $750,000 in donations intended for a political party, declare none of it, and get off. Donors can split donations to hide them, and get off. Urgent reform needed. I’ll be writing to the Minister of Justice accordingly.”

The failure to hold politicians, party officials, party fundraisers and donors to account really does bring the whole system of money and politics into disrepute in New Zealand.

If now isn’t the time to demand a proper clean-up of the rules, institutions, and behaviour of politicians and their wealthy backers, then when will be?

Further reading on NZ First Foundation trial

Matthew Scott (Newsroom): Defendants found not guilty in New Zealand First donations trial
Sam Hurley (Herald): NZ First Foundation acquittals: Winston Peters lashes out at ‘spurious allegations’, SFO and media
Sam Hurley (Herald): NZ First Foundation case: Accused pair not guilty of donations fraud after court grants permanent suppression
RNZ: NZ First Foundation case: Men charged over handling of donations found not guilty
Catrin Owen (Stuff): Duo found not guilty in New Zealand First Foundation political donations case
No Right Turn: So its worse then

Other items of interest and importance today

COST OF LIVING AND INFLATION
Josie Pagani (Stuff): We’re being pickpocketed by arrogant corporates
Chris Trotter (Daily Blog): Fighting inflation – what would a democratic-socialist government do?
Shane Jones (Herald): Inflation runs amok while MPs chase their tails (paywalled)
Herald: Editorial: Greedflation and price-gouging – why we need to share the inflation pain (paywalled)
Tim Hunter (NBR): How banks fuel house price inflation (paywalled)

PARLIAMENT AND GOVERNMENT
Peter Dunne (Newsroom): It’s looking as if neither Labour nor National wants to win in 2023
John MacDonald (Herald): Don’t blame the Government for advertising spend-up
Graham Adams (The Platform): Ardern dodges questions on Mahuta’s conflicts in Three Waters
Talia Parker (Herald): Why Waiariki MP Rawiri Waititi wants ‘discriminatory’ electoral law changed (paywalled)
Martyn Bradbury (Daily Blog): Politically triggering: Cancelling Guy Williams, youth Parliament walk out & banning Taxpayers Union
Sharon Brettkelly (RNZ): Drama behind the scenes at the Film Commission
Phil Pennington (RNZ): Statistics experts fear law change may lead to unregulated data sharing
Rachel Maher (Herald): Taxpayers fund Dr Siouxsie Wiles documentary
ODT: Editorial – Labour’s polytechnic shambles

IMMIGRATION CHANGES
Matthew Hooton (Herald): The method in Labour’s migration makeover (paywalled)
Rachel Smalley (Today FM): Labour has once again gone down the ideology route
Rachel Smalley (NBR): Labour goes after the millionaires (paywalled)
Oscar Jackson (Today FM): Stuart Nash defends new investor visa program, calls National’s ‘broke’

LOCAL GOVERNMENT AND ELECTIONS
Stephen Forbes (Local Democracy Reporting): Do ‘stars’ make good politicians? Ex-All Black Keven Mealamu and the council elections
Moana Ellis (Stuff): Local government conference: ‘We’re ready for change’
The Platform: LGNZ’s Inclusive Campaigning Guidelines
Ben Goodale (Herald): Auckland mayoralty: Leo Molloy’s antics a lesson in why you should be careful what you don’t vote for (paywalled)

COVID
Jo Moir (Newsroom): Lack of Covid rules dividing team of five million
Katy Cox (RNZ): Covid-19 cases at border skyrocket after pre-departure testing scrapped
Dubby Henry (Herald): Ministry of Education recommends schools enforce masks in Term 3

INTERNATIONAL RELATIONS
Stefan Dimitrof (Māori TV): New Zealand not a ‘condescending coloniser’ – Jacinda Ardern
Biman Chand Prasad (Dev Policy Blog): Australia and New Zealand’s silence on democracy and human rights in the Pacific
Joanne Wallis, Anna Powles, and Solstice Middleby (The Conversation): Australia and New Zealand have a golden opportunity to build stronger ties in the Pacific – but will they take it?

ECONOMY AND EMPLOYMENT
Liz McDonald (Stuff): Survey shows businesses worry about economy, staff shortages
Guy Te Kiniwe Royal (NBR): Once were artists (paywalled)
Matteo Zhang and Louis Collins (RNZ): Youth MPs to focus on glaring wage gap

CLIMATE AND ENVIRONMENT
Marc Daalder (Newsroom): Does Labour have the guts to act on climate?
Richard Harman: Paying the price to curb climate change (paywalled)
Herald: Editorial: Climate change outlook – extreme heat with a chance of burning (paywalled)
Simon Bridges (NBR): As economic times change, watch the retreat of ESG (paywalled)

Political Roundup: Public submissions on political donation reform released

Is it ironic that the Government is reforming rules around secret political donations in a very secretive way? There has been overwhelming public demand for more openness about how politicians raise their money, but the Government and officials have been less than transparent and very restrictive over the whole submission process.

The public had a very limited opportunity to give feedback on the Government’s first proposals for political donation reform. The Ministry of Justice called for submissions over the Christmas New Year period, allowing an extremely short timeframe, with submissions closing on January 25. Critics might be forgiven for being cynical about how much public input the Government really wanted.

Further alarm bells have been ringing for those concerned about open government, due to the fact that the Ministry of Justice has been attempting to prevent the public submissions from being released to the public. The Ministry wanted to keep these for Cabinet ministers eyes only.

Battles to obtain public information

As an academic researcher of political finance I have been battling with the Ministry over many months to be provided with copies of the submissions. I first requested the files in early April, but have had various fobbing off communications from the Ministry and attempts to decline my Official Information Act request. One request was ignored because I had failed to cite the “Official Information Act” in my communications (but, no this isn’t a good enough reason).

After attempts to decline my request, and a complaint to the Ombudsman, I finally received the information this month.

Unfortunately some key submissions have been withheld, specifically submissions from three political parties. The Ministry of Justice’s general manager of civil and constitutional policy, Kathy Brightwell, informed me that “The political parties which the ministry received submissions from, provided these on a confidential basis. These parties may not have provided submissions if they knew they were going to be identified, so it would be within the public interest to withhold their submissions, as release of this would likely prejudice the supply of similar information”.

Journalist Andrea Vance has also been declined the public submissions, and yesterday she reported that “The Ministry of Justice struck a deal with political parties to keep secret their submissions on donation law reform.” She also reports the reaction of National’s Justice spokesperson Paul Goldsmith, who said it was “deeply shocking and ironic” that transparency reforms were being blighted by officials keeping submissions secret.

