Volume 6 – Number 3 – August 2010

Special Issue: Funding Democracy

The Electoral (Finance Reform and Regulating Political Contributions: Advance Voting) Amendment Bill Another View from Across the Tasman Andrew Geddis 3 Joo-Cheong Tham 26 The Future State Project: Meeting Financing Political Parties in the the Challenges of the 21st Century United Kingdom Derek Gill, Stephanie Pride, Helen Gilbert, Jacob Rowbottom 8 Richard Norman and Alec Mladenovic 31 Contemporary Issues in Canadian Income Inequality and the Political Finance Regulation Economy of Ideas Colin Feasby 14 David Bromell 40 Ethnic Mobility: Is it Important for Public Money and Electioneering: Research and Policy Analysis? A View from Across the Tasman Paul Brown, Paul Callister, Kristie Carter Graeme Orr 21 and Ralf Engler 45 would leapfrog Australia ahead of New Zealand in terms of the amount of prescriptive control applied to those Editorial engaged in electoral activities. Looking beyond our trans-Tasman neighbours, the United Kingdom instituted quite extensive controls on electoral spending in 2000. Jacob Rowbottom explains Note some of the features of that regulatory framework and Volume 6 – Number 3 – August 2010 draws attention to where they may have lessons for the Money—where it comes from, how it is gained, and the changes proposed for New Zealand in the present Bill. uses to which it is put—matters a lot in politics. No Policy Quarterly (PQ) is targeted at readers Finally, Canada has perhaps the most comprehen- serious electoral campaign, be it in a constituency or sive and restrictive regulations on the use of money in in the public sector, including politicians and nationwide, can run without it. But at the same time, the electoral campaigns to be found amongst developed their staff, public servants and a wide variety of role money plays in a democratic polity raises numerous democracies. Colin Feasby, whose earlier writings proved professions, together with others interested in concerns about potential corruption, unequal influence, very influential in the Canadian Supreme Court’s deci- public issues. Its length and style are intended and debasement of our political culture. These conflicting sion that these measures pass constitutional muster, to make the journal accessible to busy readers. policy considerations, to say nothing of the self-interest of outlines just how tight a reign the law applies to electoral The journal welcomes contributions of those politicians who ultimately resolve them, mean that fundraising and spending. Whether New Zealand would be about 4,000 words, written on any topic any decision over how to regulate campaign financing will ready to adopt a similarly intensive regulatory approach relating to public policy and management. be controversial. is debateable. Articles submitted will be reviewed by It is against this backdrop that parliament’s specially Overall, the primary lesson that we can learn from members of the journal’s Editorial Board and/or convened Electoral Legislation Committee currently is these other nations’ attempts to control the use of money by selected reviewers, depending on the topic. considering the Electoral (Finance Reform and Advance for electoral purposes is that every regulatory choice Although issues will not usually have single Voting) Bill. This legislative proposal is but the latest creates consequences, and that those consequences then chapter in a story stretching back to the 2005 election themes, special issues may be published from demand further regulatory choices. This is not necessarily and the now-infamous Exclusive Brethren intervention in time to time on specific or general themes, to say that regulation is futile, or that less law is better that campaign. Concerns regarding that group’s activities perhaps to mark a significant event. In such than more. After all, a decision not to impose legal con- helped spawn the Electoral Finance Act 2007, which the cases, and on other occasions, contributions trols on campaign financing is a regulatory decision in and 2008 election campaign revealed to be critically flawed may be invited from particular people. of itself. Furthermore, every developed democracy has in application. Following this law’s near-universally Subscriptions: The journal is available in PDF some form of legal control on the use of money for politi- supported repeal in early 2009, the National Government format on the IPS website: www.vuw.ac.nz/ips/ cal purposes, even if only to prohibit the outright purchase embarked upon a lengthy process of public consultation pq. Readers who wish to receive it by email and sale of votes or governmental offices. over possible replacement legislation. Parliament now has should register as PQ subscribers The question, then, is not whether to regulate or not to decide what to do with the fruits of that consultation [email protected]. This service is free. to regulate campaign finance in New Zealand. Instead, it process. is what particular mix of prescriptive legal controls and For all subscription and membership enquiries However, while the issue of campaign finance has a laissez faire lassitude will best meet the various policy please e-mail [email protected] or post to particular history in New Zealand, we are hardly unique in concerns that arise in New Zealand’s particular political Institute of Policy Studies, P.O. Box 600, having to grapple with the problems it raises. Every other and cultural environment. That is a question on which Wellington. democratic society has had to confront it and decide on there will be many differing opinions. It is hoped that the Electronic Access: The IPS directs interested its regulatory response. In May of this year, the University five articles on this topic in Policy Quarterly can help individuals to its website: www.vuw.ac.nz/ of Otago Law Faculty and the Institute of Policy Studies provide fuel for the resulting discussion. ips/index.aspx where details of the Institute’s jointly hosted a symposium at which the experiences of This issue of Policy Quarterly also includes three publications and upcoming events can be three comparator nations could be considered. The aim articles on three very different issues. First, Derek Gill and found. was not to uncover a perfect answer to New Zealand’s four colleagues summarize the findings of a recent IPS Permission: In the interest of promoting debate problems; such an answer (if one is even available) must project, funded via the Emerging Issues Programme, on and wider dissemination, the IPS encourages grow out of and accommodate our own particular circum- the subject of “The Future State”. The project investigated use of all or part of the papers appearing in stances. However, the papers presented on that occasion, the challenges that New Zealand’s public sector is likely to which are reproduced in this issue of Policy Quarterly, PQ, where there is no element of commercial experience over coming decades and their implications for may aid us in choosing what regulatory options are, or are gain. Appropriate acknowledgement of both our system of public management. not, suitable for our conditions. author and source should be made in all Second, David Bromell assesses the findings of a One of those comparators, Australia, traditionally has cases. The IPS retains copyright. Please direct recent book that has attracted considerable attention in- adopted a more laissez faire attitude to the raising and requests for permission to reprint articles from ternationally. The publication, by epidemiologists Richard spending of money by electoral contestants than has New this publication to [email protected]. Wilkinson and Kate Pickett, argues that countries with Zealand. However, Graeme Orr describes how Australia’s Guest Editor: Andrew Geddis unequal income distributions perform less well on a range political actors show increasing interest in following New Editor: Jonathan Boston of educational, health and social indicators than countries Zealand’s example and placing limits on the spending of Editorial Board: David Bromell, Paul Callister, with more equal income distributions. The reasons for candidates, political parties and ‘third parties’ (which are Valentina Dinica, Michael Di Francesco, Mike this and the policy implications for New Zealand (which now termed ‘parallel campaigners’ in the New Zealand has a relatively high level of inequality) are both worth McGinnis and Jim Veitch context). He also explains how the Australian taxpayer pondering. ISSN: 1176 - 8797 (Print) currently provides significant support to the campaigns Finally, Paul Brown, Paul Callister, Kristie Carter and ISSN: 1176 - 4325 (Online) of individual candidates and their political parties, both Ralf Engler explore the issues surrounding ethnic mobility. Volume 6, Number 3 – August 2010 directly and through funding for parliamentary and Recent studies in New Zealand indicate that a small but Design & Layout: Aleck Yee government communications. important level of ethnic mobility is occurring in official Production: Alltex Design Joo-Cheong Tham describes the constraints that data collections and other surveys. The authors argue Australia applies to the fundraising practices of its that such mobility needs to be better understood by both political actors. Interestingly, he suggests that Australia’s researchers and policy makers. The article concludes comparatively tight rules on disclosing the identity of by considering some emerging ideas for handling ethnic large donors to political parties are no longer adequate mobility when undertaking policy analysis. to remove the suspicion of quid-pro-quo dealings, and that there are some moves towards placing caps on how Jonathan Boston and Andrew Geddis much donors may give. Should such moves bear fruit, they

Page 2 – Policy Quarterly – Volume 6, Issue 3 – August 2010 Andrew Geddis

The Electoral (Finance Reform and Advance Voting) Amendment Bill

While debates over what role money should play in electoral Exclusive Brethren religious sect to politics – a topic New Zealand follows the United States in fund a very expensive nationwide leaflet campaign against the Labour and Green calling ‘campaign finance’ – have occurred spasmodically in parties represented an unprecedented level of ‘parallel campaigner’ activity.1 this country, it has received an unprecedented amount of Following Labour’s narrow victory in attention since 2005. Although this article is not intended to that contest, it felt the need to reform the regulation of campaign finance to address be a general history of the what it saw to be problems exposed during topic (see instead Geddis, The 2005 election not only was closely the campaign. The result was the Electoral fought and unusually bitter in its tone, Finance Act 2007 (EFA). This legislation’s 2010b), some contextual but it also saw a number of novel primary effect was to impose limits on developments in terms of campaign the election-related advertising spending background nevertheless is financing. For one thing, both Labour and of parallel campaigners, as well as to important to understanding National spent very close to the maximum require them to register and make some election expenses permitted by law – the disclosure of their funding sources. It also the current proposals for first time both the major parties had done purported to increase the transparency of reform contained in the so. (Indeed, Labour probably exceeded donations to political parties by closing the permitted limit when the costs of some of the more egregious loopholes in Electoral (Finance Reform a parliamentary-funded pledge card the disclosure rules. are included in its total, while National This legislation attracted a large amount and Advance Voting) exceeded its broadcast allocation by failing of criticism, both of its substantive content Amendment Bill. to account for GST in its total spend, but and of the process by which it was conceived no one suffered any legal consequences for and enacted (Geddis, 2008). In particular, those breaches.) For another, the sources the rules governing parallel campaigners of each party’s campaign funds came were attacked for being overly restrictive, Andrew Geddis is an Associate Professor at the under some scrutiny, as a large amount confusing in application, and full of Faculty of Law, University of Otago. In 2008, the then Labour-led Government appointed him to of ‘anonymous’ and ‘trust-funnelled’ unintended consequences. The imposition chair an expert panel on electoral administration money poured into their coffers. Finally, of restrictions on private spending on and political party funding. the decision of several members of the election advertising, while publicly funded

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 3 The Electoral (Finance Reform and Advance Voting) Amendment Bill

parliamentary entitlements still could be the public can have confidence in the potential shortcomings that will need to used freely for election-related purposes, outcome of parliamentary elections and be addressed by the Electoral Legislation also attracted criticism. Likewise, the fact that the rules are enduring and consistent Committee. It also serves as a back- that the legislation was drawn up without across general elections’ (Ministry of ground for the following articles, which public or full cross-party consultation, and Justice, 2009, para 4). Because there is provide some international perspective on then passed into law on a bare majority fundamental disagreement as to what are New Zealand’s proposed changes. basis following a party line vote, drew the ‘right’ campaign finance rules for this accusations of partisan intent that are country, an approach which effectively Changes to the regulated period undesirable in the context of electoral law. says ‘all (or nearly all) must first agree for Perhaps the most important proposed Given the vitriol that the National Party any change to occur’ necessarily will have change is one that was incorporated into poured upon the EFA during its passage a strong status quo bias. That said, this the bill at a very late stage, certainly after it through the House and subsequently, the conservative reform approach probably was signed off by Cabinet late last year. As repeal of much of the legislation’s content was required politically because of the it stands, the bill changes the definition of following its victory in 2008 was entirely National Party’s trenchant criticism of the ‘regulated period’ from the traditional three months before polling day. This definition matters, as the legal constraints ... one of the reasons given for not revisiting on campaign spending by candidates and parties apply only during this period, so these rules is that it would subject the whole if it is shortened (or lengthened), then regulatory scheme to scrutiny under the those constraints become less (or more) intensive. The bill instead defines the New Zealand Bill of Rights Act 1990 – scrutiny regulated period as beginning the day after ‘default day’, with this date falling three that it probably would fail ... months before the latest possible date an election could be held by law. However, if the prime minister announces the predictable.2 What was surprising, perhaps, the EFA’s passage in the face of significant election date before default day, then the was that all the other parties in parliament opposition from other parliamentary regulated period starts the day after that (with the exception of the Greens) joined parties. announcement; unless the announcement National in supporting repeal. While this However, a consequence of this is made more than three months before move indicated widespread acceptance approach is that some issues remain polling day, in which case it starts three that this legislation had not worked well completely untouched, despite posing months prior to the latter date. in application, it did not answer the some pretty major problems. For The intent of this change is to avoid question of what rules instead ought to be example, the regulation of broadcast having a regulated period that applies adopted. election advertising will not be changed retrospectively (as New Zealand elections Learning from Labour’s previous (Geddis, 2003). Political parties still may often take place with less than three errors, the government established a two- spend only as much on television and months advance notice). While political stage public consultation process to guide radio advertisements as the Electoral parties and their candidates may be it on this issue.3 That consultation process Commission gives to them pre-election able to manage the risks associated with spawned a set of recommendations from through the broadcast allocation. Parallel retrospective regulation, the imposition of the minister of justice to Cabinet, which campaigners will remain barred from new rules on parallel campaigners during then agreed to a series of legislative airing overtly partisan messages in the the regulated period (see below), as well proposals (Cabinet, 2009). Those legisla- broadcast media. Rather worryingly, one as the possible future harmonisation tive proposals have come before the House of the reasons given for not revisiting of parliamentary funding rules with in the form of the Electoral (Finance these rules is that it would subject the private campaign finance law (see below), Reform and Advance Voting) Amendment whole regulatory scheme to scrutiny increases concerns over this matter. Bill, presently under scrutiny by a specially under the New Zealand Bill of Rights Act However, the desirability of the constituted, all-party Electoral Legislation 1990 – scrutiny that it probably would fail precise form of the proposed change is Committee. (Ministry of Justice, 2009, para 82). questionable. For one thing, determining Nevertheless, the bill obviously the latest possible date on which an The bill’s approach to reform contains some amendments to the current election can be held is not straightforward, The bill does not propose very much law. The following is not intended to be as it depends in part upon administrative change to existing law. This fact may be a complete discussion of the proposed requirements such as leaving time for largely attributed to the government’s reforms. Rather, it outlines the broad the return and count of special votes overall approach to the issue: creating intent of a number of the more notable and holding judicial recounts. More law ‘based on broad consensus so that aspects of the bill, as well as indicating some significantly, the change has the potential to

Page 4 – Policy Quarterly – Volume 6, Issue 3 – August 2010 significantly shorten the regulated period, similar to the one contained in the EFA. Changes to the regulation of parallel especially where the prime minister calls It may capture a slightly narrower range campaigners an early election. This step could give the of expressive forms – only applying to The EFA’s controversial imposition of incumbent party a significant advantage, ‘advertisements’, rather than to ‘any form limits on how much individuals or groups as only it will know when the regulated of words or graphics’ – but the same types not directly contesting the election could period will commence – thus enabling it of messages are covered. However, the spend on election advertising make this to spend significant amounts just before freedom of expression concerns involved the bill’s most contentious issue. In earlier that date without these counting towards with that earlier legislation are not as proposal documents, the government the party’s limited ‘election expenses’. It sharp in the context of this bill. For one appeared open to reintroducing spending should also be noted that shortening the thing, the proposed regulation of election limits, albeit at a far higher level than under regulated period, especially in a way that advertising by parallel campaigners is the previous legislation. However, that may benefit the incumbent party, was less extensive under this bill (see below). option was rejected by Cabinet, with ‘no not a proposal which gained widespread For another, the Electoral Commission consensus’ and ‘strong opposition’ cited as support during the public consultation is under a duty to provide advice as to the reason (Ministry of Justice, 2009, para preceding this bill. whether a particular communication 77). Instead, the bill simply requires any There seems no easy solution to the constitutes an election advertisement, with ‘promoter’ of an election advertisement problem of avoiding retrospectivity reliance on that advice then providing a who intends to spend more than $12,000 whilst also negating any possible partisan defence against any future prosecution on election advertising during the advantage. However, one possible response would be to fix the election date in law as being (say) the third Saturday in November, with the regulated period to ... transparency will only work if registration commence three months (or 90 days, to actually reveals who is behind the advertising. be neater) prior to this date. To deal with the problem of a required early election Consequently, the definition of ‘promoter’ and the – such as where the government loses the confidence of the House – this date details that such persons (be they natural or legal) could be altered only by a resolution of must provide to the Electoral Commission become the House. In other words, the power to decide the election date should be taken very important. from the hands of the prime minister and placed with parliament. (see below). Consequently, the Electoral regulated period to first register with the Changes to the definition of ‘election Commission will, on a case-by-case basis, Electoral Commission. There will be no advertisements’ resolve much of the uncertainty regarding limit on what such promoters can spend The bill contains a new definition of what how the provision is to apply. on election advertising, no requirement constitutes an ‘election advertisement’ Having said that, although the to disclose what they spend on election (and hence the sorts of communications definition of election advertising excludes advertising and no requirement to disclose that fall under regulatory control if they a range of messages from its ambit (such where their funding comes from. are ‘promoted’ within the regulated as news reportage and commentary), The idea is that a central register of period). The definition has the following there is no exception for communications big-spending parallel campaigners will important features: internal to a group or company as existed improve transparency, by providing ‘a • it covers ‘an advertisement in any under the EFA. Therefore, election-related central point where [their details] … medium’, as opposed to the current messages from a union’s executive or a could be readily accessed by the public and definition which applies only to company’s directors to their members or the media’ (Ministry of Justice, 2009, para publication in traditional, print-based shareholders could be deemed election 75). Individual election advertisements media such as newspapers, billboards advertisements, and thus fall within the from such sources will also have to carry and handbills; regulatory reach of the bill. It is question- the name and contact details of their • it covers both ‘express advocacy’ (i.e. able whether such a limit (albeit mild) promoter. However, transparency will only messages that explicitly call for a vote upon freedom of association is justified: work if registration actually reveals who for or against a named candidate or what pressing and substantial interest is behind the advertising. Consequently, party) and ‘fake-issue advocacy’ (i.e. is there in regulating how members of a the definition of ‘promoter’ and the messages that call on voters to vote for voluntary group communicate amongst details that such persons (be they natural or against an issue closely connected themselves about an upcoming election? or legal) must provide to the Electoral with an unnamed party or candidate). Commission become very important. Interestingly, this definition is very The bill’s present definition is not clear

