Line between political access and political influence is porous

Associate Professor Michael Macaulay looks at the systemic flaws inherent in political party funding in New Zealand from an ethical perspective.

image of parliament

The latest furore about political party donations is yet another manifestation of an ongoing issue and it is not, sadly, anything new. At present that issue is, predictably, being reduced to the actions of individuals. However, the real problem lies in the political system rather than with particular MPs as the problem with political donations is inherently structural.

Party funding is crucially important in building trust in the political system. People must be confident their votes are equally important as those of large donors. Current evidence suggests this is not the case: public trust surveys from Victoria University of Wellington show party funding is consistently distrusted by around 70-75 per cent of New Zealanders.

There are numerous reasons for this distrust, other than natural scepticism towards politics. Not least are concerns private donations simply lead to policy capture: that vested interests buy political influence to benefit their own agenda.

We would not expect to see the kinds of links that, for example, the United States National Rifle Association has with the Republican Party (annual contributions around US$1million to Senators and Congressmen), but are we confident we don't have people buying a seat at the political table?

Private clubs for funding

Our two biggest parties both have private clubs for funding – whether this is Labour's President Club or National's Cabinet Club – which do not promote the openness needed to ensure individuals are not unduly influencing policy.

The typical response to this is these clubs grant political access rather than political influence. The same rationale is offered in the United Kingdom, in defence of the 'Leaders Club', which buys anyone willing to donate £50,000 to the Conservative Party meetings with Prime Minister Theresa May.

The problem is that even assuming it is true, the line between access and influence is far too porous for anybody to confidently believe it cannot be crossed.

Building on this, there is unease that some votes are worth more to political parties than others. We know from research last year that over half of political party donations came from contributions above $15,000.

A 'gold membership' for Labour's President's Club costs $5,000 per year. Despite arguments at its 2017 launch that it is "not remotely exclusive" and anyone was "welcome to join", it is difficult to see who actually has the money to do so.

Nobody can expect political parties not to maximise the funding opportunities at their disposal. It is therefore crucial to change the way we think about those opportunities. There is a different way.

A radical approach is to adopt 100 per cent public funding for political parties. This is not a new idea – Transparency International New Zealand raised it as far back as 2013 in its assessment of the country's national integrity system – and it is one that has some obvious objections.

Taxpayers funding political parties?

Will New Zealand taxpayers want to fund political parties? We should ask them.

We know New Zealanders do not trust current arrangements and we should find out the extent to which people will feel more connected to parties that do not rely on large donations or exclusive memberships.

Public funding need not be a huge burden: the total funds parties raise and declare amount to 0.0001 per cent of the government budget. It also builds on current arrangements that make public funding available for party electoral broadcasts, which at the moment stands at $4 million.

Furthermore, public funding would enable party supporters to refocus their energies: not on fundraising but on developing public policy for the decades to come.

Most importantly, though, we need to be able to have a free and frank discussion on the merits and drawbacks of our current model. Party donations are not an issue that is going to go away and the more we focus on individual behaviour the more we ignore the systemic flaws in funding. The problem of New Zealand political party funding is a wholly unnecessary evil. We need to address the system, rather than simply point the finger.