It is unclear which three political parties have asked the Ministry of Justice to keep their submissions secret. National has already publicly released their submission. And according to Andrea Vance, the Greens and Act are happy to publicly release their submissions. She also says that Labour didn’t provide a formal written submission – instead the party’s general secretary gave an oral representation to the Ministry, and it appears the records of that meeting are being withheld.

Until political parties’ consultations and submissions are released, it will continue to raise questions about the Government’s commitment to improve political transparency.

What the public submissions say

The Ministry of Justice received 276 submissions from the public about the Government’s proposed changes to political donation rules. It’s very clear that most submitters felt reform is urgently needed and the proposed reforms do not go far enough.

Below are some of the key themes of the submissions:

1) Almost unanimous support for lowering the threshold for disclosure. Currently, only donations over $15,000 have to be publicly declared. While there is strong support for the proposal to lower this to $1500, many advocate for an even lower threshold, with a significant number arguing for the limit to be $100 or $200.

2) The majority of submissions support an absolute cap on how much an individual can donate to a political party each year. Many suggest that the $1500 disclosure limit proposed by the Government should actually be the cap. Greenpeace recommended a $10,000 per year cap (The Green Party has introduced legislation to cap donations at $30,000).

3) Many submitters explicitly mentioned concern over corporate donations. A significant number advocated that only individuals should be able to donate – i.e. businesses, trusts, unions shouldn’t be allowed to donate to political parties.

4) There was strong support for increasing frequency of reporting. The submissions agree that the current annual reporting of donations is insufficient, with quarterly or monthly reports recommended, especially during election years and campaign periods.

5) Opposition to the Government’s proposal to remove the ten day disclosure requirement for donations greater than $30,000 was almost unanimous, with most viewing that such a significant sum should be required to be immediately disclosed, even if frequency for smaller donations is increased.

6) There was very strong support for more detailed public disclosures of non-cash donations. A number mentioned the use of fundraising auctions, particularly by the Labour Party, as needing much tighter scrutiny and regulation.

7) Most submissions called for the public disclosure of many more donations, even those under $1500 (which the Government is proposing should be exempt from disclosure). There is strong support for the publishing of the volume and total of donations that political parties receive, regardless of the threshold level.

8) There is very clear support for increased transparency and audits of party finances.

9) Submitters support requiring political candidates to disclose loans, with some calling for a complete ban on loans, a practice at the centre of the current trial related to the NZ First Foundation.

10) In terms of anonymous donations, most submitters thought that there should be either a complete ban or they should be much more restricted – typically a $100-$200 limit per year.  There was some concern about the administrative burden of collecting information for very small donations, but a number made the point that modern technology and finance tools have made tracking payments and donors much easier, and that many countries successfully operate much more detailed and frequent disclosure regimes.

There was some very limited opposition for a complete ban on anonymous donations, notably from the Law Society who argued that some anonymity for donations under $1500 is justified. However, the Chartered Accountants association supported a ban, noting how problematic anonymous funding can be, saying that “while political parties are not subject to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, there is a reasonable public expectation that political parties have an important role in deterring potential money laundering activities.”

11) A significant number of submissions recognised that greater restrictions and regulation of political donations would lead to a severe reduction in income for political parties, and that this might therefore increase the need for greater state funding of parties.

In general, the submissions are a mixed bag, with varying quality of analysis. That is the nature of public submissions. It can’t be assumed that the submitters are in any way an accurate representation of the public. Nonetheless, it was apparent that there were very few “cut and paste” submissions, which often occurs when some organisations ask their supporters to make submissions repeating a party line. Given that, the near unanimity of views that the proposals needed to go further was striking.

On the other hand, unfortunately, there were also very few submissions from civil society organisations – Chartered Accountants Australia & New Zealand, the National Māori Authority, Greenpeace, Transparency International New Zealand, the Gama Foundation and the New Zealand Values Alliance. This suggests a need for the Government to find ways to expand their public consultation on this crucial area of democracy.

If you want to see the file of public submissions, this is now available on my Democracy Project website – see: Ministry of Justice OIA release of information on political donations.

Further reading on political donations

Andrea Vance (Stuff): Political party views on donations shake-up kept secret in deal with Ministry of Justice
No Right Turn: A conspiracy against the public
Sam Hurley (Herald): NZ First Foundation case: High Court permanently suppresses identities of accused pair
RNZ: NZ First Foundation case: Donation handlers win permanent name suppression

Other items of interest and importance today

COST OF LIVING AND INFLATION
Daniel Smith (Stuff): Over 40% of workers struggling to meet basic needs, research shows
Thomas Coughlan (Herald): Inflation helps firms posting super profits in 2022, but MPs cool on windfall tax
Eric Crampton (Newsroom): Extra half billion dollars in fuel cuts could have gone to critical health shortages
Liam Dann (Herald): Is a housing crash the secret weapon in war on inflation? (paywalled)
Susan St John (Daily Blog): Here is what must happen in child poverty before the end of this year
Steven Cowan: The Winter of discontent
Brent Edwards (NBR): Inflation will have an impact on next year’s election (paywalled)
John McDermott (NBR): The uneven effect when prices rise (paywalled)
David Hargreaves (Interest): It’s crunch time in the inflation battle
Jenée Tibshraeny (Herald): Will higher-than-expected inflation send mortgage rates further north? (paywalled)
Tim Dower (Newstalk): Having our youth living in poverty makes no sense at all
Daniel Smith (Stuff): Three industries hit hardest by inflation
Rodney Dickens (Interest): Calls for more OCR hikes are seriously misplaced
Damien Venuto (Herald): How much longer will the inflation pain last?
Kurt Bayer (Herald): Construction site raids: Builders resort to sleeping on-site to deter brazen thieves (paywalled)
Pattrick Smellie (BusinessDesk): Why I’m tired of the RBNZ blame game (paywalled)
Clint Smith (Stuff): Who should bear the cost of tackling inflation?
Brianna Mcilraith (Stuff): Petrol prices drop across NZ as Government questions fuel companies
RNZ: Weekly food spend up by 5 percent on last year, survey finds
Seni Iasona (Newshub): Employee Sentiment Index finds 41 percent of Kiwi workers are struggling to meet basic living costs