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 5 The Electoral (Finance Reform and Advance Voting) Amendment Bill

as to exactly who qualifies as a promoter, parallel campaigners to run predominantly to avoid future confusion by largely especially where an election advertisement negative advertising campaigns at election codifying the court’s decision, ensuring is produced and paid for by a group rather time. that the legislative language and judicial than an individual. This issue will need understanding clearly match. clearing up if registration and labelling is Changes to the limits on political party and to achieve its desired goal. candidate election spending Changes to the disclosure of donations to The bill’s relatively relaxed regulation of As intimated earlier, this issue largely political parties parallel campaigners must also be viewed remains untouched. Spending limits The current rule that the identities in the light of the ongoing regulation will continue to apply only to the costs only of individual donors giving more of political parties. As discussed below, associated with election advertising (thus than NZ$10,000 to political parties the existing spending limits on political excluding campaign activities like travel, or NZ$1,000 to individual candidates parties’ election advertising will be opinion polling, hiring consultants and must be disclosed to the public will retained. And, as noted earlier, at both the the like) undertaken within the regulated not change. However, parties will have 2005 and 2008 elections this limit actually period. These limits will be inflation to release additional information, in constrained the National and Labour indexed, but only back to the 2008 terms of the amount of donations they annually receive within fiscal bands: less than $1,000; $1,000–$5,000; $5,000– $10,000. This innovation provides a Regulating private campaign financing without useful extra measure of transparency and further illustrates how political parties taking into account the extensive state subsidies increasingly are becoming recognised provided to parliamentary parties and their members as quasi-public organisations (Geddis, 2009). Furthermore, the bill contains an of parliament to enable them to do their jobs as ‘associated persons’ test to further tighten loopholes in existing disclosure law by representatives gives incumbents an undesirable requiring donations from related parties advantage. to be bundled together and disclosed once they exceed $10,000. However, the efficacy of this measure is undermined by parties’ activities, in that each spent as election.5 It is only in the last couple of allowing the political party’s secretary to much on election advertising as the law election cycles that the limits on parties describe the bundled donations however permitted. Consequently, if the largest have had more than notional application, he or she chooses, so all the public may parties literally cannot spend any more while there is little evidence that the get to see is that some group of entities on advertising, there will be an incentive spending limit on individual candidates is called ‘Associated Donors’ gave the party to farm out advertising spending to stifling competition in electorate contests. a certain sum of money the previous year. individuals or groups not subject to limits. However, as noted above, the fact that the Furthermore, missing from the Note also that there is nothing in present limits impose a real constraint on parties’ bill is any definition of what actually (or the proposed) law to stop political and candidates’ advertising activities does constitutes a donation. For example, if a party officials coordinating a parallel generate incentives to redirect spending union expressly agrees to spend money on campaigner’s advertising campaign with into less regulated areas, such as by parallel advertising in support of a party, is that their own. Consequently, there is good campaigners. a ‘donation’? Equally, if a political party reason to expect more such spending from charges money to meet with a minister, parallel campaigners in future elections, Changes to election expenses apportionment does that meeting have a value all of its own whether genuinely independent or linked The bill contains a number of provisions or is it a ‘donation’? These questions will to parties and their candidates. which set out how election expenses arise, and without a legislative indication Finally, existing law requires parallel related to advertising that promotes both a of the answer they will be resolved by the campaigners who wish to campaign for a candidate and his or her political party get Electoral Commission (and eventually the political party or candidate to obtain that apportioned between the two campaigns. courts). party or candidate’s written permission, These provisions are motivated by a giving them an effective veto over such High Court decision in an election Changes to the use of parliamentary funding messages.4 Election advertisements that petition brought in the wake of the 2005 This is an overdue move, albeit one that oppose a political party or candidate do election.6 That decision interpreted and is largely phrased in terms of ‘more work not require such authorisation. The bill applied the existing apportionment rules will be done in this area’ (Ministry of retains this distinction regarding how in a way that differed from the advice Justice, 2009, para 95). Regulating private each form of electoral speech is treated. given to candidates by the chief electoral campaign financing without taking into This is a disappointing move, as it requires officer before polling day. The bill seeks account the extensive state subsidies

Page 6 – Policy Quarterly – Volume 6, Issue 3 – August 2010 provided to parliamentary parties and their However, it is questionable whether the financing, it does not dramatically members of parliament to enable them bill as written will achieve these objectives. alter that regulatory framework’s basic to do their jobs as representatives gives At present, it appears to be assumed that structure. For that reason, the bill can be incumbents an undesirable advantage. reliance on the commission’s advice described as a conservatively reformist It is encouraging that the government means that a person cannot subsequently measure. However, while this regulatory appears serious about harmonising the be found to have ‘wilfully’ contravened approach may draw some of venom rules that apply to these two forms of various prohibitions in the bill, hence from the debate around the bill, it does political funding. cannot be found guilty of an offence that mean that a number of issues remain requires this mens rea. Whether the courts open for future debate. In particular, the Changes to the responsibilities of the necessarily would take the same view of vexed issue of election advertising via the Electoral Commission the matter is debatable. Furthermore, broadcast media and the way in which The bill will require the newly restruc- good faith reliance upon the commission’s the broadcast allocation rations access tured Electoral Commission to provide advice as to whether a particular message amongst the political parties still requires advisory rulings to parties, candidates and is an election advertisement should be a attention. The shift to digital broadcasting the public as to whether a particular message complete defence against any allegation and the growth of the internet mean that constitutes an ‘election advertisement’. in any election petition that a candidate the Broadcasting Act 1989 as a whole is Furthermore, the government intends committed a ‘corrupt practice’ by spending becoming outdated (Geddis, 2010a), while that good faith reliance on this advice more than the statutory maximum on the specific measures designed to prevent will provide a defence against any future election expenses. At present the bill does ‘unfair’ access to the airwaves create a pro- prosecution for breaching electoral law not explicitly state that this is the case. incumbent bias that cannot be justified (Ministry of Justice, 2009, para 92). In Finally, the bill requires that the in an MMP environment (Geddis, 2003). other words, the commission’s word on commission treat as confidential any Consequently, it can be confidently the matter will be final, at least as far as an proposed advertising messages on which predicted that the bill currently before individual inquirer is concerned. it is asked to advise, as well as any advice the House will not be the final word on The reason for this innovation is that it gives, until after the election process campaign financing in New Zealand. because campaign finance regulation is completed. This is undesirable, as 1 In this article I will use the government’s currently preferred contains grey areas of application and it will hamper the development of a term ‘parallel campaigner’ in place of the previously used generates political incentives to accuse publicly available set of rulings from the ‘third party’. Either term refers to the election-related activities of individuals or groups interested in affecting the rivals of breaching the rules, it is desirable commission that may guide other electoral outcome of, but not directly contesting, the vote themselves. 2 In point of fact, the repeal was limited to those parts of the to allow the administrative agency to issue participants. More preferable would be legislation that imposed restrictions on parallel campaigner immediate rulings that can be relied on. a requirement that any person seeking activities. The new rules governing the disclosure of donations to political parties were retained in effect. The courts can still review the ‘correctness’ advice inform the commission when they 3 This consultation process is outlined at http://www.justice. of any ruling as a matter of law, but the intend to publish the advertising message, govt.nz/policy-and-consultation/electoral/electoral-finance- reform/. immediate recipients can be sure that with the commission only under a 4 If parties or candidates agree to allow the spending, they must account for it as part of their own election expenses. they will not suffer later consequences for confidentiality obligation until that point 5 The proposed limits on political parties are thus $1.015 relying on a ‘wrong’ bit of advice. This will in time. million + NZ$20,300 per electorate seat contested (to a maximum of NZ$2.436 million), while individual candidates permit the election campaign to proceed have a $20,300 limit on election expenses. in certain waters, rather than causing Issues for the future 6 Peters v Clarkson [2007] NZAR 610. participants to trim their sails for fear of While the bill makes a number of getting caught in an unexpected judicial changes of varying significance to gale. New Zealand’s legal control of campaign

References Geddis, A. (2010a) ‘Broadcast media, political speech and the “Rupert Cabinet (2009) ‘Minute of decision: campaign finance reform package’, Murdoch problem”’, in K. Ewing, J. Tham and J. Rowbottom (eds), CAB Min (09) 45/10 The Funding of Political Parties, London: Routledge (forthcoming) Geddis, A. (2003) ‘Reforming New Zealand’s election broadcast regime’, Geddis, A. (2010b) ‘Debating election finance reform’, in R. Miller (ed.), Public Law Review, 14, pp.164-82 New Zealand Government and Politics, 5th edition, Auckland: Oxford Geddis, A. (2008) ‘New Zealand’s Electoral Finance Act 2007 and its University Press discontents’, Public Law Review, 19, pp.215-33 Ministry of Justice (2009) ‘Electoral finance reform package’, advice Geddis, A. (2009) ‘The legal status of political parties under MMP’, attached to CAB Min (09) 45/10 New Zealand Journal of Public and International Law, 7 (1)

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 7 Jacob Rowbottom Financing Political Parties in the United Kingdom Shortly after the 2010 general election in the United that candidates can spend during their campaigns. That law attempted to combat Kingdom, the new Conservative/Liberal Democrat coalition problems of bribing and treating voters by government promised to reform the way British political capping the amounts spent. While subject to amendment, this legal framework for parties are financed and ‘to remove big money from politics’. regulating election spending remained in place during the 20th century. These Such promises are not new, and in the last decade there has controls limited only spending in relation been no shortage of legislative action on party funding. to specific candidates and did not cap spending to promote the election of a The problem has been that the laws failed to address some political party generally. As election campaigns became of the biggest concerns about money in politics, and that increasingly centralised and focused on the political actors found strategies to avoid the controls. the national party, the shortcomings of the framework became obvious. An indirect Looking at the UK approach, this article aims to give an control on spending by political parties at overview of the controls in place, while highlighting some the national level was, however, achieved through the regulation of the broadcast of the main difficulties experienced. While the UK laws media, which prohibited paid advertising for political messages. Denying political have some differences compared with those proposed parties the option of spending money on in New Zealand (particularly in relation to third-party television advertisements, often a major expense in other jurisdictions, helped to activity), there is much common ground and the British restrain the cost of elections. experience may offer some lessons and show some of the The regulatory framework was subject to a major overhaul in the Political pitfalls in regulating political finance. Parties, Elections and Referendums Act 2000 (PPERA). This legislation sought to Election finance in the UK has been address concerns about an ‘arms race’ of regulated since the Victorian era. The economic resources between the major controls on election spending have political parties and the dependence on their roots in the Corrupt and Illegal large donors. The PPERA introduced Jacob Rowbottom is a university lecturer and Practices Act 1883, which was the first spending limits for political parties in Assistant Director of the Centre for Public Law, King’s College, University of Cambridge. statute to impose a limit on the amount the campaign period, which were added

Page 8 – Policy Quarterly – Volume 6, Issue 3 – August 2010 to the existing restrictions on candidate opposition parties lack this advance spending. It also brought about greater knowledge and may therefore be caught transparency by requiring the disclosure In the 2010 general off-guard by a snap election. An opposition of donations to political parties and party that mistakenly anticipates an registered third parties above a certain election, the maximum election being called on a particular day threshold. At the time of writing, the may also deplete its resources campaigning British framework for regulating political amount that could be for an election that is not called. The finance includes: spent by a political new coalition government’s proposal for • limits on electoral expenditures during fixed-term parliaments in the UK should, the campaign period by candidates, party contesting all however, address these concerns. political parties and third parties; The overall limit on party spending • disclosure of donations above a 632 seats in Great Britain varies according to the number of seats specified amount to parties, candidates was £18.96 million. being contested. In the 2010 general and registered third parties; election, the maximum amount that could • a ban on all political advertising in the be spent by a political party contesting all broadcast media. 632 seats in Great Britain was £18.96 million. Even with these measures in place, The cap has been subject to criticism from the PPERA has not ended the concerns party funding scandals is unsurprising, some quarters on the grounds that it is set about party funding in the UK. The last and may be a sign that it has raised too high and still allows for an arms race decade has seen numerous scandals and ethical standards and expectations rather between parties. Consequently, some have controversies surrounding donations to than reflecting a decline in politicians’ called for the maximum expenditure limit political parties. Most notable has been the integrity. to be reduced to £15 million. Another line ‘loans for peerages’ controversy, in which it If the New Zealand reform proposals of criticism is that the limits apply only was alleged that donations and loans to the are enacted, the British experience suggests in the year prior to an election. While a Labour Party had secured nominations for that the controversies and concerns will 12-month regulated period seems lengthy, honours. Other controversies have focused continue for as long as parties rely on calls have been made to extend the on allegations that donations secured private sources of funding. Reforms are controls and impose annual caps on party government contracts and of donations likely to be followed by calls for more spending outside election years. This being channelled through intermediaries reform. This is not, however, an argument would curtail pre-election spending by to avoid the transparency rules. Even for inaction. Public ignorance would have parties which can arguably have a greater where the donors have been cleared of avoided the scandals and speculation over long-term impact on voters. any wrongdoing after investigation, such the last decade, but the democratic process The second tier of spending controls is episodes have fuelled speculation and led would have been worse off for it. With imposed on the candidates, who are limited to further calls for reform of the party this background in mind, the remainder to spending £7,150 plus an additional 7 or funding laws. of this article will look at some of specific 5 pence for each person on the electoral The continuing controversy need not difficulties that have arisen in the British roll in the constituency. The limits on be seen as a failure of existing laws, but as system. To do this, the various types of candidate election expenses are applicable a sign of some success. Making the parties’ regulation will be discussed in turn. for a shorter period of time, namely from sources of income more transparent will the dissolution of parliament, leaving a often generate suspicion that a donor Spending limits campaign period of roughly four weeks. received a political favour in return for the The UK has two tiers of spending control. The dual tiers of regulation created contribution. The legislative framework is The first tier applies to spending by some complexity and led to a number of also complex and detailed, which means candidates and the second tier to political difficulties (Rowbottom, 2010, pp.117-212). there are now more rules for politicians to parties. The spending limits for political First, the line between candidate and party fall foul of and consequently controversies parties are in place for the 12 months prior spending is difficult to draw, as activities are more likely to arise. For example, to a general election, and four months to support a party can benefit candidates media attention often focuses on whether prior to elections for devolved assemblies and vice versa. It can therefore be unclear a donation was properly disclosed to and the European Parliament. In the case under which set of spending limits an the Electoral Commission or whether a of general elections this obviously creates item of campaign expenditure should fall, permissible donor made the donation. some uncertainty, as the date of the election and campaigners are advised to consult Prior to the PPERA, politicians were under is normally announced weeks prior to the the Electoral Commission for guidance. no legal duty to disclose donations and polling day. This currently gives the party Secondly, the short duration of the allegations about the sources of funding in government an advantage (given its regulated period for candidate spending relied simply on political argument rather power to dissolve parliament), as it will provided an incentive for higher spending than on a specific legal provision. That the be able to plan its finances knowing the to take place in key constituencies prior PPERA has resulted in a proliferation of election date in advance. By contrast, to the dissolution of parliament. The

