Funding New Zealand's Election Campaigns

Andrew Geddis Funding New Zealand’s Election Campaigns recent stress points and potential responses Abstract office in the Roman Republic became so rampant that it contributed to the end The nexus between money and politics creates particular problems of that system of rule; a fate that some for liberal democracies like New Zealand. Events during the last suggest conceivably may befall the United parliamentary term put our present system of regulating this issue States (Watts, 2018). Meanwhile, examples of political leaders using their governing under some stress. With two cases relating to political fundraising authority to enrich themselves and their now before the courts and other matters still under investigation by families unfortunately are legion. The link between these two kinds of the Serious Fraud Office, this is the right time to consider whether power becomes particularly problematic reform of the law is needed and what such reform ought to look like. in places governed according to liberal- democratic principles, where freely elected Keywords political funding, electoral finance, corruption, electoral representatives are expected to act in the law interests of those they govern. Money’s ubiquity means it is required for virtually s soon as human societies began economic sovereignty and dominance any sort of election-related activity. to accord exchange value to cattle, upon its holder. At the core of politics lies Although there may be the odd candidate Acowrie shells and shiny pieces of the struggle for and deployment of social able to win a local council seat without metal, money and politics became linked. influence and authority. The repeated spending anything on advertising, they still Each represents a form of power. The use of one form of power to obtain and need to pay for petrol to travel to meetings, possession of money, and the desire of buttress the other can then be seen across phone plans to talk to voters and supporters, others to obtain that money, bestows both time and place. Spending to gain elected any deposit required for their candidacy, and the like. Scale up to nationwide Andrew Geddis is a professor in the Faculty of Law at the University of Otago. elections – where, in New Zealand’s case, Policy Quarterly – Volume 17, Issue 2 – May 2021 – Page 9 Funding New Zealand’s Election Campaigns – recent stress points and potential responses you need to communicate a political party’s Such caps on election expenses, message to some three million potential While the aim however, only apply to a relatively narrow voters in a way that will convince them of range of electoral practices: in essence, its merits – and an adequate supply of of creating advertising undertaken during the three- money becomes critical. It is noteworthy, a measure of month ‘regulated period’ preceding polling for example, that three of the most recent day. Activities such as opinion polling, ‘big splash’ attempts to enter our national political equality running focus groups, candidate travel, political scene – Kim Dotcom’s Internet hiring campaign advisors, renting Party, Colin Craig’s Conservative Party and can justify some campaign offices and the like are not Gareth Morgan’s The Opportunities Party included. Nor does the cap on election – all shared something in common. All limits on expenses include advertising that is carried three organisations largely emerged fully out before the three-month pre-election formed from the deep pockets of their election spending, regulated period begins. In this era of the leader/benefactor. ‘permanent campaign’, such continuous Of course, these examples also prove tightening those political messaging is regarded as very that while having some money may be a limits too much important. Recall why then National Party necessary ingredient for political success, leader Simon Bridges was so happy to hear having a lot of it is far from a sufficient one. can become from Jami-Lee Ross that a group of Even spending millions of dollars cannot businessmen had made a $100,000 compensate for a fundamentally flawed unjustifiable. donation to his party: electoral product. Equally, a strong political kaupapa may overcome a relative lack of Um, look, I just think we want it for, uh, funds, as the Mäori Party’s comparative the advertisements and the like, you success on the smell of an oily rag showed know? We want it for the things that at the 2008 election (and, to a lesser extent, Trying to manage the arms race we’re gonna need to do over the next again in 2020). So, a simple cause-and- New Zealand traditionally endeavours to year or so, sort of outside of the – not effect claim along the lines of ‘more money limit the threat of this political spending outside of the party but um, uh, you buys more political success’ is clearly false. arms race effect by placing caps on how know, like I say we want to do some Which is not to say that an opposite much parties, candidates, and third more attack ads – say we want to do claim – ‘money is irrelevant to political party ‘promoters’ acting independently another regional fuel one, say we want success’ – is true. Any candidate or party of these primary contestants can incur in to do an industrial relations one. We who tries to argue that this is the case ‘election expenses’. Individual candidates just want to keep doing those things, should be asked a very simple question: have been subject to such limits since the right? (Spinoff, 2018) why do you accept donations from late 19th century, political parties since supporters, and are you perpetrating a 1996 and third party promoters since Consequently, the regulated election fraud on them when you do so? Because it 2008. At the 2020 election, individual expenses incurred for each campaign is a pretty safe bet that, all other things electorate candidates were permitted to represent but a fraction of the total that being equal, a candidate or party given the incur up to $28,200 in election expenses will actually be spent on seeking election. choice of facing either an opponent for their campaign to win a seat. Political The full extent of such expenditure is possessing twice their funds, or one with parties could incur election expenses of shrouded in mystery as candidates, parties less funds than them, will plump for the $1,199,000 plus $28,200 for each seat in and promoters are required to publicly latter option. After all, if money might make which they ran a candidate (allowing for report only on their election expenses a difference in the electoral contest you are a maximum of $3,229,400 for parties that following each contest, not their full involved in, then you would be pretty silly contested all 72 electorates). Third party campaign accounts. to go into it at a significant disadvantage. promoters who register with the Electoral However, extending the existing That perception then creates problems in Commission were entitled to incur up to controls on election expenditure carries and of itself. It generates something of an $330,000 in election expenses. In theory, potential risks. Such political spending is arms race situation for candidates and these caps on spending not only allow for a actually a democratic good, insofar as it parties, where having ‘enough’ money measure of some political equality between enables candidates and parties to reach and depends upon how much your competitors electoral participants, but also limit their attempt to persuade voters. Limit that have available to spend (among other need to raise funds. If you can only spend spending too much, or for too long, and factors). And the logic of seeking to avoid a certain amount on your own campaign, you may create a less well-informed comparative disadvantage while also and can be sure your opponents will be electorate. This effect may be particularly obtaining a possible comparative advantage similarly constrained in their spending, keenly felt by smaller or newer political can drive behaviours that are harmful to then the requirement to get money to actors who find it more difficult to gain the operation of representative democracy. compete is consequently reduced. coverage from the ‘free media’. Such Page 10 – Policy Quarterly – Volume 17, Issue 2 – May 2021 consequences may then create problems in exercise power over us, provided they then relation to the right to freedom of ... the criminal use it in our interests – is premised on an expression, as guaranteed by the New charges brought assumption that we all should have an Zealand Bill of Rights Act 1990, section 14. equal say in who gets to govern. We have While the aim of creating a measure of by the Serious long since rejected John Stuart Mill’s political equality can justify some limits on proposal that some groups of people election spending,1 tightening those limits Fraud Office deserve to cast more votes because they will too much can become unjustifiable.2 have better ideas about how to run our Equally, stricter controls on political (SFO) against society (Mill, 1977, p.475). Why, then, do spending by candidates or parties may have we allow for unlimited private funding of the effect of displacing such expenditure former National those who are competing for public power? in ways that actually are less accountable. Isn’t that a form of potential political For example, rather than a party or MP Jami-Lee Ross influence that is just as important, or candidate directly spending money on maybe even more important, than actually campaigning, they may coordinate with a and three casting a vote? Put it this way: if someone third party individual or group to do so on businessmen were to say to a candidate or party, ‘I’ll their behalf.

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