THREE WATERS AND CO-GOVERNANCE
Richard Harman: Why the Government needs Three Waters (paywalled)
Chris Trotter (BFD): We are all Māori – with a small ‘M’
Chris Trotter (Daily Blog): The Danish solution: How repudiating co-governance could be the saving of Labour
Tim Dower (Newstalk): Our water needs attention, but Three Waters is not the way to do it
Richard Prebble (Herald): Three Waters is an attack on democracy (paywalled)
Irra Lee (1News): Three Waters debates need to be based on fact – Ardern
Claire Trevett (Herald): Three Waters: Government to give councils $44m to help set up Three Waters reforms
Bill Cashmore (Herald): Auckland Council’s position on the Three Waters reform has been consistent since announced (paywalled)
Stephen Ward (Stuff): Hamilton councillors unite to say ‘no’ to Three Waters bill – but political ripples remain
RNZ: Lower South Island mayors stake jobs on three waters approach
Imogen Wells (Newshub): Three Waters dominates at Local Government NZ conference, but Jacinda Ardern dogged by mask controversy
Georgina Campbell (Herald): Wellington fluoride failure a scandal in a league of its own (paywalled)

LOCAL GOVERNMENT AND ELECTIONS
David Farrar: LGNZ bans dissenting voices from its annual conference
Janine Rankin and Conor Knell (Stuff): ‘It’s tough time to be a public official’ – Prime Minister at LGNZ conference
Giles Dexter (RNZ): ‘The toughest term’: Mayors grapple with pace and scale of reforms
Roman Travers (Newstalk): How do we encourage people to vote in local body elections?
Te Aniwa Hurihanganui (1News): All newly elected Māori councillors to get mentor
Ashleigh McCaull (RNZ): Māori councillors say they face racism in role: ‘Well your people should be alright, they’ve raised the benefit’
RNZ: Councillors experiencing racism, discrimination on the job – survey
Mike Hosking (Herald): Christchurch the Super City – think big, dream big and build it big (paywalled)
Anna Fifield (Stuff): LGWM requires carrots and sticks
Jonathan Milne (Newsroom): Wanted for the All Blacks, but not as NZ citizen – why Inoke Afeaki is running for election
David Williams (Newsroom): Mayoral candidate: I should have disclosed conflict
Georgina Campbell (Herald): Wellington’s mayor playing high-stakes election game (paywalled)
Georgina Campbell (Herald): Wellington ‘out of step’ with only one special voting booth
Matthew Scott (Newsroom): Candidates clash as Auckland mayoral race heats up

NATIONAL PARTY
Rebecca Stevenson (Interest): Christopher Luxon is right. NZ business is soft
Ben Thomas (Stuff): Plumbing the depths: the decline and fall of an Opposition
Thomas Coughlan (Herald): Poll: National support with women increases, overtaking Labour, despite abortion controversy
Andrea Vance (The Spinoff): ‘They clashed like f*ckery’: The final straw for Todd Muller
Andrea Vance (Stuff): The inside story of Todd Muller’s tipping point, as told in the book Blue Blood
Ireland Hendry-Tennent (Newshub): Nicola Willis says changing abortion laws would be ‘dealbreaker’, trusts Christopher Luxon’s assurances National won’t
RNZ: National Party conference to go ahead in person despite rising Covid cases

PARLIAMENT, GOVERNMENT AND ELECTIONS
Tova O’Brien (Today FM): It seems the Government is as all over the shop as the rest of us
Peter Dunne: Time for MPs to think for themselves
1News: Shaw: Leadership questions not behind moving Greens AGM online
Martyn Bradbury (Daily Blog): Right or Left? Two scenarios for political violence in NZ 2023 election
Sam Olley (RNZ): Environmentalists, mana whenua criticise PM’s ‘appalling’ gift to US president
Debbie Ngarewa-Packer (Herald): NZ’s future leaders ready to be heard right now
Olivia Shivas (Stuff): $1m Election Access Fund gets mixed response from disabled people
Thomas Manch (Stuff): Youth MPs call on Parliament to lower the voting age
Herald: Online survey to see if you want to be on the Māori Electoral Roll or the General Roll
Deena Coster (Stuff): Democracy NZ not just a ‘one-issue party’ – leader

IMMIGRATION CHANGES
Ireland Hendry-Tennent (Newshub): Greens say new investor visa slap in face for nurses, lets super wealthy buy residency while they jump through hoops
Jenée Tibshraeny (Herald): Foreign investors will need to work harder to get NZ residency
Matthew Scott (Newsroom): Partner work visas on the chopping block
Amelia Wade (Newshub): Concern Government’s investor visa change could lead New Zealand to losing billions

HEALTH
Ian Powell: What happens when a health minister loses workforce trust and confidence
Damien Venuto (Herald): What could alleviate massive strain on the health sector?
Janine Rankin (Stuff): Covid-19 exposes deep trouble in primary healthcare
Zarina Hewlett (Today FM): NZNO not “impressed” Andrew Little dismissed their credibility

HOUSING
Andrea Vance (Stuff): ‘Get rich quick scheme’ – $16m paid to an Auckland motel for emergency accommodation
RNZ: New home building costs rising at record 7.7% annual rate
1News: KiwiBuild a ‘totally failed policy’ – Nicola Willis
Katie Bradford (1News): Govt relaxes restrictions around troubled KiwiBuild policy
Herald: Kiwibuild: Income and price caps adjusted for Government housing scheme
Louise Ternouth (RNZ): Renters stuck in cold, damp homes as compliance with law lacking – advocates

COVID
Jamie Ensor (Newshub): Jacinda Ardern snapped maskless may ‘indicate that’s okay behaviour’, photo-ops should model good mask-use, experts say
Amelia Wade (Newshub): Michael Baker ‘quite shocked’ at photo of Jacinda Ardern maskless in crowd
Claire Trevett (Herald): The PM and the maskless photo – fair or foul, and have we got too precious? (paywalled)
Ireland Hendry-Tennent (Newshub): National Deputy leader Nicola Willis defends PM Jacinda Ardern after maskless photo causes furore
1News: ‘Give her a break’: Willis defends PM’s maskless group photo
Zizi Sparks (Herald): Covid-19 mask wearing shouldn’t fall by the wayside (paywalled)
Lloyd Burr (Today FM): Can we ease up on the mask shaming, please?
Herald: Editorial: Sick days hit the workforce as second wave rises (paywalled)
Hannah Martin (Stuff): What we know about the ‘Centaurus’ BA.2.75 variant in New Zealand

EDUCATION
John Gerritsen (RNZ): Think-tank reveals high failure rate in small trial-run of new literacy, numeracy tests
Gabrielle McCulloch (Stuff): Number of students missing from school has almost doubled in past nine months
Sarah Robson (RNZ): The boom and bust of our polytechs

Is the National Party off the hook over the Serious Fraud Office donations prosecution? That’s what the party is claiming, pointing out that no National official or MP has been charged.