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 9 Financing Political Parties in the United Kingdom

significance of this trend is underlined campaigning by candidates. To count as to freedom of expression under article 10 by research from political scientists ‘election material’, a publication need of the European Convention on Human highlighting the importance of local not expressly refer to a political party or Rights in 1999.2 activity to electoral outcomes (Johnston candidate (s.85(4)). Guidance published In addition to the spending controls, and Pattie, 2010). To address the concern by the Electoral Commission states registered third parties (i.e. those going that large sums were being channelled to that material campaigning on a policy over the £5,000 or £10,000 spending marginal constituencies shortly before an which happens to be associated with one threshold) have to disclose donations election was called, a new set of spending political party counts as ‘election material’, received of over £7,500 from a single limits was enacted in 2009 to cap candidate as does material ‘publicising the names of source that are made to pay for the election spending in the months prior to the candidates who have a particular view on material. Donations to a third party that dissolution of parliament (the so-called an issue such as hunting or education’ go into general funds and are not to be ‘long campaign’).1 (Electoral Commission, 2010, para 2.5). used for campaigning do not have to be Consequently, there is no ‘magic words’ disclosed. One question is how easily Third-party spending limits requirement to distinguish electoral can that line be drawn? The third parties The controls on political party spending expression from ordinary political do not have to make donations out of a would be undermined if third parties speech. The controls do not apply to segregated political fund, so it may not could spend without restraint. To prevent communications to members within an always be clear which donations have been political money being channelled to groups given to cover the cost of election material. other than the formal political parties, As of June 2010, only 21 donations to third spending limits are applied to third-party While it may have been parties have been disclosed to the Electoral campaigns. Like the party spending limits, Commission since 2001. The transparency there is a two-tier system, with one set of thought that caps on regime therefore sheds a small amount of limits on campaigning in support of the light on who bankrolls the third parties. party and another on campaigning for a political party spending Currently, there are only 32 registered particular candidate. would encourage more third parties, consisting largely of pressure Third parties that wish to spend over groups and trade unions. At the 2005 £10,000 in England or over £5,000 in sums to be channelled to general election, 25 registered third Scotland, Wales or Northern Ireland on parties submitted returns for electoral ‘election material’ during a regulated independent bodies, the expenditures, of which two spent over campaign period must register with the experience so far shows £100,000 (the trade union Unison spent Electoral Commission. Spending by £682,115 and the Rural Action Group spent registered third parties in the 12 months that this has not been a £550,370). The total amount spent by all before a general election is capped registered third parties in 2005 totalled £1.7 at £793,500 in England, £108,000 for significant problem. million. While it may have been thought Scotland, £60,000 in Wales and £27,000 that caps on political party spending would in Northern Ireland. Two or more third encourage more sums to be channelled to parties working together in a campaign independent bodies, the experience so far cannot aggregate their spending limits, shows that this has not been a significant and the spending by all the third parties problem. One explanation may be that on a co-ordinated campaign would count the caps on party spending are sufficiently towards the expenditure limit of each. generous that such strategies are not For the third-party controls, ‘election organisation, ‘provided that the material necessary. Alternatively, it may be that material’ is defined as material ‘which relates to an issue within the aims or much political spending by third parties can reasonably be regarded as intended’ objectives of the organisation’ (Electoral does not count as ‘election material’ and to ‘promote or procure the electoral Commission, 2010, para 3.8). A union thereby falls outside the controls. success’ or ‘enhance the standing’ in an sending material to its members assessing There is much independent activity election of a political party, or of parties a party’s industrial relations policy would that appears to take place outside the and candidates who ‘advocate (or do not therefore fall within the controls. third-party controls, three examples not advocate) particular policies’. The In relation to expenditures in support of which will be given here. The first is promotion of a party’s electoral success of a particular candidate, third parties can political campaigning by newspapers and or standing also includes ‘prejudicing the spend only £500 in the formal campaign broadcasters, which are exempt from the electoral prospects at the election of other period (beginning with the dissolution of controls. While broadcasters are subject to parties or candidates’ or ‘prejudicing the parliament) (Representation of the People legal regulation requiring news and politics standing with the electorate of other Act 1983, s.75). An earlier version of the to be covered with ‘due impartiality’, parties or candidates’ (PPERA, s.85). As law had limited third-party expenditures newspapers are free to engage in partisan a result, the provision covers negative to £5, but was found to violate the right advocacy. In Britain there is a long history

Page 10 – Policy Quarterly – Volume 6, Issue 3 – August 2010 of the national press having partisan a forum for Labour Party activists which £7,500. Donations must be made by attachments and seeking to influence is funded through donations, sponsorship a ‘permissible donor’, which includes elections. The press thereby occupies a and advertisements. Similarly, Left companies, unincorporated associations privileged position, which allows it to use Foot Forward provides a forum for and trade unions, as well as individuals its resources to influence an election in a ‘progressives’. According to the website it on the electoral register (s.54). The 2000 way that would not be permitted of any is non-partisan, but the title of the blog Act provides that where there is an agency other organisation. suggests where its loyalties lie and it was relationship, in which one person receives The second example is policy work by launched with help from the Labour Party money to be passed on as a donation to think tanks, which can play an influential members’ organisation Progress and from the party, the identity of the original role in election campaigns and in political some Labour Party donors. source of funds must be disclosed. The debate more generally. The think tanks In addition to this, many leading register of donors to political parties are independent entities, but clearly individual bloggers have links with and third parties can be accessed on the have political effects by promoting the political parties. The websites are Electoral Commission website and aims particular issues and producing research not, however, covered by the same to promote transparency by revealing that may support a party’s stance and exemption that applies to broadcasters the sources of income. By making such lend it some credibility from seemingly information public, the hope is that deals independent experts. For example, the between donors and politicians will be Institute of Public Policy Research is a discouraged, given the threat of adverse registered charity, but is often seen as a At the time of the PPERA’s publicity. testing ground for Labour Party ideas. enactment it was thought The regulation of donations has, The Taxpayers’ Alliance, a charity which however, faced a number of difficulties campaigns for lower public spending a donation cap would be where devices can be used to evade and taxation, has become increasingly the spirit if not the letter of the law. influential in Britain and receives much too great an interference First, and most notably, in the ‘cash media attention. While maintaining its with the freedom of parties for honours’ scandal individuals gave independence, it is often associated in the funds to political parties as loans, not as press with the Conservative Party. or donors, and that the donations. Under the original terms of the Although think tanks are not formally PPERA, commercial loans did not have exempt from electoral finance controls, spending caps would to be disclosed. Much debate at the time much of what they produce will not count curtail the demand for concerned whether the loans given by the as ‘election material’ and thereby falls individuals were really on commercial outside the ambit of regulation. In such money in any event. terms. However, the law has since been circumstances the think tank does not amended so that commercial loans also have to disclose donations received. This have to be disclosed (PPERA, part IVA). means that think tanks can provide an A second area of controversy concerns ideal location for political funds where the donations given by institutions. Com- donor does not want his or her identity panies that carry on business in the UK to be disclosed. In one recent lobbying and unincorporated associations whose scandal, a former minister advised an and newspapers. Consequently, some of activities are based in the UK can donate undercover journalist posing as a lobbyist the spending by these websites that are money to a political party (PPERA, s.54).4 to donate money to a think tank as a engaged in electoral campaigning could In the absence of an agency agreement, the way of securing access to ministers, but potentially come within the third-party company or unincorporated association without attracting public attention. spending limits. It is not clear whether is recorded as the donor. This means that A third example is political activity the various online campaigners will spend while an individual who is not on the on the internet, which is an increasingly enough on election material to require electoral register cannot make a donation, important way that third parties can registration. However, those larger sites a UK-based company owned by that influence an election campaign. While that employ one or more people full time individual can give money. Institutions outside the formal party organisation, could well meet the threshold. can also undermine the transparency many political blogs and websites requirements, as it may not be known who have a party allegiance. Most notably, Donations or which interests are behind the company ConservativesHome is a website aiming to Donations above a certain threshold or association making the donation. This provide a forum for grassroots members, to the political parties, registered third problem was to some extent addressed founded by Tim Montgomery, a former parties and other regulated bodies have to by a requirement that an unincorporated Conservative Party aide, and in 2009 Lord be disclosed to the Electoral Commission association disclose donations it receives Ashcroft (a leading party donor) bought (PPERA, s.62).3 For donations to a of over £7,500.5 However, concerns about a majority stake in the site. LabourList is central political party, the threshold is transparency still arise in relation to

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 11 Financing Political Parties in the United Kingdom

companies, which do not have to disclose and candidates, and it applies to political complaints that the smaller parties are their sources of income. messages generally, as opposed to just treated unfairly. The UK does not impose a limit on electoral messages. The televised debates between the the amounts that can be donated to a The ban has come under criticism from leaders of the three main political parties, political party. At the time of the PPERA’s a number of academic commentators, in held for the first time in 2010, added a new enactment it was thought a donation cap particular in the light of two rulings from dimension to the issue. The debates proved would be too great an interference with the the European Court of Human Rights to be the most high profile campaign freedom of parties or donors, and that the which found similar bans in Switzerland ‘event’ and played a central role in giving spending caps would curtail the demand and Norway to be in violation of the right the Liberal Democrats greater exposure. for money in any event. This relaxed to freedom of expression under article 10 Unsurprisingly, the smaller parties argued approach to donations did not last and of the European Convention.6 However, in that the broadcasters’ inclusion of the the absence of a donation limit has been 2008 the House of Lords declined to declare leaders of only the Labour, Conservative the cause of much controversy in the last the ban incompatible with the European and Liberal Democrat parties was a breach decade. Individuals have made a number Convention.7 Unlike the Strasbourg of the impartiality obligations. However, of very large donations, some in excess when faced with that argument, a Scottish of £1 million. Institutions have also made court declined to issue an injunction large donations. For example, in 2005 the restraining the broadcast of the third company 5th Avenue Partners gave £2.4 While regulations are a leaders’ debate a week before the election.8 million to the Liberal Democrats; between necessary and important This type of issue is one faced whenever 2003 and 2009 Lord Ashcroft’s company a subsidy, in this case media access, is to Bearwood Corporate Services donated part of a fair process, one be allocated among political speakers over £5 million to the Conservative Party; and raises difficult questions about the and between 2007 and 2009 the trade lesson from the UK is that appropriate threshold for inclusion. union Unite donated over £11 million to there are limits to what the Labour Party. Parliamentary funding The major political parties are such legal controls can The central issue with parliamentary committed to some reform of donations, funding in the last year has been the at least to the extent of considering achieve. expenses scandal, in which the Daily whether a cap should be imposed. Yet Telegraph published leaked details of if such a cap is introduced there will be the expenses claimed by MPs. Following difficult questions about the level at which this, the system for allowances has been it should be set, how it should apply to reformed and a number of MPs have been institutions, and how the techniques found to be in breach of the rules and of evasion can be avoided. These issues have made repayments. A small number of detail and design are likely to be the Court, the House of Lords found a ban to have also faced criminal prosecution. main barriers to an agreement on reform be a proportionate measure to protect the Possibly the biggest effect has been the among the parties and have been the main integrity of the electoral process. While political backlash, with a large number of sticking points in previous negotiations. upholding the legislation, two of the lords MPs standing down at the 2010 election. expressed a willingness to consider future While the expenses scandal focused on Broadcasting challenges to the application of the ban, allegations that MPs had gained personally All broadcasters, both publicly and for example where it has a discriminatory through the expenses, there have also been privately owned, are required to cover effect. This might arguably arise where concerns about parliamentary funds being politics and current affairs with ‘due the ban prevents a political group, such channelled to political parties. impartiality’ (Geddis, 2010). A stricter as an environmental organisation, from One way parliamentary funds can end set of rules applies in the context of an advertising in response to a commercial up in a party treasury is by the allowance for election, where the broadcasters have to advertisement by an oil company. an MP’s office being used to rent space from go to greater lengths to treat parties and Aside from the ban, political parties are the party headquarters in the constituency. candidates fairly. Political advertising in entitled to free time on the public service In November 2009, the Committee on the broadcast media is prohibited. The ban broadcasters. In a general election, at Standards in Public Life concluded that is broader than its New Zealand equivalent least one broadcast is allocated to parties such a practice should not be prohibited, as and prohibits advertisements ‘directed contesting one sixth or more of the seats there was little evidence of abuse. Instead, towards a political end’, and by anybody up for election. While this allows parties such arrangements are now subject to an ‘whose objects are wholly or mainly of a with no MPs to access the mass media, audit by a qualified independent assessor political nature’ (Communications Act the larger political parties are normally to ensure the market rate for the premises 2003, s.321). Consequently, it applies to allocated more slots on television and is not exceeded.10 While this ensures that all political groups and not just parties there have been (albeit unsuccessful) legal public funds are not misused, the practice

Page 12 – Policy Quarterly – Volume 6, Issue 3 – August 2010 does give the party with a sitting MP a ministerial press conference. Similarly, limits to what such legal controls can regular source of income. the use of civil servants in developing achieve. The law is targeted at electoral A second route is through the government policies will provide an activities, which are just one part of use of parliamentary allowances for advantage when defending those policies political process. Even with these rules in communications to voters. MPs have in the electoral arena. It is likely that place, considerable power still lies with allowances for informing constituents and incumbents will also receive greater media those who control the infrastructure of replying to messages. The rules provide attention in the coverage of political political communications, such as the that such allowances are not to be used events. The benefits of being in office are mass media and the think tanks, which for partisan purposes. For example, party thus very hard to regulate through any provide a channel for economic resources logos and slogans should not be used in strict rules. While it is important to police to influence politics outside the legal material funded through the allowances. the system to avoid clear abuses, a fair regulations. All the main political parties However, the line between an MP process may also require that opposition promised reform in their 2010 election informing constituents of his or her work parties and those not elected receive some manifestos and the new government may and the use of such resources to persuade support to offset some of the advantages have the political capital to push through or promote his or her re-election is a of incumbency.12 a new set of reforms, just as Labour did difficult one to draw. Political references in its early years. Yet even if it does, it is will sometimes be necessary to explain a Conclusion unlikely that the issue will go away. particular stance to a constituent, and even The controls on political donations and 1 Spending by individual candidates in the five months prior those communications that merely raise party expenditures in Britain have not yet to the dissolution of parliament is now limited to £25,000, the MP’s profile potentially contribute to been in force for a decade, but have been with an additional sum for each person on the electoral roll in the constituency. The long campaign limits come into 11 a re-election campaign. subject to regular revision. Part of this effect after the parliament has been sitting for four years and seven months. If an election is called much earlier, then the Third, there is a practice known as relates to the complexity and technical pre-campaign limits do not apply. ‘tithing’, in which MPs and councillors nature of election regulations. Unforeseen 2 Bowman v UK (1998), 26 EHRR 1. See also R v Holding [2005], EWCA Crim 3185. are asked to contribute a percentage of problems inevitably emerge once a new 3 This includes a series of smaller donations given over the their salary to their political party. This framework is in place and loopholes same year, the aggregate of which exceeds the threshold. 4 Companies must be registered under the Companies Act is not an improper use of public funds, need to be closed. The complexity is not 2006 and incorporated in the EU. 5 If the association is to make donations of over £25,000 in a as it is merely a donation coming from helped by the new framework having year. the representative’s salary (albeit that it been superimposed on the longstanding 6 VgT Verein gegen Tierfabriken v Switzerland (2002), 34 EHRR 4 and TV Vest As & Rogaland Pensjonistparti v is demanded by the party as a condition candidate expenditure limits that were Norway (2008), 48 EHRR 120. 7 R (on the application of Animal Defenders International) of membership). However, like the use introduced in the Victorian era. However, v Secretary of State for Culture, Media and Sport [2008] of communications allowances, this the calls for reform are not just due to UKHL 15. 8 Scottish National Party [2010], CSOH 56. However, approach means that parties that are difficulties in design, but are also based compare Houston v BBC [1995], SC 433. already in power attract further resources, on policy considerations. These include 9 See the 12th report of the Committee on Standards in Public Life, MPs’ Expenses and Allowances (2009, Cm which help them stay in power. The demands to cap donations to parties and 7724) at [7.14-15], finding that this issue requires further investigation before any further steps are taken. danger is that such practices can reinforce to extend the spending limits to cap party 10 Independent Parliamentary Standards Authority, The MPs’ the status quo. expenditures on an annual basis. These Expenses Scheme (2010, HC 501) at [9.7]. 11 For discussion of the difficulties, see House of Commons These issues are connected with a demands have largely been fuelled by Standards and Privileges Committee, Use of Pre-paid Envelopes and Official Stationery (HC 1211 2008). much broader issue about the advantages the numerous scandals, which have often 12 For example, opposition parties in parliament receive Short enjoyed by incumbents. There are many come to light as a result of the increased and Cranborne money, which recognises that some public funds should be allocated to offset some of the advantages of rules stating that government property and transparency in the UK’s political incumbency. resources should not be used for ‘political funding. purposes’, yet it is difficult to define just While regulations are a necessary what these are. For example, inevitably and important part of a fair process, some partisan points will be made at a one lesson from the UK is that there are

References Johnston, R. and C. Pattie (2010) ‘Local parties, local money and local Electoral Commission (2010) Non-Party Campaigners: guidance on campaigns: regulations issues’, in K. Ewing, J. Rowbottom and J. expenditure and donations for elections in 2010, London: Electoral Tham (eds), The Funding of Political Parties, London: Routledge Commission (forthcoming) Geddis, A. (2010) ‘Broadcast media, political speech and the “Rupert Rowbottom, J. (2010) Democracy Distorted, Cambridge: Cambridge Murdoch problem”’, in K. Ewing, J. Tham and J. Rowbottom (eds), University Press The Funding of Political Parties, London: Routledge (forthcoming)

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 13 Colin Feasby Contemporary Issues in Canadian Political

Finance The Canadian context1 The Canadian electoral system Canada is a federation comprised of ten provinces and three territories. The federal parliament is a bicameral Regulation legislature comprised of an elected House of Commons and an appointed Senate. Introduction The provincial and territorial assemblies are unicameral and comprise elected Canada shares with New Zealand a heritage of British representatives. All elections to the federal constitutional traditions and the Westminster form of House of Commons and provincial legislatures follow the traditional parliamentary government. These common origins make Westminster form: the candidate receiving comparative study of the two countries’ experiences the most votes in each electoral district is elected. regulating political finance inviting. Canada and New Canada is a large country with diverse geography, economy and culture. The Zealand, however, differ in important ways which have had most obvious example of this diversity is significant impacts on the regulation of political finance. This the majority French-speaking province of Quebec. Throughout much of Canada’s article outlines the Canadian political finance regime and history, regional and linguistic-cultural differences were brokered through two identifies some contemporary issues that may be of interest large centrist political parties, the Liberal to observers from New Zealand. Party and the Progressive Conservative Party. During the second half of the The article begins with a brief review treatment of small political parties are 20th century a smaller, left-leaning party of the Canadian context, including the discussed. The third section considers affiliated with organised labour, the New electoral system and political finance the impact of amendments to the Canada Democratic Party (NDP), also consistently regulation. Part two concerns the Canadian Elections Act 2000 (CEA) in 2003 and elected a small number of representatives constitution and its impact on political 2006 that introduced contribution limits to the House of Commons. finance regulation. The development of and quarterly allowances for political Canada’s longstanding party system political finance jurisprudence in Canada parties. Lastly the article discusses ways broke down in the late 1980s and early through disputes involving third-party in which political spending may escape 1990s. The breakdown translated into a spending limits and the differential regulation in Canada. fractured House of Commons following the 1993 federal election. The Bloc Colin Feasby is a partner in the Calgary office of Osler, Hoskin & Harcourt LLP. He has written Québécois (BQ), a separatist party, took extensively on issues of campaign finance regulation in Canada. most of the seats in Quebec in the 1993

Page 14 – Policy Quarterly – Volume 6, Issue 3 – August 2010 federal election and formed the official expenses. The regulation of contributions election expenses. A political party which opposition. The Reform Party, a populist captures money transferred from the receives 2% of the national popular vote and ideologically conservative party private domain to the political domain. or at least 5% of the votes in the electoral based in Western Canada, came third in A transfer of money between entities districts in which it endorsed candidates the election. The NDP finished fourth within the political domain – candidates, is entitled to be reimbursed 50% of its and the formerly governing Progressive electoral district associations and election expenses. Political parties which Conservative Party was reduced to a registered political parties – is not a qualify for reimbursement of election small rump in fifth place. This five- ‘contribution’. Contributions may not be expenses also qualify for a quarterly party system has now become a four- made indirectly to conceal the identity of allowance determined by the number of party system as a result of the merger the contributor. The name and address votes cast for the party in the last general of the Reform Party and the Progressive of all individuals making contributions election. Conservative Party. Once again there are of over $200 must be disclosed by the two large parties: the Liberal Party and candidate or political party receiving the The Canadian constitution and the Conservative Party. However, in the contribution. political finance period since 2004 neither has been able The existing contribution disclosure Charter review to form a majority government. The approach was reinforced by the Political finance regulation exists in Liberals and then the Conservatives have introduction of contribution limits the shadow of the Canadian Charter of ruled in minority governments without in amendments to the CEA in 2003.2 Rights and Freedoms.5 The charter is a any formal coalition with the NDP or the Contributions by corporations and constitutional bill of rights which sets out BQ. The result has been frequent elections and more aggressive partisan tactics than Canadians have been accustomed to over the past century. There are three forms of public funding in the Canadian political finance regime: tax deductions for contributors; Framework of political finance regulation The CEA political finance regime is reimbursement of election expenses for candidates and based on election expense controls and disclosure. However, political party and political parties; and political party allowances. candidate expenses are regulated only during an election period. An ‘election period’ is defined by the CEA as being ‘the period beginning with the issue of the writ and ending on polling day’. An trade unions were prohibited, subject rights that limit the power of the state. expense includes ‘any cost incurred, or to a limited exception for contributions Laws that contravene the charter may non-monetary contribution received, by of up to $1,000 to candidates and be declared to be invalid and of no force a registered party or candidate ... used to constituency associations. Individual or effect. As a result, courts play a hand directly promote or oppose a registered contributions were limited to $5,000 in shaping political finance regulation party, its leader, or candidate during adjusted annually for inflation to ‘each through case law. The implicit threat of an election’. Outside an election period registered political party and its registered litigation also shapes choices made by there are no limits on the expenditures associations, nomination contestants, parliament in regulating political finance. of political parties and candidates. The and candidates’. Further amendments to Political finance regulation engages three election expense limits for political the CEA contained in the 2006 Federal main aspects of the charter: freedom of parties and candidates are determined Accountability Act reduced individual expression (s.2(b)), the right to vote (s.3) by a statutory formula that is adjusted contribution limits to $1,000 (adjusted and the right to equality (s.15). annually for inflation. Candidates and annually for inflation) and extinguished The first element of charter analysis is political parties must file financial returns the right of corporations and trade unions consideration of whether the challenged with the chief electoral officer following to contribute even $1,000 to candidates legislative provision violates a protected an election. and constituency associations.3 right. The plaintiff bears the burden of Contributions to political parties, There are three forms of public establishing that a charter right has been candidates and electoral district funding in the Canadian political finance infringed. The charter, unlike the US Bill associations have been regulated by regime: tax deductions for contributors; of Rights, contains an explicit limiting way of mandatory disclosure since reimbursement of election expenses for principle. Section 1 of the charter provides 1974. Contributions are defined by the candidates and political parties; and that rights guaranteed are subject ‘to CEA broadly to include monetary and political party allowances.4 A candidate such reasonable limits prescribed by non-monetary contributions and also a who receives 10% of the vote is entitled law as can be demonstrably justified in candidate’s own funds used for election to be reimbursed 60% of his or her a free and democratic society’.6 Once a

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 15 Contemporary Issues in Canadian Political Finance Regulation

plaintiff proves the violation of a right, conservative interest group the National The spending limits permit third parties the state bears the burden of proving Citizens’ Coalition (Geddis, 2004; Feasby, to spend $3,000 per electoral district to a that the limit on the right is reasonable 2005). Harper asserted that third-party maximum of $150,000 nationally. and justified. The justification test is spending limits violated section 2(b) of The Supreme Court of Canada comprised of two main aspects. First, the charter by unreasonably infringing accepted that the purpose of third-party the court must determine whether the upon freedom of expression. spending limits was to promote equality legislation addresses a pressing and The third-party spending limits and that this purpose was pressing and substantial objective. Second, the court applied to communications which substantial. The court dismissed the claim that there was no evidence to support the existence of a pressing and substantial objective, holding that parliament had When third-party spending limits were adopted in acted based on a reasoned apprehension of harm and that a relaxed evidential 2000, third parties were also required to file a return standard applied given the importance with Elections Canada disclosing details of their of the objective. It went on to reject Harper’s argument that the third-party contributions and expenditures. limits were vague or overly broad. The court acknowledged the breadth of the restrictions, but found that such breadth was justifiable in the circumstances. must determine whether legislative ‘promote or oppose the election of one The court split over whether the means are proportional to the objective. or more candidates in a given electoral limits in question were too low. The The second part of the test considers: district, including by (a) naming them; majority deferred to parliament and (1) whether the means and objective (b) showing their likeness; (c) identifying accepted that the limits allowed for a are rationally connected; (2) whether them by their respective political modest informational campaign. The the means minimally impair the right affiliations; or (d) taking a position on minority concluded that ‘the limits in question; and (3) the salutary and an issue with which they are particularly imposed on citizens amount to a virtual deleterious effects of the legislation.7 associated’. Harper contended that the ban on their participation in political Most charter challenges to political limits were either vague or overly broad debate during the election period’.8 The finance regulation have taken place at the and, as a result, unduly infringed upon disagreement between the minority and margins of the political finance regime. freedom of expression. He further assert- the majority stemmed, in part, from There have been repeated challenges ed that there was no evidence to support the poor evidential record before the to the regulation of third-party (or the government’s claim that third-party court. A challenge to British Columbia’s ‘parallel campaigner’) spending and to spending was a threat to the integrity of restrictions on third-party spending, the preferential treatment of political elections. The financial limits, Harper which are nearly identical to the federal parties and candidates in respect of also contended, were unreasonably low limits, has been heard by the BC Supreme public funding. The core elements of and did not permit effective campaigning. Court and is pending before the BC Court the political finance regime that apply to the major political parties have not Table 1: Third-party expenditures in the 2000, 2004, 2006 and 2008 general been challenged. Indeed, the courts have elections10 proceeded on the implicit assumption Number of registered third parties that financial disclosure and spending limits on candidates and political parties Expenditure levels 2000 2004 2006 2008 are constitutional. No return 0 4 7 4 $0.00 6 12 7 3 Third parties $0.01–$4,999.99 30 31 44 32 Third-party expenditures were first $5,000.00–$9,999.99 8 4 2 4 regulated in 1974 and have been a source $10,000.00–$24,999.99 2 4 5 7 of controversy ever since. After being declared unconstitutional in the mid- $25,000.00–$49,999.99 1 3 8 5 1990s, third-party spending limits were $50,000.00–$99,999.99 1 4 5 4 adopted again in amendments to the $100,000.00 and over 2 1 2 5 CEA in 2000. The third-party spending Total number 50 63 80 64 limits were promptly challenged by Total expenditures $573,854.20 $720,227.93 $1,067,680.75 $1,430,579.14 Stephen Harper, now Canada’s prime minister, who was the leader of the Average expenditure $11,477.08 $12,207.25 $14,625.76 $23,842.99

Page 16 – Policy Quarterly – Volume 6, Issue 3 – August 2010 of Appeal.9 This case offers the possibility voters and playing a meaningful role in deposits in Ontario’s Election Act to be of revisiting the debate over the type of the electoral process. The government unconstitutional.16 The court applied campaigns that can be conducted within response was that the 50-candidate Figueroa and concluded that the benefit the third-party limits with the benefit of threshold and the systemic bias in favour of the threshold was ‘overcome by the a more complete evidential record which of large parties was justified because deleterious effects of diminishing the includes expert testimony. regulations should enhance the ability capacity of [small] political parties to When third-party spending limits to communicate of those parties which present their ideas and opinions’.17 The were adopted in 2000, third parties have a reasonable chance of forming the Supreme Court of Canada may have to were also required to file a return with government. once again consider the rights of small Elections Canada disclosing details of The majority of the Supreme Court political parties in order to give clear their contributions and expenditures. Any of Canada disagreed. The court held that guidance to the lower courts. future litigation over third-party spending limits will benefit from the data that has been gathered by Elections Canada from Prior to 2003 political parties were required to field 50 third-party election expense returns. Table 1 indicates that third-party spending candidates to become a ‘registered political party’ with is increasing; however, it is also clear that third-party spending remains negligible Elections Canada. when compared to political party and candidate spending. For example, the Conservative Party together with its candidates spent $37,235,930 in the 2006 ‘participation in the electoral process Public funding and contribution limits federal election. Furthermore, few third has an intrinsic value independent of Prior to the 1993 breakdown of the parties spend the maximum allowed its impact upon the actual outcome of duopoly that controlled Canadian politics under the limits, which suggests that there elections’.12 Justice Iacobucci went on for most of the 20th century, the Liberal would be little risk in raising them. to observe that ‘the ability of a political Party and Progressive Conservative Party party to make a valuable contribution raised similar amounts of political funds. Small political parties to the electoral process is not dependent Both parties were dependent on corporate The Canadian political finance system on its capacity to offer the electorate donations. The NDP, by contrast, received employs a series of thresholds, outlined a genuine “government option”’.13 The fewer corporate contributions and instead above, to ensure that public funding flows court concluded that ‘legislation that relied upon financial support from trade only to ‘serious’ candidates and political exacerbates a pre-existing disparity in the unions. The financial equilibrium between parties. Prior to 2003 political parties were capacity of the various political parties to the Liberal Party and the Progressive required to field 50 candidates to become communicate their positions to the general Conservative Party, together with the a ‘registered political party’ with Elections public is inconsistent with s.3’.14 As a result, similar sources of funding, meant that Canada. Registered political parties the court held that the 50-candidate there was little partisan advantage to be receive a number of benefits, including threshold was unconstitutional. gained from changing the fundraising candidate–political party affiliation Case law following Figueroa has been rules. identified on the ballot and the right to divided. The Ontario Court of Appeal The Liberal Party dominated issue tax receipts to donors. The ability heard a challenge to the thresholds political fundraising in the fragmented party to issue tax receipts enhances political parties must meet to qualify for election system that lasted from 1993 to 2000. The parties’ fundraising capacity, as donors are expense reimbursement and allowances.15 Liberal Party was particularly successful at more likely to contribute if they receive a The small political parties that brought raising corporate funds, as it was the only benefit in return in the form of reduced the challenge took the position that the political party that could plausibly form the taxes. Supreme Court’s decision in Figueroa government. During the 1993–2000 period Miguel Figueroa, leader of the meant that thresholds to qualify for the populist and ideologically conservative Canadian Communist Party, challenged public funding must be unconstitutional. Reform Party established an effective the 50-candidate threshold on the The Ontario Court of Appeal agreed grassroots fundraising system. After 2000, grounds that it violated the right to vote that the thresholds violated section 3 of the Reform Party’s heirs, the Canadian and to run for office protected by section the charter, but held that infringement Alliance, and, later, the Conservative Party 3 of the charter.11 Figueroa contended was justified because thresholds were built upon this fundraising foundation by that the threshold created a systemic required to maintain public confidence adopting direct and targeted advertising bias against small political parties and in the electoral process. At about the and other strategies imported from the in favour of large political parties. The same time, the Ontario Superior Court of United States to maximise the number of systemic bias prevented small parties Justice reached a contrary result, finding contributors and contributions. from communicating their messages to a threshold for the refund of candidate Contribution limits were adopted by

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 17 Contemporary Issues in Canadian Political Finance Regulation

the governing Liberal Party in 2003 as seventh year, the Conservative Party retains than any political party had prior to the part of an effort to rehabilitate the party’s a comfortable fundraising advantage over adoption of contribution limits and image following the ‘sponsorship scandal’, the Liberal Party and, indeed, over all of allowances. Table 3 shows the annual in which advertising agencies associated the opposition parties combined. allowances paid to political parties since with the Liberal Party were used as Some prominent Liberals, including 2004. conduits for government sponsorship Liberal Party president Stephen LeDrew, The Conservative Party’s financial of events in Quebec. Even though there foresaw that contribution limits would advantage has had an impact on the was no proof that any of the sponsorship damage the Liberal Party’s dominant conduct of politics since 2006. Since 2006 funds returned to the Liberal Party financial position. LeDrew decried the the Conservative Party has governed twice through political contributions, political reforms as ‘dumber than a bag of hammers’ as a minority government. The funding finance reform including contributions (Gray, 2006). To mitigate the anticipated advantage enjoyed by the party has was expedient in the circumstances. impact of the contribution limits, public allowed it to govern with more authority The contribution limits had greater funding of political parties through than normal in a minority situation. The effect on the Liberal Party than on the allowances paid quarterly was introduced. opposition parties have been reluctant to Conservative Party (Flanagan and Coletto, Funding is determined according to a per bring down these minority governments 2010). The effects of contribution limits vote rate based on votes received by each because the Conservative Party has been were not lost on the Conservative Party political party in the prior election. The the only political party that has had the when it took power after the election in per vote funding amount was set at a level financial wherewithal to comfortably fight 2006. One of the reforms it implemented that was intended to replace the funds an election. As a result, there have been in its Federal Accountability Act 2006 was that would be lost by political parties by instances where opposition parties have a reduction in individual contribution reason of the contribution limits. threatened to bring down the government limits to $1,000 and a prohibition on The allowances mitigated the loss only to relent and compromise, in part corporate and union contributions. of corporate contributions and large because of financial considerations. Table 2 shows the persistent fundraising contributions from individuals lost by the The Conservative Party also provoked advantage enjoyed by the Conservative Liberal Party. For the Conservative Party, a crisis over the budget in 2008 by Party since contribution limits went which lost comparatively little as a result threatening to eliminate the quarterly into effect at the beginning of 2004. The of the contribution limits, the allowances allowances paid to political parties. Liberal Party has identified the need to were mostly additional funding rather The removal of public funding would develop a more grassroots approach to than replacement funding. Success in damage the opposition parties more fundraising, but has been unable to match private fundraising together with public than the Conservative Party. The threat the success of the Conservative Party. As funding has resulted in the Conservative to funding was one of the few things that the contribution limit system enters its Party having far greater financial resources has galvanised the opposition parties and caused them to make a convincing Table 2: Contributions to major political parties 2004–09 threat to defeat the government. The 18 Party 2004 2005 2006 2007 2008 2009* Conservative Party withdrew its proposal. BQ $858,746 $734,729 $529,513 $429,971 $713,085 $621,126 Cons. $10,949,559 $17,847,451 $18,641,306 $16,983,630 $21,179,483 $17,707,846 Spending limits Lib. $4,719,388 $8,344,162 $9,063,126.36 $4,471,903 $5,811,492 $9,564,677 Spending outside election periods Canadian political parties have always NDP $5,194,170 $5,120,827 $3,972,762.57 $3,959,451 $5,412,940 $4,035,492 *2009 data based on quarterly returns, as not all annual returns have been posted by Elections Canada. spent some money in the days and weeks immediately prior to the election period. Table 3: Annual allowances paid to major political parties 2004–09 Until recently, however, parties did not have Party 2004 2005 2006 2007 2008 2009 enough money to engage in significant BQ $2,733,868 $3,064,864 $2,950,984 $2,953,218 $3,017,092 $2,742,215 pre-writ electioneering. As discussed Con. $7,913,512 $7,331,172 $9,388,357 $10,218,123 $10,439,132 $10,351,071 in the previous part of this article, all of this changed in 2004. Since then, the Lib. $9,141,408 $9,087,333 $8,572,965 $8,517,049 $8,701,263 $7,219,593 Conservative Party has had the financial NDP $2,883,919 $3,879,817 $4,611,140 $4,923,795 $5,030,293 $4,998,192 resources to engage in extensive pre-writ electioneering. This is demonstrated by a Table 4: Political party spending limits in recent elections comparison of Conservative Party income Party 2004 2006 2008 from contributions and allowances set out BQ $4,591,747.38 $4,676,676.52 $5,066,811.35 in Tables 2 and 3 with spending limits in recent elections set out in Table 4. When Con. $17,593,925.32 $18,278,278.64 $19,999,230.62 comparing the tables, it should be noted Lib. $17,593,925.32 $18,278,278.64 $20,014,302.76 that political parties are reimbursed 50% NDP $17,593,925.32 $18,278,278.64 $20,063,430.10 of their election expenditures.