But of course, there was a National MP involved – albeit one no longer with the party – and he is being prosecuted. In fact, at the time of the alleged offending, Jami-Lee Ross held the very senior role of Party Whip and was known to be close to Bridges. There is also no escaping the fact that the dodgy donations were made to and accepted by the National Party.

News yesterday that Jami-Lee Ross is one of the four going to trial should be a major embarrassment for National. For a very good account of what occurred yesterday, see Sam Hurley’s Jami-Lee Ross speaks out about his ‘outrageous’ SFO charges after name suppression lifts.

In terms of Ross’ surprise charge by the Serious Fraud Office, it’s worth reading Claire Trevett’s very good column today: Jami-Lee Ross SFO charges – blowing the whistle on NZ politics’ greatest own goal (paywalled).

Here’s her succinct summary: “Ross was revealed as one of four men charged by the Serious Fraud Office for alleged involvement in two donations to the National Party which had been broken up into smaller amounts to avoid disclosure. Rarely has anybody been both hero and zero at the same time. In this saga, Ross himself was the heroic whistleblower – it was he who exposed an alleged $100,000 donations rort within the National Party. That was an attempt to discredit Bridges. Instead, Ross is now in court charged with that alleged rort himself – although he has been quick to claim he is innocent and a ‘scapegoat’ for the National Party.”

Trevett nicely backgrounds how Ross came to be charged: “It was yet another twist in one of the most dramatic episodes New Zealand’s Parliament has witnessed, which began in October 2018 when Ross, full of rage, mounted a scathing attack on Bridges’ integrity. He claimed Bridges had ‘directed’ that a donation be split into smaller parts to avoid disclosure. Bridges denied it and Ross delivered an audio recording of a phone call with Bridges that proved nothing at all other than that the donation was talked about. It was Ross too who delivered papers to the police station, the media trailing him through Wellington’s streets as he went, the white knight of justice.”

She says that National should be worried: “In the court of public opinion, the entire story is a rank one for the National Party – regardless of whether they are in the dock. However it is spun, and whoever is involved, it is not a good look for the party. It fuels suspicion… National has a lot more to lose and this will now plague it in an election year, including potentially damaging evidence from those charged. Ross himself has said he will produce evidence as to whodunit”.

National is still arguing that the charges and the donations procured by Ross have little or nothing to do with them. MP Paul Goldsmith even went on TV this morning and said this about the scandal: “We’re watching it closely but it’s not relating directly to us”.

The attempts by National to distance themselves from Ross’ actions are rejected by blogger Martyn Bradbury who says: “Jami-Lee Ross is theirs, they’re responsible for him despite all their deceitful manipulations pretending he’s some rogue lone wolf” – see: Consider the distance National are pretending exists between them and Jami-Lee Ross.

Bradbury argues that Ross “joined National early & rose through the ranks because of the dark skill set they are now damning him for. His head kicker schtick and House of Cards ethics were crafted by the National Party hierarchy who saw talent in his Stormtrooper ways. He became a whip, he was a bag man for the boss, he was muscle for political kneecappings.”

He believes the court trial will end badly for National: “The JLR charges by the SFO are the worst outcome for National. It means the bloody thing won’t die now and could possibly play out in Court during the election. That’s a lot of air time for JLR to endlessly claim Simon is corrupt and release the rest of his hidden evidence.”

Electoral law expert Andrew Geddis said some similar things on RNZ’s Morning Report today: “One of the persons that has been charged is Jami-Lee Ross, who was Chief Whip under Simon Bridges, and was for a while their party ‘bagman’ in Auckland, whose job was to go around raising very big sums of money from particularly the Chinese community to fund the party business. And one two occasions, according to the Serious Fraud Office, he did so unlawfully. Now, how closely voters want to tie Jami-Lee Ross – who was a National Party MP – to the existing party, well, I guess that’s what we are going to be discussing” – see: National Party can’t separate itself from fraud charges against Jami-Lee Ross – expert.

He also suggests that the trial is unlikely to take place before the election – although “that doesn’t of course stop Jami-Lee Ross continuing to speak out if he so wishes”.

Geddis also wrote last month – when the SFO first announced their decision to charge four individuals – speculating on whether this might damage National. He suggesting it would depend on “the degree of culpability that the public assigns to National for being associated with this sort of allegedly unlawful behaviour. Will National be seen as complicit in the alleged offending, or a victim of it?” – see: A political donations powderkeg: on SFO criminal charges and the National Party.

He argued that “the fact no charges may have been laid against them does not necessarily mean that Bridges and the National Party can claim to be completely blameless in this matter.”

And he outlined why he’s not surprised that no National officials, or the party leader, have been charged: “For Bridges to be charged, he pretty much would have to had explicitly told donors something like, ‘I want you to give my party this money in this illegal way.’ Now, much as I know that plenty of inner-city, kombucha drinking liberal types like to hate on our Simon, no political party leader would be that stupid. Not even Simon Bridges. And the National Party secretary’s legal responsibility really amounts to little more than receiving and recording donations, before passing on limited information about those donations to the Electoral Commission. When doing so, he’s entitled to simply rely on what he’s told by donors to the party without having to try and independently verify that it is the truth.”

Some of these questions are also raised briefly in today’s Dominion Post editorial: “More importantly for voters in 2020, it will be hard for Bridges to plausibly claim he had nothing to do with the donations. He too is under pressure” – see: Songs, jokes and serious fraud in New Zealand politics.

National and Bridges are very lucky that this scandal has only fully hit the courts amidst controversy over the NZ First Foundation donations, as the public might be less inclined to follow the detail or see this behaviour as particularly unique.

And due to its own predicament, NZ First is unable to lead the charge against National in their usual manner. Labour and the Greens are also somewhat hamstrung, given that they have chosen not to take a hard line against NZ First over their donations scandal.

The quietness of National’s rivals is already being noted. RNZ says: “Even leaders of other parties like NZ First’s Winston Peters and Green co-leader James Shaw were reluctant to pass comment. ‘You hear of the sub judice rule? Well start observing it,’ Peters said to reporters. Shaw said he couldn’t comment on the particulars of the case, because it is part of a judicial process” – see: National Party donations case: ‘I am now being painted as the scapegoat’ – Jami-Lee Ross.