Page 18 – Policy Quarterly – Volume 6, Issue 3 – August 2010 The competitive partisan dynamic from circumventing spending limits transfer form instructing the same created by three successive minority that apply to the election period. The amount indicated in the invoice to governments, together with the financial BC Supreme Court did not find this be transferred from the campaign to disparity between the parties has resulted position compelling. The court held the Fund. This wire transfer form was in expanded use of political advertising. that regulation of third-party spending signed and sent back to the Fund, who The Conservative Party has not been outside the election period could not be filled in any missing information. The content to merely ramp up its election justified as it was not proximate enough Fund then prepared a second wire campaign in the weeks and months to an election and, as a result, did not transfer, directing the same amount immediately prior to the election period; pose as great a threat to the integrity of of money to be transferred from the it has also engaged in strategic advertising an election. The court further held that Fund to the candidate. Finally, after the campaigns when no election campaign the extension of third-party limits outside transfer from the Fund was completed, was imminent. The most famous examples the election period was problematic the wire transfer form completed by were the negative advertisements aimed at because it prevented full participation in the official agent was sent to the bank Stephane Dion when he became leader of public debate while the legislature was in to have the money paid right back. the Liberal Party in 2006 and at Michael session. Ignatieff after he became leader of the Liberal Party in late 2008. Advertisements that promote a political party The Conservative Party’s use of advertising to influence political images necessarily provide a benefit to a candidate affiliated and debates outside election periods and increased use of pre-writ election with that political party whether or not the candidate’s advertising has forced the other political parties to respond in kind. Despite their name is used. comparatively weak financial positions, both the Liberal Party and NDP have Indeed, during the 2006 election, the engaged in advertising to compete with Expenditure limit arbitrage Fund transferred some 1.2 million and respond to the Conservative Party. The A second way in which the Conservative dollars to the 67 local campaigns inability of the Liberal Party to compete in Party has used its financial advantage is participating in the RMB program. The an advertising arms race provoked Dennis what I have termed ‘expenditure limit totality of this amount was returned Dawson, a Liberal senator, to introduce a arbitrage’. Under the Canadian political to the Fund by way of these ‘in and bill in the Senate to control some pre-writ finance system, political party spending out’ transfers with each participating election spending by political parties. The limits are separate from candidate candidates.20 bill would include within the definition spending limits. The major political parties of ‘election expense’ any cost ‘incurred typically spend close to the maximum An investigation as to whether the in the three month period prior to the permitted. However, candidates of the Conservative Party exceeded its spending election period’. The bill, being a private major political parties in uncompetitive limit is ongoing, but no charges have been member’s bill originating in the Senate, districts often do not spend the maximum laid. The ‘in and out’ transactions, however, stands little chance of becoming law and allowed. The unused spending capacity of came under judicial scrutiny in Campbell is best understood as a protest against candidates represents an opportunity for as a result of Elections Canada’s denial of the effects of Conservative Party financial a political party with more funds than it election expense reimbursement claims dominance. can use under its spending limits because submitted by candidates who participated An interesting twist on pre-writ there are no limits on transfers of funds in the ‘in and out’ transactions. Despite regulation of expenditures is found in between political parties and affiliated these concerns, it is hard to conclude British Columbia’s Election Act. The 2005 candidates. that arbitrage between political party provincial election in British Columbia The method devised by the Conserva- and candidate spending limits is illegal. was marked by increases in third-party tive Party to exploit the unused spending Advertisements that promote a political spending. As a result, BC adopted third- capacity of candidates was described by party necessarily provide a benefit to a party spending limits which mirrored the the Federal Court in Campbell v. Canada candidate affiliated with that political federal limits but extended into the 60- (Chief Electoral Officer) in the following party whether or not the candidate’s day period before the call of an election. terms: name is used. Indeed, to insist upon the The third-party limits were challenged The evidence shows that the Party did direct promotion of a candidate would by the BC Teachers Federation.19 The in fact finance candidates’ contribu- be inconsistent with the broad approach BC government attempted to justify the tions using the following scheme: used to defining ‘election advertising’ in extension of the third-party limits into first, the Fund issued an invoice to the CEA. the pre-writ period on the grounds that the official agent. Simultaneously, The Federal Court in Campbell was it was necessary to stop third parties the official agent completed a wire not asked to determine whether the

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 19 Contemporary Issues in Canadian Political Finance Regulation

Conservative Party exceeded its spending Kingdom or New Zealand, remains for political broadcasts is akin to political funding. However, political broadcasting is beyond the scope of this article. limits. Moreover, the court overturned quiescent compared to the United States. For a discussion of the history of the regulation of political broadcasting in Canada see LaCalamita, 1984. For a the chief electoral officer’s decision The Canadian experience is a discussion of constitutional issues related to the regulation of to deny candidates’ election expense cautionary tale for New Zealand as it political broadcasting, see Feasby, 2006. 5 Part I of the Constitution Act 1982, being schedule B to the reimbursement claims. Based on this embarks on reform of its political finance Canada Act 1982 (UK), 1982, c.11 (the ‘Charter’). decision, it appears that if Elections regime. The Canadian reforms of 2003 6 This aspect of the charter resembles the European Convention for the Protection of Human Rights and Canada concludes that ‘in and out’ and 2006 show that ostensibly neutral Fundamental Freedoms (4 November 1950), 213 UNTS 221. The New Zealand Bill of Rights Act 1990, s.5 also transactions should be stopped, an changes to a political finance regime can contains a justified limitations provision that was explicitly amendment to the CEA will be required. have a significant impact on the practice of modeled on the Canadian charter. 7 R. v Oakes, [1986] 1 SCR 153 and Dagenais v Canadian politics and the balance between political Broadcasting Corporation, [1994] 3 SCR 835. 8 Harper v Canada (Attorney General), [2004] 1 SCR 827 at Conclusion parties. Canadian politics today exist in a [35] per McLachlin CJ. Political finance has become increasingly state of persistent quasi-campaign. This 9 British Columbia Teachers’ Federation v British Columbia (Attorney General), 2009 BCSC 436. important to the practice of politics in condition is a result of recurring minority 10 The data for 2000 is compromised by the fact that mid- Canada in recent years. More money is governments, but it is also facilitated and campaign an injunction was issued by the Alberta Court of Queen’s Bench suspending the rules applicable to third available to participants in the political exacerbated by increased public funding parties and then reinstated by the Supreme Court of Canada. ‘Average expenditure’ figures do not include third parties with process as a result of increased public and the imbalance in funding amongst no return filed. funding and it is being deployed in more the major political parties. New Zealand 11 Figueroa v Canada (Attorney General), [2003] 1 SCR 912. 12 Ibid. at [29]. aggressive and creative ways than in the should be cautious before adopting any 13 Ibid. at [39]. 14 Ibid. at [54]. past. At the same time, political finance changes to its political finance legislation. 15 Longley v Canada (Attorney General) (2007), 288 D.L.R. has become increasingly subject to In particular, even in the absence of any (4th) 599 (Ont. C.A.). 16 DeJong v Ontario (Attorney General) (2007), 287 D.L.R. judicial scrutiny. Small political parties constitutional standards, the differential (4th) 90 (Ont. Sup. Ct.). 17 Ibid. at [79]. and third parties have launched repeated impact of legislation on political parties 18 2009 data based on quarterly returns as not all annual constitutional challenges to the political should be considered. returns have been posted by Elections Canada. 19 British Columbia Teachers’ Federation v. British Columbia finance regime and Elections Canada has (Attorney General), 2009 BCSC 436. taken more enforcement actions. The 1 Parts of this section are adapted from Feasby, 2010. For a 20 Campbell v Canada (Chief Electoral Officer), 2010 FC 43 more detailed discussion, see Feasby, 2007. at[38]-[39]. Canadian political finance landscape, 2 An Act to amend the CEA and the Income Tax Act (political financing), SC 2003, c.19. though more contested and dynamic 3 SC 2006, c.9. than that found in Australia, the United 4 The reservation and allocation of free and discounted time

References Flanagan, T. and D. Coletto (2010) ‘Replacing allowances for Canada’s Feasby, C. (2005) ‘Freedom of expression and the law of the democratic political parties?’, University of Calgary SPP briefing papers, pp.3-4, process’, Supreme Court Law Review (2d), 29 http://www.policyschool.ucalgary.ca/publications Feasby, C. (2006) ‘The Supreme Court of Canada’s political theory and Geddis, A. (2004) ‘Liberté, egalité, argent: third party election spending the constitutionality of the political finance regime’, in K. Ewing and the charter’, Alberta Law Review, 42 and S. Issacharoff (eds), Party Funding and Campaign Financing in Gray, J. (2006) ‘Reality check’, CBC News Online, 13 June International Perspective, Oxford: Hart Publishing LaCalamita, J. (1984) ‘The equitable campaign: party political Feasby, C. (2007) ‘Constitutional questions about Canada’s new political broadcasting regulation in Canada’, Osgoode Hall Law Journal, 22 finance regime’,Osgoode Hall Law Journal, 45 (513), pp.519-21 Feasby, C. (2010) ‘Canadian political finance regulation and jurisprudence’, in K. Ewing, J. Tham and J. Rowbottom (eds), The Funding of Political Parties, London: Routledge (forthcoming)

Page 20 – Policy Quarterly – Volume 6, Issue 3 – August 2010 Graeme Orr

Public Money and Electioneering A View from Across the Expenditure limits New Zealand has, for some time imposed limits on election year expenditure. Only in the last two years has Australia begun to Tasman seriously consider capping expenditure. The only jurisdiction in Australia that caps campaign expenditure currently is Introduction Tasmania’s upper house (in practice a This article compares some key aspects of political finance cap on candidate spending, as the house is the only Westminster-style chamber to regulation in Australia and New Zealand. It centres on public remain dominated by independents). money and electioneering expenditure. These are treated in The belated emergence of interest in expenditure caps in Australia is born of three sections: expenditure limits; incumbency benefits, such a widespread and multi-partisan feeling that Australian political finance needs as government advertising and parliamentary entitlements; significant reform. The feeling is strongest and direct public funding of electioneering. A comparison in New South Wales, where local and state-level corruption and undue donor paper by Joo-Cheong Tham explores private money in influence are particularly pronounced. politics, in particular donations and their disclosure. In March a multi-party committee recommended: With one significant exception – public That said, Australia might be catching • capping expenditure by parties funding – Australia’s approach to political up on international developments. For and candidates, the party cap to be finance has been decidedly laissez-faire the past couple of years, concerns with based on seats contested. The cap (see Orr, 2010; Tham, 2010). This is clear accountability, corruptibility and the cost might apply from the beginning of by comparison with New Zealand, Canada of electoral politics have driven several each election year. In comparison, and the United Kingdom. Australia and inquiries and elicited cross-party support New Zealand is proposing to reduce New Zealand may be separated by just for significant reform. There is some its regulated period to a maximum of 2,000 kilometres of the Tasman Sea but, in bipartisan support for both contribution 90 days prior to the poll. regulatory terms, New Zealand lies close and expenditure limits. The trajectory of • capping third-party expenditure, to Britain and Australia lies closer to the Australian debate is thus towards more at a figure ‘significantly lower’ than United States. regulation, at a time when New Zealand the party cap. In comparison, New is turning the other way, particularly Zealand is abolishing its cap on third- as regards third parties. At the time of party or ‘parallel’ campaigns. (NSW Graeme Orr is an Associate Professor at the Parliament, 2010, recommendations University of Queensland Law School, Brisbane, writing, however (May 2010), Australia is Australia. yet to see any comprehensive reform bills. 19–22)

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 21 Public Money and Electioneering A View from Across the Tasman

The New South Wales committee did campaigns. In contrast, having repealed of a television company, it used that not suggest a figure for the expenditure the Election Finance Act 2007 as too heavy- implied freedom to strike down a United caps, or define their scope except to give handed, the New Zealand Cabinet decided Kingdom/New Zealand-style system of two principles: to favour ‘lighter touch’ regulation of third- banning campaign broadcasts in favour • electioneering, but not administration party (or ‘parallel campaigner’) campaigns of free air-time. Expenditure limits costs, should be covered; (New Zealand Cabinet, 2009, p.2). Under need not be unconstitutional, however, • public funding levels, government its Electoral (Finance Reform and Advance provided they are proportionate to advertising and third-party activities Voting) Bill, electioneering campaigns legitimate ends such as electoral equality should be taken into account. of over NZ$12,000 would still require and political integrity. A second complication, which New Zealand legislators do not face, is Australia’s federal system. It is one Notoriously, in 2005 the New Zealand auditor-general thing for a state or national parliament identified ‘widespread’ electioneering abuses of MP to legislate caps, but political issues and money are fluid and cross-jurisdictional. support, leadership and party funds. All but one party Legislators can force their parties to keep separate campaign accounts, but once was implicated, and over NZ$1.17m was involved. regulation extends beyond the narrow and formal election campaign period the problem of regulating political money in a federation becomes more complex, and ideally requires uniform laws. The New South Wales Electoral registration. Unlike parties and candidates, Commission stuck out its neck and however, third parties will no longer face Incumbency benefits: parliamentary proposed more detail, in particular that expenditure caps, let alone an obligation allowances and government advertising third-party, or lobby, groups be capped at to submit expenditure or donation returns Parliamentary entitlements are numer- the equivalent of NZ$260,000 per election (New Zealand Cabinet, 2009). ous, intricate,3 and subject to perennial year, with only New South Wales electors Nor has Australia confronted the tinkering. Concern in Australia lies chiefly or New South Wales organisations being question of what to include in an in two types: electorate allowances, and entitled to electioneer. expenditure cap. At present, Australian printing and communication allowances. These caps were proposed in tandem definitions of ‘electoral matter’ or Electorate allowances of between with a tight annual limit on donations, ‘political expenditure’ are quite broad. NZ$40,000 and $60,000pa are paid of about NZ$2,600 per annum from any They cover anything ‘intended or without strings attached. Federal MPs can elector to any party or its candidates. likely to affect voting in an election’, use them to top up their base salary and Corporations and organisations would or ‘the public expression of views on defray expenses. Or, like salary, they are not be permitted to donate; but they an issue in an election’.1 But these were free to plough them into electioneering. could (a) join parties or (b) affiliate, designed to trigger disclosure of the There are calls for separate accounting of like trade unions, but with their fees authors and funders of political speech. electorate allowances and to ensure that corralled for administrative and not Narrower definitions may be required they are not used for electioneering.4 electioneering purposes. The committee for restrictions on expenditure on – and Other, non-salary allowances are recommended increasing public funding hence the quantum of – such speech. sizeable: amounting to about NZ$210.6m to compensate, but opposed any move to Indeed, even the 2007 Act sought to avoid in 2008–09 (or just over NZ$930,000 ‘full public funding’ (NSW Parliament, capturing pure issue advertising in its net per federal MP). Of these, printing and 2010, recommendations 28–29). (Geddis, 2008, pp.220-1). Of course, the communication entitlements permit The recommendations were heavily distinction between issue advertising and MPs to address their electorates through influenced by the Canadian system, advertising promoting or denigrating a direct mail and newsletters. There has discussed by Colin Feasby in this issue. particular party is a slippery one. It may been an ongoing tug of war over their Attention to New Zealand experience be cleaner to simply bite the bullet and quantum and use. Formerly uncapped, was less apparent. Whilst the sensitivity restrict all political campaigning during these allowances drew the ire of the of restricting third-party restrictions was the election period. auditor-general in 2001. A choice example acknowledged in a recommendation Designing expenditure caps in of the problem involved Bob Horne, a for wide-ranging consultation prior to Australia will be bedevilled by two Labor MHR in a marginal seat, spending legislative drafting, the New South Wales factors. One is constitutional. The about NZ$284,000 on printing allowance committee nonetheless recommended High Court, in the ACTV case in 1992,2 alone, six times the average of other MPs. consideration of mandatory registration, discovered an implied freedom of Dubbed ‘Bob-the-Printer’, he still lost his auditing and disclosure for third-party political communication. At the suit seat (Tham and Young, 2006, p.55).

Page 22 – Policy Quarterly – Volume 6, Issue 3 – August 2010 The Howard government sub- system lacks clear rules and accountability. to parliamentary consideration.8 Around sequently introduced caps. But these were The convention is one of a double effect: NZ$195m was spent on media costs alone generous in size and scope. The printing electoral benefit is fine, provided it is for the WorkChoices industrial relations allowance still exceeded NZ$195,000 per incidental to material that is otherwise campaign, in which the conservative annum in 2006.5 Close to half could be directed to constituency business. But in government dramatically outbid its squirrelled away and rolled over, say into Australia particularly, the convention is trade union opponents. The other is an election year, and special ministers of belied around election time by a ‘surge’ that government advertising benefits state ruled that it could be used for pure in use of allowances leading up to each only the governing party.9 (Governments electioneering in the form of how-to- election; and by leaflets that mirror party already benefit from a lion’s share of vote and postal vote material. Unlike in New Zealand, there has not even been an explicit rule against such moneys being [Australian] Federal parties receive money for votes used for ‘electioneering’. Unsurprisingly, the auditor-general recently found received, paid in a lump sum after each election. Each that nearly three-quarters of MPs’ communications were likely to be outside vote, in 2010, will be worth about NZ$3, or NZ$6 per the notional purpose of ‘constituency elector given the twin House and Senate ballots. Small service’ (Auditor-General for Australia, 2009–10, p.17). parties miss out in races where they don’t meet a 4% This is not to say that New Zealand has had best practice. Notoriously, in 2005 the threshold. New Zealand auditor-general identified ‘widespread’ electioneering abuses of MP support, leadership and party funds. All but one party was implicated, (especially attack) advertising.7 Rules have corporate donations, especially under an and over NZ$1.17m was involved. The even had to be devised to prevent MPs uncapped donations system, since big Parliamentary Service Act 2000 definition in safe seats – and senators who do little donations tend to favour the party in currently only forbids parliamentary personal campaigning – from using their power (at least until the writing is on the funds being used to explicitly seek voter allowances to prop up other campaigns. wall – see McMenamin, 2008).) At least support. This creates a loophole for both While New Zealand lacks an upper house, parliamentary entitlements are capped negative and issue advertising using a similar problem must arise if party- and spread across all parliamentary parliamentary entitlements. The Electoral list MP allowances are used in a targeted parties. Act 1993 definition of ‘election advertising’, way to assist colleagues in marginal A repeated refrain about both govern- capping private expenditure, is broader. constituencies. ment advertising and parliamentary The New Zealand Cabinet has endorsed An Australian special minister of entitlements in Australia is the absence a proposal to harmonise the definitions state independent committee is due to of principles-based legislation defining by adopting the broader definition for report on parliamentary entitlements. and restricting their use. Instead, loose parliamentary material, but only during This should build on decisions made in guidelines and bureaucratic discretion the regulated election campaign period mid-2009 to rein in crasser aspects of govern both types of expenditure. Any (New Zealand Cabinet, 2009, appendix 2). system – by confining printing allowances real oversight is falling, periodically and This restriction is only a partial solution. to ‘parliamentary or electorate business’ post-hoc, to the auditor-general. Since Yet it is tighter than anything yet proposed and not ‘party business or electioneering’, 2007, for instance, the Australian auditor- in Australia. Australia in many regards is including capping postal vote applications general has been involved in both vetting in catch-up mode with New Zealand. It to 50% of the electorate and not allowing government advertising campaigns prior took until mid-2009 to adopt the New incumbents to print how-to-vote material to their approval and auditing select Zealand practice of pre-screening MPs’ with parliamentary funds. The problem, campaigns after the event (Hawke, 2010). material. as with government advertising, is how Yet that vetting role is being taken away. In both countries, the department to restrain incumbency benefit without overseeing parliamentary entitlements strangling legitimate information and Public electoral funding (New Zealand Parliamentary Services and communication. Government advertising Since the early 1980s, Australia has had the Australian Department of Finance) is the bigger concern in Australia, public funding of elections.10 Federal has faced criticism for a lack of rigorous however, for two reasons (Orr, 2006). parties receive money for votes received, scrutiny.6 Parliamentarians argue that One is the sheer size of the campaigns: paid in a lump sum after each election. they act in good faith, on conventional the High Court effectively ruled that the Each vote, in 2010, will be worth about beliefs about proper usage. In other size is up to the executive and campaigns NZ$3, or NZ$6 per elector given the twin words, everyone makes hay when the can even promote government bills prior House and Senate ballots. Small parties

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 23 Public Money and Electioneering A View from Across the Tasman

miss out in races where they don’t meet a purpose they wish, the effect is electoral where parties spend money on a daily 4% threshold. The payments come without reimbursement. Such public funding basis on confidential market research. strings attached, and although they rarely explicitly recognises that electioneering is In the United States, a perennial cover the full cost of electioneering in an a public necessity or good, and accepts that problem is the size of the war chests needed uncapped ‘arms race’ they are predictable elections are party-centred. It bypasses the to unseat an incumbent. This contributes and significant. The 2007 Australian problem with parliamentary entitlements to a sense that politics is closed to all but election generated the equivalent of about of separating legitimate from illegitimate insiders and the individually wealthy $NZ60m in public funding. In contrast, the types of communication and advertising. and well-connected. Perversely, the old 2008 New Zealand electoral broadcasting But that problem is far from mechanism to wrestle power away from allocation (the only direct electioneering eliminated. Public funding, far from insiders in the form of party bosses – the funding) was just $NZ3.2m. being a magic bullet, has not restrained primary election – only magnifies the war- New Zealand – like the United demand for political money in Australia. chest problem. Kingdom – lacks either a neat or a On the contrary, the arms-race in the In Westminster systems the war-chest problem may be less acute, but only by a matter of degree. It is also manifested ... [the] Australian experience shows that tight, even differently. Unlike in the United States, the problem is not one of candidate finances, legislated controls and vetting of materials is needed but party finances. And the problem is not just of private money leveraging and to prevent MPs misusing parliamentary allowances entrenching power, but also of public for partisan purposes. In this and other egalitarian moneys reinforcing incumbency. Australian politicians currently appear measures ... Australia lags behind New Zealand in keen on increasing public funding and limiting donations, two measures not on retaining a laissez-faire bias. the New Zealand radar. Cynics will note that enthusiasm for this has coincided with a decline in corporate donations during the global financial crisis; but a general weariness with fund-raising developed approach to public funding. absence of expenditure limits has created and carpet-bagging predates that crisis. There may be good reasons for this, a ‘have your cake and eat it too’ mentality. While Australian campaign finance law such as the belief that parties are private Generous parliamentary allowances were has been less interventionist than in its associations, not quasi-state actors. This misused and needlessly expanded. The common law-cousins, when Australia belief has two pragmatic manifestations. current Labor government’s more chaste regulates it tends to do so with a statist There is a fear that public funding might approach to government advertising and bias. In particular, parties will have little incite taxpayer cynicism, and a longer- printing allowances has helped. But such stomach for imposing expenditure caps term concern that parties might lose sight tempering is likely to be temporary, unless on themselves but not third parties. of their grassroots. legislation is introduced to reinforce it. Libertarians in New Zealand would look Certainly, party membership is askance at this approach: third-party parlous in Australia, but that trend is Conclusion expenditure caps in Australia could indeed common internationally. But unrestrained A common lament is that we get the be dangerous without governments corporate donations are the greatest best democracy money can buy. That accepting real restrictions on government danger to parties’ responsiveness to their is cynical, given there is no guaranteed, advertising, especially in election years. bases. Any taxpayer opposition to public let alone linear, relationship between In the meantime, public funding is funding appears to be short-term, and money spent and political outcomes. Even the only area where Australian practice counterbalanced by the fact that the large-scale political expenditure can be is more developed than New Zealand’s. money comes without strings attached. of little avail: witness the WorkChoices Direct public funding to defray election The New Zealand Royal Commission government advertising and the fate of expenses may be a cleaner and more honest on the Electoral System recommended ‘Bob the Printer’. Nonetheless, all else method than what Geddis has labelled Australian-style public funding. Its benefit being equal, money matters. And the ‘backdoor’ support through a convoluted is its simplicity. A single payment is more the merrier: no political campaign set of parliamentary service funds made per electoral cycle, and democratic would prefer fewer resources to more. (Geddis, 2008, p.218). However, Australian principle underlies paying per vote As politics becomes even more leader- experience shows that tight, even legislated received. The 4% threshold may need centred, it is now common for new leaders controls and vetting of materials is needed lowering to take MMP into account. Whilst to be introduced with an advertising blitz to prevent MPs misusing parliamentary parties can use the funding for whatever – an example of the ‘permanent campaign’ allowances for partisan purposes. In this

Page 24 – Policy Quarterly – Volume 6, Issue 3 – August 2010 and other egalitarian measures – notably of interventionism, under the short-lived 6 The Australian auditor-general described the Department of Finance as adopting ‘a relatively gentle approach to capping party expenditures – Australia lags Election Finance Act 2007. entitlements administration’ (Auditor-General for Australia, 2009–10, p.16). behind New Zealand in retaining a laissez- 7 The Australian auditor-general shows expenditure increasing 1 Commonwealth Electoral Act 1918, s4 (‘electoral matter’), from two to five times in election years over non-election faire bias. That libertarian bias is eroding, s314AEB (‘political expenditure’). years, as war chests are squirrelled away then spent. 2 Australian Capital Television v Commonwealth (1992), 177 however, and there is momentum, across (Auditor-General for Australia, 2009–10, p.30; appendix 4.) CLR 106. 8 Combet v Commonwealth (2005), 221 ALR 621. the Australian spectrum, for stronger 3 Recently described as ‘difficult to understand and manage’ 9 This need not necessarily be the case. Queensland now and ‘complex and overdue for reform’: see Auditor-General allows the Opposition leader to access funds for policy regulation, possibly on the Canadian for Australia, 2009–10, pp.15, 17. advertising (Department of Premier and Cabinet, 2002, 4 For example, former Senator Murray’s submission to the model of limiting donations and section 4.5). Committee for the Review of Parliamentary entitlements, 10 First for New South Wales elections (1981), then national expenditures. Australians are considering p.11, http://www.finance.gov.au/parliamentary-services.docs/ elections (1983). Four smaller jurisdictions still lack public Mr_Andrew_Murray.pdf. this trajectory at the same time as New funding (Western Australia, South Australia, Tasmania and 5 Australian MPs currently serve electorates with over twice the Northern Territory). Zealand is pulling back from its high point the enrolment of those represented by New Zealand constituency MPs.

References New South Wales Parliament, Joint Standing Committee on Electoral Auditor-General for Australia (2009–10) Administration of Matters (2010) Public Funding of Election Campaigns, report 2/54, Parliamentarians’ Entitlements by the Department of Finance and Sydney: The Committee Deregulation, report 3, Canberra: ANAO New Zealand Cabinet (2009) CAB Min (09) 45/10 Department of Premier and Cabinet (2002) The Queensland Opposition Orr, G. (2006) ‘Government advertising: Parliament and political equality’, Handbook, 2nd edition Papers on Parliament, 46, pp.1-16 Geddis, A. (2008) ‘New Zealand’s Electoral Finance Act 2007 and its Orr, G. (2010) The Law of Politics, Annandale: Federation Press discontents’, Public Law Review, 19, pp.215-35 Tham, J. (2010) Money and Politics: the democracy we can’t afford, Hawke, A. (2010) Independent Review of Government Advertising Sydney: University of New South Wales Press Arrangements, report to special minister of state, 26 February Tham, J. and S. Young (2006) Political Finance in Australia: a skewed McMenamin, I. (2008) ‘Business, politics and money in Australia: testing and secret system, Canberra: Democratic Audit of Australia economic, political and ideological explanations’, Australian Journal of Political Science, 43, pp.377-405

Recent Research The influence “Essential” The impact on of foreign workers te reo Mäori of assets and in the dairy trans-Tasman liabilities on industry migration

real interest by Paul Callister and by Paul Hamer rates Rupert Tipples (IPS WP 10/11 July 2010) (IPS WP 10/10 July 2010) by Dennis Rose (IPS WP 10/09 June 2010)

To download these and other IPS working papers go to http://ips.ac.nz/publications/publications/list/7

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 25 Joo-Cheong Tham

Regulating Political Contributions Another View from Across the

accompanied by adequate disclosure of political contributions. Tasman In Australia, a mix of federal, state and territory schemes governs the disclosure of political contributions. Here I will This article compares the Australian and New Zealand focus on the federal scheme, which is electoral finance regimes, with a particular focus on political found in the Commonwealth Electoral Act 1918 (Cth). Under this Act, registered contributions. Three specific areas are examined: disclosure political parties and their ‘associated of contributions; limits on contributions; and regulating entities’1 are obliged to submit annual disclosure returns. Virtually identical the sale of access and influence. This examination is disclosure requirements apply to each. The returns are required to be in a form underpinned by what I see as the key purposes of democratic approved by the Australian Electoral political finance regimes (Tham, 2010, ch.1): Commission (AEC) and must disclose the total amount received, paid or owed • protecting the integrity of Disclosure of contributions by, or on behalf of, the registered political representative government, an aim The key principle underlying disclosure party or associated entity for the financial which encompasses the prevention of schemes is transparency of electoral year. In addition to disclosing these totals, corruption; financing. Such transparency is required registered political parties and associated • promoting fairness in politics, to protect the integrity of representative entities are required to make further especially in elections; government in three ways. It aids informed disclosure if they have received from, or • supporting parties to discharge their voting, thereby buttressing the integrity owe, a particular person or organisation functions; of electoral processes. Moreover, it is a a sum exceeding an indexed threshold. • respecting political freedoms, in crucial tool for preventing corruption. In 2009–10 the indexed threshold stood particular freedom of political Further, such transparency is in itself at AUD$11,200 (or around NZ$13,250). expression and freedom of political necessary to protect public confidence In calculating whether this sum has been association. in representative government. Besides reached for payments made to the party these broader rationales, transparency of (or associated entity), amounts below the political funding is also necessary to ensure indexed threshold can be disregarded. the effectiveness of specific regulatory Consequently, cumulative donations that Dr Joo-Cheong Tham is a Senior Lecturer at measures. For instance, contribution exceed the threshold can be disregarded Melbourne Law School, Melbourne, Australia. limits can only work effectively if unless one or more of these donations

Page 26 – Policy Quarterly – Volume 6, Issue 3 – August 2010 exceed the threshold. Once the indexed Committee on Electoral Matters found para 2.10). Specifically, the dated nature threshold has been reached, however, that under the $10,300 threshold (which of the returns means that voters do not registered political parties and associated applied in 2006–07), only 52.6% of the have access to the relevant information entities must disclose certain particulars, income of the Australian Labor (ALP) when determining their voting choices. namely the amount of the sum or debt and Coalition parties was itemised for For example, in late September 2004 and the name and address of the person that year (Joint Standing Committee British Lord Michael Ashcroft donated $1 (or organisation) who paid or is owed on Electoral Matters, 2008, p.33) On million to the federal Liberal Party, barely the sum. these calculations, we have a remarkable a fortnight before the October 2004 Persons who donate to a registered situation where the source of nearly half federal election. Citizens casting their political party an amount exceeding the of the income of the major parties is votes in that election were completely indexed threshold in any particular year unknown. unaware of this contribution and only are also subject to annual disclosure found out more than 15 months later, on obligations in that they must lodge a 1 February 2005 when the AEC released statement disclosing all such gifts to the the disclosure returns. Here, there is AEC and itemise those exceeding the Lack of transparency much to be said for the New Zealand indexed threshold; they are also obliged in relation to the requirement to disclose any donation to itemise gifts exceeding the indexed exceeding NZ$20,000 within 10 working threshold that were used to make the funding of third parties days of its receipt.2 gifts to the political party. Further, third Are there elements of the Australian parties that have spent more than the (and their parallel federal disclosure scheme that might indexed threshold in a financial year on campaigns) corrupts the provide lessons for New Zealand? One political expenditure must disclose to the area is perhaps worth mentioning. This AEC details of gifts received exceeding electoral processes as concerns the disclosure obligations of the indexed threshold that were used for third parties. All four principles of a such spending. it undermines informed democratic political finance regime are Candidates and groups of candidates voting decisions. implicated here. Lack of transparency in are required, after every election, to relation to the funding of third parties provide to the AEC a statement disclosing (and their parallel campaigns) corrupts details of gifts received during the period the electoral processes as it undermines between elections if they exceeded the informed voting decisions. There is indexed threshold. Persons who have Second, there is the high threshold for also a question of fairness in politics, donated amounts exceeding the indexed anonymous contributions: AUD$11,200 specifically fairness between political threshold to candidates (and groups of (in New Zealand, it is NZ$1,000). parties and third parties: subjecting candidates) must also disclose details of This is the result of the Electoral and political parties to disclosure obligations such gifts to the AEC after the relevant Referendum Amendment (Electoral while leaving third parties exempt election. Integrity and Other Measures) Act 2006 potentially provides the latter with an This scheme is, as Graeme Orr (Cth), which lifted the cap on allowable unfair advantage. This unfair advantage characterised it, ‘lackadaisical’ (Orr, individual anonymous donations from further risks undermining the ability 2007). First, there is the high disclosure $1,000 to $10,000 (and indexed this cap to of political parties to discharge their threshold of AUD$11,200 (in New inflation). Such a high threshold seriously functions, in particular their electoral Zealand, the threshold is NZ$10,000). risks compromising transparency. It is function of providing choice and This has the effect of shrouding less about public disclosure of donations competition to voters. The danger here considerable portions of the parties’ and loans and more about records kept is that political parties focus more on income in secrecy. According to by parties: it will mean that parties fending off the attacks of third parties Commonwealth Parliamentary Library can legally accept larger sums without than on competing amongst themselves. research, the previous disclosure recording details of the donor. This And, finally, the principle of respect threshold of $1,500 or more resulted potentially renders the whole notion of for political freedoms clearly applies as in nearly three-quarters – 74.7% – of disclosure thresholds meaningless. disclosure obligations on third parties declared total receipts being itemised A further limitation of the federal will mean greater regulation of political over the period spanning from the 1998– disclosure scheme is the lack of timeliness. campaigning. 99 financial year to the 2004–05 financial The AEC has observed in relation to Presently, the federal scheme provides year. A threshold of $10,000 applied to federal annual returns that ‘[t]his form for greater transparency in relation to the the same data lowers this figure to 64.1% of … reporting and release can result in financing of third parties by subjecting (Miskin and Barber, 2006). Updating delays that can discount the relevance these groups to disclosure obligations, the research of the Commonwealth of making the information public’ a measure that is not contained in the Parliamentary Library, the Joint Standing (Australian Electoral Commission, 2000, current New Zealand Electoral (Finance