This will leave most of the debate to commentators and bloggers. And Labour Party blogger Greg Presland has sarcastically mocked Bridges’ apparent pleas of innocence in regard to the scandal – see: National has nothing to be afraid of.

Here’s his list of how little Bridges supposedly knows about what has gone on: “Simon Bridges himself had no idea what was happening. He has not met Zhang Yikun or Colin Zheng or had dinner at their home. He was not told that they wanted to make a $100,000 donation to the National Party. He was not told by Jami-Lee Ross that the money had been paid. He was not going to spend the money on attack ads. He was not aware that the money had been paid into the National Party Botany account. He was not told that the donation would be made by multiple people belonging to one association. He was not aware that the expectation behind the donation was having two Chinese MPs. He did not know that the donation was carved up into non declarable little pieces and transmitted to head office. Colin Zheng has not put his name forward for National’s candidate’s school.”

And even National-aligned blogger David Farrar admits the case is “very embarrassing for National” – see: SFO files charges in National Party donations case. He says: “Even though the party presumably (if correct the charges are against the donors only) did nothing wrong (in fact HQ insisted on getting details for each donor, and verifying they were eligible to donate), it is still a bad look to have charges laid in relation to a donation to you. At a minimum the party should, once the legal issues are dealt with, refund the donation.”

Finally, there are still questions about the twists and turns regarding the name suppression originally granted to the four men, which was lifted yesterday. For an interesting discussion by a journalist involved in this saga, see Barry Soper’s If Jami-Lee Ross didn’t want name suppression why did his lawyers threaten me?

A very concerning element of the current NZ First donations scandal is the role of lobbying and lobbyists close to the Government. The most recent story from RNZ’s Guyon Espiner and Kate Newton, revealed that lobbyist Doug Woolerton, who is also a trustee of the NZ First Foundation, had been advocating for law changes on behalf of a property developer client who was a donor to the Foundation – see: NZ First Foundation trustee was lobbying for donor.

According to Espiner and Newton, Woolerton “took on apartment developer Conrad Properties as a client for his firm, The Lobbyist”, and then lobbied politicians on their behalf. In addition, the same company was making donations to Woolerton’s NZ First Foundation: “Between July 2018 and January 2019 Conrad Properties, and entities which share the same two directors, donated $55,000 to the foundation in four amounts, which all fell below the public disclosure threshold.”

Is this a problem? As National Party blogger and pollster David Farrar tweeted yesterday, “There is nothing wrong with being a lobbyist. There is nothing wrong with being a party fundraiser. There is a lot wrong with being both. The two roles should be ethically incompatible.”

Guyon Espiner had already reported on Woolerton’s role as a lobbyist in his original story about the secret donations – see: Mysterious foundation loaning New Zealand First money. He cited the sales pitch on The Lobbyist website, which offers: “all ancillary services such as media strategies, speeches, drafting changes for legislation, submissions to select committees and personal introductions when appropriate”.

Espiner approached Woolerton for comment, but he “wouldn’t say what the foundation was, what his role as a trustee involved or whether he believed he had conflicts of interest given he also ran a lobbying firm.”

At the time, Danyl Mclauchlan also examined these arrangements: “When you have companies and individuals making secret donations to a party that holds the portfolios in those industries, there is every reason for the public to ask questions about whether their government is corrupt” – see: The NZ First donations scandal is very serious, and won’t let Jacinda Ardern hide.

Mclauchlan pointed to NZ First’s apparent vetoing of the Labour-Green capital gains tax proposal, which many in the property sector were so opposed to, and says in light of this, “The public has a right to know that they were being funded by property developers.” He noted that while in government, NZ First has “taken very strong policy stands on behalf of specific industries and companies”.

Woolerton has played a role in the NZ First party according to Richard Harman who profiled him in a 2018 article that pointed out he had been “the party president for 14 of its 25 years and an NZ First MP for 12” – see: How NZ First could go with National. According to this, “Woolerton has retired from Parliament and the Presidency, but he is still a force behind the scenes. He says he writes two pages memos from time to time to NZ First MPs just reminding them of that constituency that the party represents.”

For more on NZ First-related allegations of policy being vulnerable to lobbying and vested interests in this Government, see my column from last week, Political Roundup: Is Government policy for sale in New Zealand?.

There have been other NZ First-related lobbying controversies involving Shane Jones. Last month Guyon Espiner broke another story about the Provincial Growth Fund, with allegations that the NZ Future Forest Products company, which has close links to NZ First, had lobbied the minister about a bid for funding over dinner at the Beehive, but Jones didn’t disclose this – see: NZ First-linked company in government loan bid says it met with Shane Jones.

According to this article, the company’s “directors include Brian Henry, lawyer to New Zealand First Party leader Winston Peters, judicial officer of the party and one of two trustees of the New Zealand First Foundation, and NZ First leader Winston Peters’ partner Jan Trotman, who joined the company in August 2019.”

Other lobbying scandals in the Government

Lobbying controversies continue to plague the Labour-led Government. Last year, I covered the major one, where a lobbyist was employed as Jacinda Ardern’s acting Chief of Staff while remaining a director and owner of a large lobbying firm – see: Political Roundup: Have corporate lobbyists been running this government?.

There have since been other problems of potential conflicts of interests involving lobbyists employed to work in the Beehive. In January, it was revealed that the Government had been employing lobbyist Barry Ebert to work in the Labour Leader’s Office and as a Specialist Ministerial Adviser to Cabinet Minister Phil Twyford – see Jason Walls’ A senior staffer to Minister Phil Twyford owned lobbying firm while working for Minister.

According to this report, “While he was working for Twyford, he remained the director and owner of Three Point Two Communications, according to Companies’ Office records. In fact, the Three Point Two website still lists him as the director of the PR firm.” And “The firm advertises ‘advocacy and lobbying’ services helping clients ‘stay several steps ahead of your competitors and the regulators’.”

The lobbyist claimed that no conflicts of interest arose during his time working in the Beehive. But according to Thomas Coughlan, he carried on with outside work without full disclosure of this – see: The lobbyist working in Phil Twyford’s office didn’t disclose contracts to employer.

Coughlan has also written about the case in an opinion piece, complaining “while there’s no suggestion of any wrongdoing, the lack of proper disclosure is concerning. He won’t disclose the names of his clients – and short of the Prime Minister forcing his hand, we’re forced to take him at his word” – see: There’s nothing wrong with lobbying – so why won’t the Government prove it?.