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 27 Regulating Political Contributions: Another View from Across the Tasman

Reform and Advance Voting) Amendment (NSW Select Committee) recommended limits do, however, need to be addressed Bill. On the other hand, the Australian that there be a ban on all political (Ewing, 2007, pp.227-30). First and scheme does not require third parties donations except those by individuals. foremost, instituting such limits by which spend beyond a certain amount to Contributions by individuals are further themselves will leave the parties seriously register with the AEC, a measure that is to be limited to $1,000 for each political underfunded given that the major in the bill. In my view, both registration party per annum (and $1,000 for each Australian political parties are presently and disclosure obligations should apply. independent candidate per electoral cycle) heavily reliant on large contributions. In the Concerns about the impact on political (NSW Select Committee, 2008, p.105). context of party government, jeopardising freedoms can be addressed through There are compelling arguments the existence of the parties must mean properly tailored provisions. for a limit on contributions such as placing the system of government at those recommended by the NSW Select risk. It is also unclear what impact the Limits on contributions Committee. Such limits will clearly act contribution limits will have on fairness Here the position in Australia is very as a preventive measure in relation to amongst the parties. Further, contribution similar to New Zealand in that there corruption: as the amount of money limits are likely to mean that parties will are very few limits on contributions to contributed by an individual increases, spend more time fundraising; they will candidates, their parties or other electoral need to persuade more individuals to part actors. Indeed, there are fewer limits with their money, a development that is than in New Zealand. Whereas New ... contribution limits likely to detract from the performance of Zealand bans foreign donations exceeding their democratic functions (apart from the NZ$1,000,3 there is no such ban in are likely to mean that participatory function). This will intensify Australia except in Queensland. The only especially if the ‘arms race’ between the other source restriction is a New South parties will spend more major Australian parties continues. Wales ban on political donations from These objections are, however, not property developers. The only restriction time fundraising; they will insurmountable. It is, firstly, imperative as to the amount of political funding is need to persuade more that contribution limits be adopted as that which applies under the Victoria’s part of a broader package of reform. One Electoral Act. This legislation prohibits individuals to part with of the central difficulties with the position holders of casino and gambling licences of those who advocate contribution limits and their related companies from making their money, a development as the principal, or even the only, reform political donations exceeding $50,000 in a that is likely to detract from measure is that they do not fully deal with financial year to each registered political the potential adverse impact of such limits. party. the performance of their To ameliorate such impact, there needs to In Australia, greater restrictions on be a reconfiguration of public funding political contributions have growing democratic functions ... of parties and candidates, including a support across the political spectrum. significant increase in such funding to Former New South Wales premier Morris make up for the shortfall resulting from Iemma has even advanced the radical limits on contributions. Such funding proposal of completely banning political should provide for sustainable parties, contributions in favour of a system of redress any inequities that arise from complete public funding. Following so does the risk of corruption. Therefore, contribution limits and also lessen the risk closely, his predecessor Bob Carr has bans on large contributions can directly of parties devoting an undue amount of advocated banning political contributions deter corruption (and also obviate the need time to fundraising. Further, contribution from organisations like trade unions for selective bans on property developers limits must be accompanied by election and companies and allowing only those and holders of gambling licences). On a spending limits. The latter limits will made by individuals. Former leader of the related point, such limits will promote staunch the demand that fuels the parties’ federal opposition Malcolm Turnbull and fairness in politics as they prevent the aggressive fundraising activities. the New South Wales Greens have similar wealthy from using their money to secure A vexed issue concerns the impact positions. Queensland premier Anna a disproportionate influence on the of such limits on trade union affiliation Bligh has also called for a national cap of political process. The result is to promote fees. My view is that membership fees political donations exceeding $1,000 and the fair value of political freedoms (within limits) should be exempted from has signalled that Queensland will act to despite limiting the formal freedom to any contribution limits. As the NSW implement such a cap by July 2010 if there contribute.4 Further, by requiring parties Select Committee correctly recognised, is no movement on the federal front. In to secure the support of a large base of ‘membership of political parties is an a bipartisan report, the New South Wales small contributors, such limits are likely important means for individuals to Legislative Council Select Committee to enhance their participatory function. participate in the political process’ (NSW on Electoral and Political Party Funding Significant objections to contribution Select Committee, 2008, p.113). Specifically,

Page 28 – Policy Quarterly – Volume 6, Issue 3 – August 2010 it involves participation within political federal ALP frontbenchers for the span of That the bargains struck in the sale parties, thereby directly enhancing the the conference. Tables at the conference of access and influence are not overt participatory function of parties. Whilst dinner were also sold for up to $15,000 or explicit makes little difference to the contribution limits permit membership for the privilege of sitting next to shadow question of corruption through undue fees below the limits, an exemption ministers (Grattan and Murphy, 2007). influence: the structure of incentives goes beyond such permissiveness by At the 2007 Liberal Party federal council, facing parties and their leaders once a encouraging party membership. Second, federal ministers auctioned off their time contribution is received remains the the exemption for membership fees should to the tune of thousands of dollars: a same, with their judgment improperly extend to organisational membership harbour cruise with Tony Abbott, then skewed towards the interests of their fees, including trade union affiliation fees. health minister, fetched $10,000, while a financiers (Beitz, 1984, p.137). With these A ban on organisational membership fees night at the opera with Helen Coonan, incentives, there is a double injury to the will give rise to anomalies, is misdirected then minister for communications, democratic process: wealthy donors are at ‘trade union bosses’ and constitutes an information technology and the arts, unfairly privileged, while the interests of unjustified limitation on freedom of party picked up a princely sum of $12,000. ordinary citizens become sidelined. Such association (Tham, 2010, ch.4). This activity took place under the council injury highlights how the sale of access theme of ‘Doing what’s right for Australia’ and influence is not only corrupt because Dealing with the sale of access and influence (Schubert, 2007). it undermines merit-based decision The sale of access and influence is making but is also unfair: contributors are endemic amongst the major Australian illegitimately empowered in the political parties. Here are some examples. The process, while others are illegitimately Victorian ALP’s Progressive Business ... the experience of other disempowered. has been described as ‘one of the most countries can often cast What, then, should be done as a matter efficient money-making operations of regulation? Limits on contributions, of in the country’ (Bachelard, 2007). Its light on how the role course, provide one way forward. There website states that its ‘express purpose are also other measures that could be more [is] building dialogue and understanding of money in politics is effective. For example, there could be a between the business community and variously addressed and ban on ministers and parliamentarians government’. It currently offers to two attending fundraising events, a measure types of membership, corporate and regulated. that has been adopted by Queensland small business, priced at $1,550 and $990 premier Anna Bligh. The sale of access per annum respectively, entitling the and influence can also be tackled through company to a set number of breakfast and greater transparency in relation to lobbying twilight ministerial briefings. The 2009 (which is what these occasions amount annual Progressive Business dinner, for to). There should an obligation to publish, example, witnessed Latrobe Fertilisers, a at regular intervals, specific information company vigorously advocating the use of on the meetings between lobbyists and Gippsland coal mines for the production government representatives, including the of fertiliser, paying $10,000 to the ALP name of the lobbyist/s, dates of contact, so that its chairman, Allan Blood, could These practices are emphatic instances meeting attendees and a summary of sit at the side of Victorian premier John of what Michael Walzer characterises as a issues discussed. This has been the Brumby and, in Blood’s words, ‘ben[d] his ‘blocked exchange’, where money is used to recommendation of a New South Wales ear’(Millar and Austin, 2009). The Liberal buy political power (Walzer, 1983, p.100). parliamentary committee and the New Party has a fundraising organisation They constitute a form of corruption. It South Wales Independent Commission that goes by the name of the 500 Club. is uncontroversial that public officials Against Corruption, as well as by various According to its website, membership of including elected officials are to act in British committees on standards in public the 500 Club will provide ‘a tailored series the public interest. A central part of this life (New South Wales Legislative Council of informal, more personally styled, early duty is to decide matters on their merits. General Purpose Standing Committee, evening events’, thus ‘adding a new level of The purchase of access and influence, p.60; NSW ICAC, p.101; Committee on value for … Club members’. however, creates a conflict between Standards in Public Life, 2000, p.36, 2008, Party meetings are also a favoured the public duty of deciding matters on p.4; Committee on Standards in Public venue for selling influence. At the merits and the financial interests of the Life, 2000, p.36, 2008, p.4). 2007 federal ALP conference, major party or candidate, resulting in some companies, including NAB, Westpac public officials giving undue weight to Conclusion and Telstra, engaged a high-price escort the interests of their financiers. This is Ewing and Issacharoff have identified service: at $7,000 per person, their corruption through undue influence a (non-exhaustive) list of factors that representatives were accompanied by (Lowenstein, 1989, pp.323-29). determine the choice of regulatory method

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 29 Regulating Political Contributions: Another View from Across the Tasman in the area of political finance. These We should abandon the misconceived what is possible, but often says very little factors relate to history, geography, class notion that there is an international ‘best as to what is desirable. structures, constitutional systems, party practice’, or that there is a continuum on 1 ‘Associated entities’ of political parties are defined in the systems, electoral systems and ideological which we can locate regulatory models as Commonwealth Electoral Act 1918, s.287. Essentially the traditions (Ewing and Issacharoff, 2006, ‘strong’ or ‘weak’. terms covers individuals or groups controlled by or operating for the benefit of a political party, as well as individual pp.6-7). If we take such complexity To make these points is not, however, members of or those with voting rights in a party. 2 Queensland recently has adopted a similar requirement that seriously – and we should – it is obvious to advocate a parochial stance closed off to political parties disclose gifts of $100,000 or more within that questions as to whether any country, overseas example; the experience of other 14 days. 3 The Electoral (Finance Reform and Advance Voting) including New Zealand, should adopt countries can often cast light on how Amendment Bill proposes amending this cap to make it particular regulatory measures are only the role of money in politics is variously clear it applies to each foreign donor, not to each particular donation. properly answered by an in-depth inquiry addressed and regulated. The aim is not to 4 John Rawls has referred to restrictions on contributions as a possible means for ensuring fair value of political liberties: into its specific circumstances and cannot deprecate the importance of comparative see Rawls, 1996, pp.357-8 and 2001, p.149. (and should not) be read off comparisons analysis but rather to point to its limits: (including the one essayed in this article). it broadens our horizons by gesturing to

References Miskin, S. and Barber, G. (2006) Political Finance Disclosure under Australian Electoral Commission (2000), Submission to the Joint Standing Current and Proposed Thresholds, Parliamentary Library Research Note Committee on Electoral Matters Inquiry into Electoral Funding and No 27/2006 Disclosure, http://www.aph.gov.au/house/committee/em/f_d/subseven. New South Wales Independent Committee against Corruption (NSW ICAC), pdf Report on Investigation into Planning Decisions Relating to the Orange Bachelard, M. (2007) ‘Taking their toll’, The Age, 14 May, p.9 Grove Centre Beitz, C. (1984) ‘Political Finance in the United States: a survey of New South Wales Legislative Council General Purpose Standing research’, Ethics, 95 (1) Committee, Badgerys Creek Land Dealings and Planning Decisions Committee on Standards in Public Life (2000), Standards in Public Life: New South Wales Select Committee on Electoral and Political Party first report of the Committee on Standards in Public Life: volume 1 Funding (2008), Electoral and Political Party Funding in New South Committee on Standards in Public Life (2008), Reinforcing Standards: Wales, http://parliament.nsw.gov.au/Prod/parlment/committee.nsf/0/1C sixth report of the Committee on Standards in Public Life A6D5A89FABD975CA25746D00063640 Ewing, K. and S. Issacharoff (2006) ‘Introduction’, in K. Ewing and Orr, G. (2007) ‘Political disclosure regulation in Australia: lackadaisical S. Issacharoff (eds), Party Funding and Campaign Financing in law’, Election Law Journal, 6 (1) International Perspective, Oxford: Hart Publishing Rawls, J. (1996) Political Liberalism, New York: Columbia University Press Ewing, K. (2007) The Cost of Democracy: party funding in modern British Rawls, J. (2001) in E. Kelly (ed.) Justice as Fairness: a restatement, politics, Oxford: Hart Publishing Cambridge, MA: Belknap Press Grattan, M. and K. Murphy (2007) ‘Hope in the hearts of Labor faithful’, Schubert, M. (2007) ‘Party hopes party won’t end so soon’, The Age, 4 The Age, 27 April, p.1 June, p.6 Joint Standing Committee on Electoral Matters (2008) Advisory Report Tham, J. (2010) Money and Politics: the democracy we can’t afford, on the Commonwealth Electoral Amendment (Political Donations and Sydney: University of New South Wales Press Other Measures) Bill 2008 Walzer, M. (1983) Spheres of Justice: a defense of pluralism and equality, Lowenstein, D. (1989) ‘On campaign finance reform: the root of all evil is New York: Basic Books deeply rooted’, Hofstra Law Review, 18 Millar, R. and P. Austin (2009) ‘$10 000 to sit next to Brumby’, The Age, 3 November, p.1

Page 30 – Policy Quarterly – Volume 6, Issue 3 – August 2010 Derek Gill, Stephanie Pride, Helen Gilbert, Richard Norman and Alec Mladenovic The Future State Project Meeting the The world we have made, as a result of the level of thinking we have done thus Challenges far, creates problems we cannot solve at the same level of thinking at which we of the 21st created them. Albert Einstein

Century Introduction Powerful global forces will reshape the context for New Zealand over the next few decades. They include increasing international connectedness, geopolitical power shifts, rapid technological developments, demographic changes, climate change, growing resource scarcity and changing values. Some of these changes have been in train for several decades; Derek Gill is a Senior Fellow, Institute of Policy Studies, School of Government, Victoria others have come to the fore more recently. Together they are University of Wellington. creating a world that is fast-paced, heterogeneous, complex Stephanie Pride is a Strategic Foresight consultant. and unpredictable. Within this context, New Zealand also Helen Gilbert is an independent consultant. Richard Norman is Senior Lecturer, HR faces some policy choices that are both unique and significant Management and Industrial Relations at the Victoria Management School, Victoria University – for example, concerning the recently extended exclusive of Wellington. Alec Mladenovic is a Research Assistant economic zone, and the completion of the Treaty of Waitangi at the Institute of Policy Studies, School of Government, Victoria University of Wellington. claims settlement process.