Coughlan also outlines some of the anti-democratic risks of having such loose rules around lobbyists working in and out of government. He comments: “All this makes it staggering that New Zealand is so laissez-faire when it comes to lobbying, which is almost entirely unregulated. The US, for example, forces lobbyists to disclose who they’re acting for, how much they were paid for the contract, and their lobbying expenses.”

Lobbyist Matthew Hooton has become an outspoken critic of this situation, telling Mike Hosking that “that you simply can’t be working at the Beehive while advertising your services as a lobbyist” and it’s a sign of how lax this country is on lobbying – see Newstalk ZB’s Matthew Hooton criticises Government’s lax attitude to lobbyists. He says “Even in Trump’s Washington, these people would be in custody if something like this happened.”

Hooton also wrote about the Government’s lobbying controversies late last year, relating this to Prime Minister Jacinda Ardern’s apparently relaxed nature towards NZ First’s fundraising practices: “she has adopted a ‘don’t ask, don’t tell’ policy towards the political and personal activities of ministers from NZ First and the Greens. Perhaps Ardern’s reticence to carry out her constitutional responsibilities as Prime Minister relates to her not being squeaky clean herself. One of her closest political advisers is one of my fellow lobbyists, Gordonjon Thompson, who she uses as a sounding board” – see: Winston Peters must tell — but Jacinda Ardern must ask (paywalled).

Hooton elaborates on Ardern’s employment of Thompson as her acting Chief of Staff: “According to the Prime Minister, Thompson had input into all staffing matters across every Beehive office, including the appointment of 111 staff. Moreover, he had access to all Cabinet papers and other secret Government material, perhaps even to SIS security clearance reports on potential Beehive staff. The Prime Minister will not say what his security classification was or if he had access to intelligence information and attended meetings and briefings with her as Minister for National Security and Intelligence.”

Was this a conflict of interest? Hooton comments: “Through all this time, Thompson remained a shareholder and director of his lobbying firm, obliged to act in the best interests of the company, and even conducted some company business. His services as a lobbyist continued to be advertised on the company website, along with the number of the cellphone sitting right next to him on the 9th floor of the Beehive.”

Finally, one of the key sectors of lobbying is health, and the ODT’s Bruce Munro has delved into this to see what effect the lobbyists are having on our health system and laws – see: Up to no good: What impact is lobbying having on public health?.

Does money buy policy in New Zealand politics and government? Based on the ongoing political finance scandal involving New Zealand First, which comes hot on the heels of the Serious Fraud Office charging four people in relation to donations to the National Party, New Zealanders have every reason to doubt the integrity of the electoral process. It’s no wonder there are growing calls for reform of a broken political finance system.

The ongoing leaks about the donations received by NZ First, and what look like attempts to at least circumvent political finance laws, saw the Electoral Commission refer the matter to the Police, who have now passed the scandal onto the Serious Fraud Office for investigation. At question is the role of the NZ First Foundation, which Winston Peters argues is separate from the party, but which appears to have been used to collect the donations in a highly questionable way.

This has the potential to damage to the reputation of not just NZ First , but the Government as a whole, and could have a significant influence on the election year.

Serious questions are now being asked about the influence that hitherto secret donations have had on various Government policies and decisions. The latest details about the donations were published yesterday by RNZ’s Guyon Espiner and Kate Newton – see: NZ First Foundation received tens of thousands of dollars from donors in horse racing industry.

This article details some of the many donations made by those in the racing industry that were given to the party in a way that meant they weren’t made publicly available. And although the article stresses that the law may not have been broken by these donations, it links them to policy decisions by this government.

Here’s the key part: “In this government’s first Budget in May 2018, Peters announced $4.8 million would be spent over four years for tax deductions to be claimed for the costs of acquiring ‘high quality’ breeding horses. Then in the 2019 Budget the government repealed the betting levy. That meant that a 4 percent levy on betting profits – which previously netted the Crown about $14 million a year – would not be paid to the government, but would be redirected to the racing and sports sectors. Peters signed off on the move despite the opposition of Treasury”.

Of course, this doesn’t necessarily mean that racing industry donors bought these policy decisions. But the lack of transparency, and the apparent attempts made to hide the donations, are enough to raise suspicions about the democratic process. The article quotes Otago University’s Andrew Geddis about the importance of the public knowing who funds parties: “Unless we’re able to see who was putting money into the system, and then see who’s getting benefits out of the system – you simply aren’t able to draw those connections and ask, you know, is there a problem?”

Geddis is also quoted in another article by RNZ’s Espiner and Newton, saying information about donations is “very important for the public to know” in a democracy “where we’re entrusting political parties and their representatives with a great deal of public power” – see: Wealthy and powerful NZ First Foundation donors revealed.

This article also provides further details of how the mysterious NZ First Foundation raised more than $300,000 in the 2017-19 period in the form of donations of around $15,000 or just under. The $15,000 figure is the threshold for when donations have to be made public. Espiner and Newton point out that “in some cases, multiple such donations were made by related entities or individuals during a year”. The possibility exists that larger donations might have been broken into smaller donations to evade the law.

Winston Peters hit back, doing a Facebook Live Q+A on Wednesday night in which he argued that “donors to the New Zealand First Foundation are entitled to keep identities secret” if the sums involved are under the threshold – see Derek Cheng’s Winston Peters says donors are entitled to anonymity. Peters added that such donations are necessary “if we don’t have such a system of public fundraising, taxpayers would have to pay and we’re diametrically opposed to that”.

In terms of the Government’s racing industry reforms, Peters said: “no one is buying any policy here” because as Minister of Racing he had simply implemented an independent racing policy. And he’s been backed up by Prime Minister Jacinda Ardern, who says accusations on this are “not fair”. She has said: “Racing policy, decisions, bills, as with any decision we make, as a Government, goes through considerable scrutiny – no one policy is ever decided by one party, they go through all of us.”

National’s finance spokesperson Paul Goldsmith has called for some reassurance that money isn’t buying policy: “We have New Zealand First ministers making large decisions about large spending and all New Zealanders want to be assured about the integrity of the decision-making” – see Jo Moir’s Winston Peters on Foundation donations: ‘I did not receive any money’.

In this article, Shane Jones is reported as arguing that the controversy is just a witch hunt against the party, and denies racing or fisheries policy is for sale: “No, I think that’s really petty to talk to like that… I’ve been a recipient of Sealord’s and the Dalmatian leadership in terms of fisheries, and I resent any suggestion that decisions or statements I make about fisheries are driven because of donations.”

Some defence of the arrangements are also found in Barry Soper’s column yesterday – see: Winston Peters’ Trumpian moment. He relays Peters’ point about why he’s helping the racing industry: “he’s fought for the survival of the industry for the last 30 years, he told us. Significant changes to it last year came from a review of it by an overseas, independent advisor who said it needed urgent reform and would be irreparably damaged if it wasn’t carried out.”

Soper points out that other political parties also take donations from sectors that expect policy wins – for example, “the significant support of the trade union movement for Labour. And they don’t do that for nothing, neither does the racing industry for Winston Peters or big business for the National Party which gets the lion’s share of donations.” He concludes that party donations “should be seen for what they really are, paying for the sympathetic ear of a lawmaker.”

Jacinda Ardern has also defended NZ First’s connection to the racing industry on the basis that is “no secret to anyone in New Zealand that Winston Peters has a strong knowledge, understanding and long-standing connection to the racing industry”.

In response to this, National-aligned blogger David Farrar says: “Yes she is defending NZ First having massive secret donations from the racing industry and in return delivering huge financial windfalls to the racing industry with taxpayer money” – see: Has Jacinda read her own coalition agreement?

Farrar also makes the point that NZ First cared so strongly about their racing policies that they demanded them be installed as part of the coalition agreement: “Jacinda needs to read the Labour and NZ First Coalition agreement. It requires Labour to ‘Support New Zealand First’s Racing policy’. There is no other portfolio which has the agreement requiring the Government to support one party’s entire policy. This shows how massively important it was that NZ First could guarantee to its funders their policies would be implemented.”

Newsroom editor Bernard Hickey says the public should take these racing industry financial connections seriously: “Winston Peters is Racing Minister and has pushed through reforms to the NZ Racing Board and the industry that are expected to see the TAB sold off to Australian betting companies in a way that breeders and trainers want. He has also cut levies paid by the industry” – see: Winston Peters should stand down as Racing Minister.

He argues therefore that “Winston Peters should stand down as Racing Minister, at the very least, while those donations are being investigated by the Serious Fraud Office.” Furthermore, “the Government should put its Racing Industry Bill, which is in the select committee stage after its first reading in Parliament last month, on hold.”

Hickey is also interviewed on the whole connection between money and politics in another article, in which he says the lack of transparency that appears to exist in the current arrangements in political finance law means that “the scrum is screwed, if you like, by people who are wealthier than the rest of us and can ask for special favours, and have influence over a project larger than they would have if they were just another citizen who was voting in an election. One of the ways to protect yourself is to make sure everyone knows who’s donated what to whom” – see Alexia Russell’s New Zealand First in party donations furore.

Finally, for the best dissection of the NZ First leader’s eight-minute appearance on Facebook in which he promised to tell the “truth about the NZ First Foundation”, see Ben Thomas’ So many questions as Winston Peters goes live on Facebook.

What is it about reforming laws around money and politics that makes politicians so inclined to stuff it up and act undemocratically? From Helen Clark’s notorious Electoral Finance Act (2007) – which the party eventually voted to repeal, given it was so anti-democratic and unworkable – through to yesterday’s announcement of a so-called ban on foreign donations, politicians are inclined to act quickly, without proper consultation with the public and end up making bad law.

Partly it’s because it’s something of a populist issue – to hit the wealthy. And partly it’s because at the moment it has xenophobic elements – dealing with the foreigners who are said to be threatening our democracy. This means politicians want to move fast, with high moral certainty, and damn the complexities and democratic challenges involved. Of course, there is also usually a large dose of self-interest, which is always a bad motive when politicians are designing rules around how elections operate.

Yesterday, almost out of the blue, came the triumphant announcement from Justice Minister Andrew Little that he was going to pass a reform of party donations laws, under urgency. The so-called ban lowers the threshold of allowable foreign donations from $1500 to $50.

For more details, see Jason Walls’ The Government will ban most foreign donations to political parties and candidates. Here’s the key part: “The bill contains a minimal threshold of $50 [for disclosure of donations from foreign sources], to ensure that small-scale fundraising activities such as bucket donations and whip-rounds won’t be affected. But big donations will be gone. It also introduces a new requirement that party secretaries and candidates must take ‘reasonable steps’ to ensure that any donation is not from an overseas person.”

Consensus about the ineffectiveness of the new rules

The response was quick, and almost entirely condemning. It’s hard to find a positive evaluation of the announcement from anywhere across the political spectrum. The best analysis was put forward by Newsroom’s Sam Sachdeva, who said that essentially the new law was “virtue signalling” because it pretends to get tough on donations but in reality it doesn’t do much at all. He says “there is less to the law than meets the eye”, and on “closer reading… the changes seem to create as many problems as they solve” – see: Govt’s foreign donation ‘ban’ leaves loopholes untouched.

The biggest problem, it seems, is that the new law essentially does nothing to deal with alleged and known loopholes that allow foreign sources to donate – especially those involving New Zealand trusts, businesses or foundations.

Sachdeva points to the most controversial example: “The $150,000 donation to National from the New Zealand-domiciled but entirely foreign-owned Inner Mongolia Rider Horse Industry Ltd, which Ardern pointedly described as being against the spirit of the law, would remain legal under the proposed changes. That loophole remains intact, along with the risk of overseas donations to third-party campaigners despite justice officials describing it as a ‘potential weakness’ in 2020”.

Another loophole that is retained by the new law, is that large anonymous donations will still be allowed, effectively also from foreigners. Sachdeva reports that officials from the Ministry of Justice and the Electoral Commission have already drawn the Government’s attention to the problem that comes from having a different threshold for anonymous disclosures ($1500) and foreign donations ($50).

This is a “glaring problem” in the rules according to Henry Cooke, who says: “This means that party secretaries will still be able to receive an envelope with $1499 of cash in it and bank it happily, as long as they don’t have any reason to believe the money came from a foreigner” – see: Andrew Little’s foreign donations ban is good politics, terrible lawmaking.

For these types of reasons, law professor Andrew Geddis has quoted independent MP Jami-Lee Ross saying: “The only way to effectively ban foreigners from influencing our politics is to restrict who can make donations to people that are entitled to vote.” Geddis concurs with the logic of this, agrees that the new bill is “pretty ineffectual”, but suggests that banning all donations from companies and trade unions would make state funding necessary – see: Less haste, more beef, please.

Newstalk ZB’s Mike Hosking also challenges how the new law would work: “the new rules solve nothing. And who is a foreigner? And whose money is it when it hits the party coffers? What about a company ultimately owned by a foreigner but domiciled here? What about a company partially owned by a foreigner? What about a new resident or new arrival on a business visa? What about a foreigner putting money through a resident? For every rule, you can dream up several scenarios to get around it. Like the tax, both legal and illegal” – see: Donation law is laudable bit ultimately pointless.

National’s spokesperson, Nick Smith, has been arguing that because of the way the new rules have been designed, they can easily be thwarted by foreign sources wanting to donate. He says “It’s very easy to set up a trust or a company or some other way to get around the new limit of $50 that’s proposed in this bill. So it’s not particularly robust” – see RNZ’s Foreign donations ban bill not robust – Nick Smith.

Smith says the new law needs to ensure that companies registered in this country and donating to politicians really are bona fide New Zealand companies: “A number of countries have different rules around whether it’s a trading company in New Zealand or what those different rules are around how they might be able to donate… For instance, you’ve got a company like Fletchers – a very New Zealand company, but actually has a majority of foreign investors. You need to resolve those sorts of details if you’re going to do this law robustly.”

According to researcher Pete McKenzie, “The distinction between protecting New Zealand from foreign interference and preventing corruption domestically is artificial”, and “the newly announced ban will do almost nothing to prevent foreign donations affecting New Zealand politics” – see his Guardian opinion piece, The foreign donation ban is a good thing – but it won’t protect NZ from political corruption.

He quotes the SIS director general, Rebecca Kitteridge, on foreign donations from earlier in the year: “We know that a foreign donation ban would not on its own be an effective way of mitigating the risks New Zealand candidates and MPs face… A foreign actor could easily use a proxy to work around such a ban. We know that foreign states are adept at understanding and working around regulatory regimes.”

McKenzie also challenges whether foreign donations being banned are even that significant: “Since 2011, foreign donations to New Zealand’s political parties have amounted to a mere $105,194… Total donations to parties over that same period amounted to more than $44m. Put simply, the foreign donations which New Zealand will soon ban are just 0.24% of the overall picture.

Anti-democratic abuse of urgency

The new “ban” on foreign donations law (or the “Electoral Amendment Bill No 2”) was passed this afternoon under parliamentary urgency. This is also being condemned across the board by commentators. For example, Andrew Geddis says this is “somewhat concerning” and that “Andrew Little is starting to betray a worrying habit” given that he has recently also pushed through the Terrorism Suppression (Control Orders) Bill.

Writing yesterday, Geddis emphasises that “this morning was the first time the public (and the opposition) even saw this legislation” and “means that there was no opportunity for select committee scrutiny, and no chance for the public to submit their views on the Bill.”

The official justification for pushing the new law through Parliament was the convention that changes to election rules shouldn’t be made in the actual year of an election. The Government had been relying on the justice select committee to come up with some recommendations prior to now. And this had been stymied by what Henry Cooke calls a “mess” on the select committee, pointing out that “its inquiry into foreign interference in our election processes went through six separate chairpeople in less than four months.”

Regardless of such frustrations, Cooke wasn’t buying the Government’s justification for such extreme urgency, claiming that it “is an appalling way to make law. A bad select committee does not excuse running roughshod over Parliament.” Furthermore, he argues, “Andrew Little could slow down and pass this bill with a single week of select committee hearings without stopping his aim of getting it in place by next year.”

In the blogosphere, there was agreement with this. From the left, No Right Turn said the proposed change “seems like a move which needs serious select committee scrutiny. Otherwise, we’re either going to end up with a cosmetic PR move, or a f…-up. And the public deserves better than that” – see: This is bullshit, and our democracy deserves better.

From the right, David Farrar was outraged: “There is no reason it should bypass select committee scrutiny and shame on the Greens for supporting ramming it through under urgency. Some Government apologists have tried to claim it must be done under urgency tonight to stop a rush of mythical foreign donations flowing through before the law takes effect. But the apologists haven’t even read the bill. It doesn’t take effect until 1 January 2020 so passing it tonight under urgency still means you could have the imaginary flood of donations occur” – see: Government rushing electoral law changes through under urgency.

Explanations for the bad law

In his blog post, David Farrar offered an explanation for why the Government might be so keen to avoid the public and opposition proposing changes: “If the bill went to select committee an amendment could be considered that would extend the ban (over a certain level) to foundations established by political parties to fund them. But Labour and the Greens don’t want to do anything about any foreign donations to the NZ First Foundation, so they’re rushing it through under urgency. Shame.”

The best analysis for why the Government was so keen to push this through, comes from Heather du Plessis Allan, who says “It’s nothing more than an attempt to look like it’s being tough on donations, timed for exactly when New Zealand First is facing questions about donations” – see: Foreign donation ban is half-arsed and conveniently timed.

Du Plessis Allan points out that this issue has been around for years – especially with Australia banning foreign donations two years ago – and it’s suspicious that out of the blue it’s become urgent enough to be passed within a day. She elaborates: “Anyone else think the timing is just a little cute? You’ve got the minor coalition party in trouble over donations allegations, and suddenly the major coalition party wants to make it look like it’s taking a hard line on donations. Very clever – pity we can see right through it. The reason this strategy is so obvious is because this law is so half-arsed. It doesn’t actually doesn’t look like it’s going to change much.”

Similarly, Barry Soper argues today that the donation ban is all about producing a distraction to get the Government out of tight spot: “So what does a Government do when it’s on the ropes? It looks for something that’ll get traction. Banning foreign donations to political parties even though it would seem the largesse of cash-rich foreigners is around the same level as our contribution to world greenhouse emissions, 0.2 per cent of total donations at the last election” – see: Master class of what Government does when it’s on ropes.

Soper is also sceptical of the new rule directing political party secretaries to decline any donations that might not clearly be domestic in origin: “The party functionary will be expected to track down who’s actually behind the cash flow. But what if the money’s fed through a New Zealand company without a foreign name? Russian rubbles would of course be a dead giveaway but if it’s been converted into dollars and the party secretary’s still unsure, it’ll go into consolidated fund – yeah right.”

Finally, the Labour Party continues to face questions about the ethics of their own political fundraising which involves $1500-a-head functions for businesspeople to meet the Prime Minister and her colleagues. But Jacinda Ardern has justified the arrangements – see Henry Cooke’s Jacinda Ardern says in ‘perfect world’ political parties wouldn’t have to fundraise at all.