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 31 The Future State Project: Meeting the Challenges of the 21st Century

knowledge in their specialist areas on likely global and national developments over the next 20 years, drawing upon While New Zealand was well served by its recent futures work in New Zealand and public management system in the latter part overseas. Several structured discussions building on these papers ensured that of the 20th century, the evidence suggests cross-cutting themes and possibilities were adequately explored. In addition to that the system is less well designed for the the expert academic contributions, the challenges of the 21st century. project team captured tacit and emergent knowledge from a range of participants, including Mäori, business leaders, older people and younger people, migrants, rural dwellers and regional public sector managers. The current New Zealand public Methodology management system, designed for In commissioning the Future State The public management system: a need for stable and predictable conditions, has Project, the EIP steering committee asked change served the country well over the last 20 the IPS to look beyond the immediate The current New Zealand public years, but may not provide the optimal issues confronting policy makers (e.g. management system is largely the legacy platform for the challenges and ways of the consequences of the global financial of major state sector reforms in the working demanded by the 21st century. crisis, including the tightening fiscal mid-1980s. These reforms, bold and Recognising this imperative, in July 2009 position) and identify the next generation ground-breaking at the time, replaced the steering committee of the Emerging of longer-term issues likely to affect the unified, lifetime career service and Issues Programme (EIP)1 commissioned New Zealand. The project was to be monolithic sector-based departments the Institute of Policy Studies (IPS) to exploratory: to capture and synthesise with the apparatus of the ‘new public undertake an exploratory study known as existing knowledge and information. management’, including management by the Future State Project. This project had Original policy analysis of the public objectives. With minor modifications, three primary objectives: management system of the kind carried that public management model is still in • to identify major public policy issues out by Schick (1996) or the Advisory place today. Those developments helped of relevance to New Zealand over the Group on the Review of the Centre (2001) to lift the performance of the state sector next two decades; was not part of the terms of reference. The to a level that consistently earned high • to consider the current public man- scope of the project was also limited to the international ratings. According to Boston agement system2 and its capacity to main institutions of central government and Eichbaum (2007, p.136), the benefits perform in a much more dynamic (that is, public service departments and of the reforms included: world and an increasingly complex other non-trading entities, including greater productive efficiency (especially policy environment; and statutory Crown entities).4 Although local in the commercial parts of the public • to identify related research projects government was not part of the project sector), improvements in the quality of which could be pursued by the IPS (as the formal management framework certain services (e.g. the time taken to under the EIP. under which it operates is different from process applications for passports and As a result of the exploratory study, in the public management system in central welfare benefits has been drastically December 2009 the EIP steering committee government), almost all of the issues reduced), better expenditure control, approved five new research projects to be identified for central government are better management of departmental undertaken by the IPS during 2010–12. equally relevant to local government. budgets, greater managerial account- Three of those projects are related to In order to identify future policy ability, and major improvements in public management issues. The other issues, the IPS commissioned overview the quality of information available to two are concerned with specific policy papers from various experts on seven policy makers. issues: New Zealand’s ocean governance, areas relevant to policy making and and potential issues for Crown-Mäori the public sector. These covered New While New Zealand was well served relations after 2014, when the settlement Zealand’s evolving social structure and by its public management system in of historical Treaty of Waitangi claims is demography, technological developments, the latter part of the 20th century, the expected to be completed. the economic context, environmental evidence suggests that the system is less This article discusses the findings of implications, political and geo-political well designed for the challenges of the 21st the Future State Project and outlines the considerations, and public management century. Globally and locally, populations programme of research arising from it.3 We issues. The experts were asked to provide and their priorities and values are more turn first to the project’s methodology. a stock-take of the current state of diverse and issues are more interconnected.

Page 32 – Policy Quarterly – Volume 6, Issue 3 – August 2010 This makes gaining and maintaining Step change reducing obesity levels in the general consensus on policy directions over the The public policy challenge is to develop the population) cannot be achieved with the long haul more difficult. For many of step changes in policy design and delivery provision of public services alone but the challenges (e.g. water management that change trajectories – e.g. reducing will require the active contribution of and governance; growing obesity levels), frailty levels in an ageing population, citizens, businesses and other actors (co- there are no simple answers or widely increasing levels of educational success, production). For some complex issues (e.g. agreed and proven solutions and in some and stepping up the productivity ladder – breaking cycles of dysfunction mentioned areas (e.g. climate change) even problem so that the underlying drivers of spending previously), no one actor, including definitions are contested. At the same are reduced. government, has all the knowledge or the time, the public expects increased speed, Take, for example, spending on law ability to effect change independently. accessibility, customisation, transparency and order (e.g. prisons, police and courts): In the past, government doing things and user engagement5 in public services. If public expenditure relative to nominal for or to citizens may have been sufficient. the public sector is to respond effectively, gross domestic product increased from Achieving outcomes in the face of 21st- the public management system will need 0.5% in 1971/72 to 1.1% in 1988/89, to century challenges will depend on the to support a broader range of approaches 1.6% in 2009/10. The number of people actions of many players and will therefore and practices than currently. in prison or on probation has relentlessly increasingly require governments to increased while the overall level of crime do things with citizens (or even enable Challenges and required responses has been ‘dropping or stable’ since 1997. citizens to do things for themselves). The Future State Project identified four New Zealand now has the fourth highest Bourgon et al. (2009, p.11) have described key challenges for public policy develop- incarceration rate in the OECD after the this challenge as follows: ment over the coming decades: United States, Mexico and the Czech This context also pushes governments • affordability, which requires the ability Republic. A relatively small percentage of beyond hierarchy as a broad dispersion to achieve step change in policy design the population generates most criminal of responsibilities in society and the and delivery; activity. Achieving a step change would coordination of complex operations • more complex problems, involving require responses at two levels. First, constitute the trademark of govern- many players, which require the breaking out of the cycles of dysfunction ment activities. It challenges govern- capability for leadership of issues, co- among a relatively small number of fam- ments to experiment beyond direct design and co-production;6 ilies will require changes in how services service delivery with indirect means • a more diverse and differentiated are delivered by a range of government of delivery. It pushes governments population which requires the and non-government organisations, both beyond the provision of services to capability for differentiated responses; inside and outside the law-and-order citizens as an increasing number and sector. Secondly, at the policy level it will of public policy issues require the • a world of faster, less-predictable require replacing a ‘race to the bottom’ – active contribution of citizens in change which requires the capability political parties competing to be ‘tough creating common public goods. It for constant scanning and learning the on crime’ – with a more durable policy pushes governments beyond borders way forward.7 bargain about a responsible approach to of the traditional concept of the state sentencing policy driven less by a focus on towards a dynamic open system where Affordability punishment. organizations, services and users Compounding the immediate fiscal interact. pressures generated by the global recession Complex ‘multi-actor’ policy problems during 2008–09, New Zealand, like many requiring co-production and leadership Co-production and co-design other countries, faces significant longer- Complex ‘multi-actor’ policy problems Government will need to go beyond a term pressures on both the demand for, Many of the policy outcomes that will ‘delivery of services’ model to an approach and the cost of, publicly-funded services. be front-of-mind for government (e.g. that encompasses co-production and These will exacerbate the government’s fiscal difficulties. The cost pressures will arise because government services are generally labour-intensive and, in Achieving outcomes in the face of 21st- particular, are high users of skilled labour, and the cost of which is likely to continue century challenges will depend on the to rise. On the demand side, the ageing population will provide the key driver. actions of many players and will therefore Responding to these challenges simply by increasingly require governments to do ‘doing more with less’ will not be sufficient – the gap is too large for efficiencies alone things with citizens to bridge.

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 33 The Future State Project: Meeting the Challenges of the 21st Century

As noted, one approach to dealing with diversity is enabling citizens to engage in co-design and co-production New technologies are being developed to create initiatives and solutions and implemented more quickly than ever, tailored to the needs of a particular community or sector. Another approach creating what is possible faster than is to recognise and introduce alternative models of service delivery and harness legislative and regulatory processes can the full range of choices in relation to respond to. the funding mechanism, the nature and mix of providers, and client selection and choice to get the best fit for the citizens involved and the outcomes sought. co-design. Co-design harnesses the Trustful behaviour is needed to motivate Other options include making more knowledge and creativity of citizens and maintain this exchange. use of information technology to develop and staff in identifying problems and Current processes for policy a more profound understanding of the generating and implementing solutions development, service design and service citizenry and its needs. The private sector – it offers the opportunity to uncover delivery do not necessarily allow for working has developed ‘business intelligence the real barriers to, and accelerants of, in these less controlling, more deeply systems’. These use sophisticated data- progress. engaged ways with groups, communities mining and risk-screening techniques and businesses, so they will need to be to understand user experience and Leading not controlling adjusted or augmented (see the discussion behaviour. The information is then The government currently works with below regarding the upcoming IPS project used to match customers’ preferences citizens and businesses, but often in on reframing the practice of policy). to existing products and shape the very restricted ways. For example, under development of new products. In the existing models of consultation, one Diverse society and differentiated responses public sector, these technologies could party (government) often determines Diverse society be used to improve both government’s the timeframe, ambit of discussion, As is the case for many other countries, understanding of clients at risk of poor range of options to be discussed, process New Zealand’s population is changing life outcomes and the development and to be used and use to which the fruits of and becoming more diverse. This design of individualised interventions. consultation are put. If, in the future, the diversity is increasing across a variety of Information and Computer Techno- government requires the co-operation dimensions, including ethnicity, family logy can be harnessed to improve and contribution of New Zealanders in structures, geographical mobility and differentiated responses at an individual order to achieve results, public agencies sexual orientation. At the same time, client or case level as well as at a system may need to cede control in some areas expectations of public services are and service level. Expert decision tools (e.g. timeframes, processes used, etc.) in increasing as information technology have the potential to transform policy, order to harness the contributions needed. becomes harnessed to real-time, tailored service design and service delivery by If government organisations are to solve service provision in the private sector harnessing the richness of the data problems jointly with communities and (e.g. Amazon’s personalised customer that is available and the increasingly business groups, the public sector will recommendations). The ‘one size fits all’ powerful tools for interrogating it. These need to better understand how different Fordist state prevalent in the 20th century can be used to support professional groups experience the world, develop (Dunleavy et al., 2006) will no longer decisions with real-time, relevant, on- more trusting relationships and take on suffice to meet expectations or necessarily the-spot information. The extent of additional roles (moderator, facilitator, provide the most effective outcomes transformation will depend crucially on enabler, partner, listener and leader). in the 21st century. Heterogeneity is how ‘professionals’ and some professions Leading but not controlling will the new ‘normal’ and it is demanding respond to the use of these tools. increasingly require public employees to differentiated responses. engage with the public in different ways. Fast, unpredictable change and scanning, Public employees will need a range of Differentiated responses and learning the way forward ‘soft’ skills to build trust and negotiate The challenge for public services is to The picture of the world that emerged relationships, help with sense-making, move to differentiated responses as the from the Future State scan is one and ‘nudge’ the way towards solutions. norm rather than the exception and to characterised by fast-paced change, Developing the way forward will often work in more diverse ways as a matter growing complexity, and unpredictability. involve constructing shared goals, a of course. Some of the approaches and New technologies are being developed shared sense of what performance is and practices that may be useful are discussed and implemented more quickly than agreed frames for evaluating what works. below. ever, creating what is possible faster than

Page 34 – Policy Quarterly – Volume 6, Issue 3 – August 2010 legislative and regulatory processes can Figure 1: Sense-making respond to. In addition, the challenges already discussed here are increasing the unpredictability and rapidity of change. For example, more diverse populations and denser global interconnections are contributing to a more unpredictable world. In the midst of this speed, complexity, uncertainty and unpredictability, govern- ments still need to make decisions and act. However, the public management system that supports those decision-making processes has been predicated on relatively stable, predictable conditions. Existing processes, therefore, need to be supplemented by approaches more suited to sense-making under uncertainty, for example via scanning and learning the way forward. Source: Kurtz and Snowden, 2003, pp.462-83

Scanning on the view that the problem and solution • cede control and provide leadership; Working under uncertainty requires are known in advance. Learning the way • use multiple approaches; constant attention to what is emergent, forward is required in the ‘complex’ (top • provide differentiated responses; scanning widely, noticing nascent change left) quadrant in Figure 1 above, which • scan; and and imagining how it could unfold. In involves acting, sensing and learning and • learn the way forward. particular, it means listening to the ‘noise’ then responding. A public management system fit for in order to pick out the important signals. The private sector has developed the 21st-century needs to support all these Organisations can use the insights that techniques that involve learning the approaches whilst preserving existing arise from scanning to detect adverse way forward which go beyond ‘agile system strengths. conditions, guide policy, shape strategy development’. This approach was and explore the need for new products developed for situations where the The public management system: supporting and services. Scanning helps to provide a problem is known but the solution is not. 21st-century responses – key areas for greater ability to anticipate future changes. The ‘build to learn’ approach (Ries, 2009) change To quote Bourgon (2009, p.9): starts with small batches of ‘minimum New Zealand has a first-class public viable product’ and then works iteratively management system but one that was Countries with the best ability to with real user experience. This requires designed for the conditions of the late 20th anticipate and to take corrective systems that are set up to allow fast century. The preceding section outlined actions will have significant iterations and minimise the total time some major 21st-century challenges and comparative advantage. They will best through each micro-development loop. the the responses needed. The Future State be able to innovate, adapt and prosper It also requires quick response times to Project identified two overarching system in unforeseen circumstances and they fix problems for customers, as well as adjustments that will be required if the will be better able to shift the course of monitoring the metrics that stakeholders public sector is to respond appropriately: events in their favour. care about. This in turn creates an ability • a move towards greater system Some countries, such as Singapore, to tell ‘good’ change from ‘bad’ change coherence to support a whole-of- Britain and Finland, have established and to reverse ‘bad’ change early. government focus; and entities or programmes dedicated to • a move towards applying and scanning the future. 21st-century public management integrating a wider range of system approaches values in order to support a broader Learning the way forward The previous section has surveyed the range of responses. Responding to complex problems, where additional responses required in the face the exact problem and the solution are not of 21st-century challenges for government. Moving towards a whole-of-government focus known in advance, requires different ways of They include the capacity to: From a focus on public organisations ... working based on learning the way forward. • generate step change; A major formula of the New Zealand public Current service design is a response to the • engage in co-production and co- management reforms in the late 1980s was to problem of moving planned policy to the design; subdivide conglomerate departments into next stage of implementation. This is based • work in trustful ways; single-purpose organisations with clear roles

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 35 The Future State Project: Meeting the Challenges of the 21st Century

in Western Australia, senior leaders in public organisations are assigned responsibility New Zealand’s public management system for integrating the value chains around particular outcome areas. This could be was historically based on clan and hierarchy, augmented by the Canadian approach as were most traditional, career-for-life where senior staff members are assigned a ‘champion role’ for cross-cutting functions public services. The reforms of the 1980s such as evaluation and learning. Formal changes to the system alone will and 1990s used market values to reshape not, however, be sufficient to generate the step change in system coherence needed. structures and systems and increase Working across organisational boundaries, freedom to innovate. for example, is not currently precluded by the current New Zealand public management model, but nor is it enabled and accountabilities and to shift the locus of establishment of barriers to tackling or encouraged by the system settings. control for output delivery to chief executives complex problems that require cross- Earlier IPS research under the EIP (i.e. the and boards of public organisations. This cutting solutions. 2008 project Better Connected Services for principle achieved strong focus on known A model that has emphasised Kiwis) found that working collaboratively and knowable problems. specialisation and pre-specified account- across the public sector requires a specific Recent initiatives by central agencies abilities struggles to respond to new set of skills and dispositions. Hard-system have focused on further improving issues that demand systems thinking, factors, such as structures, appropriations, the performance of individual public interconnected responses and innovation. differences in pay terms and conditions, organisations. Good reasons exist for this The challenge is to both continue to focus and formal mandates, were less important emphasis on improving the efficiency on bottom-line organisational efficiency than soft-system factors, such as a sense of of public organisations. There is no and increase the focus on the top line, urgency (a burning platform), leadership direct counterpart in the non-market thereby harnessing the components of the (public entrepreneurs, guardian angels or core public sector to the signals of public sector to act coherently to address and fellow travellers), learning by doing, competitive product markets or the identified problems. In this rebalancing, and working from an outside-in client discipline provided by the market for a greater focus will be needed on perspective. Respecting and valuing the corporate control through the threat of understanding, managing and assessing world views, competencies, knowledge takeovers in private sector organisations. whole-of-system performance. and contribution of those from different The core public sector needs comparable The boundaries in the New Zealand teams, agencies and sectors is a baseline mechanisms to identify poor performers system start at the top, with a remarkably setting for learning together about what and raise performance, and the central fragmented structure of ministerial will work. It is linked to a whole-of-system agencies’ initiatives, such as the State portfolios. Fewer and wider ministerial and solutions-focused approach, where Services Commission-led Performance portfolios would simplify accountabilities the agendas and interests of individual Improvement Framework (State Services and reduce the barriers to collaboration on contributors are subsumed within the Comission, 2010), can make a useful cross-cutting issues. Similarly, requiring endeavour of problem solving. This contribution by helping to lift bottom- ministers to be formally accountable to the suggests that the nature of the changes to line organisational performance and public for articulated desired outcomes the public management system to support realise additional efficiency gains. A focus for their portfolio, in the same way that 21st-century public services may need on organisational performance alone, bureaucrats are accountable for delivering to be different from the changes of the however, is unlikely to generate the step outputs, would strike a better balance late 1980s. Rather than major alterations change in capability required. Challenges between outputs and outcomes. Other to the ‘hardware’ of the architecture such as achieving trajectory changes in possibilities are to strengthen a collective of government (e.g. organisational law-and-order spending described earlier senior leadership cadre as a counterbalance structures), the majority of the changes need systems that support and drive to the vertical accountabilities and will need to be subtle and multifaceted holistic, all-of-government responses. dominance of individual chief executives, modifications to the ‘software’ of the and a re-launching of efforts to use circuit- mental models used in the public sector. … to a focus on organisations and system breaker methods.8 performance Other jurisdictions have systems that Supporting a broader range of responses One of the drawbacks of single-purpose promote greater shared accountability From a few default modes ... organisations with clear roles and in relation to negotiated outcomes and New Zealand’s public management accountabilities has been the development measure system progress in terms of system was historically based on clan of tunnel vision by them and the movement towards outcomes. For instance, and hierarchy, as were most traditional,

Page 36 – Policy Quarterly – Volume 6, Issue 3 – August 2010 career-for-life public services (Figure 2 Figure 2: Competing values framework below). The reforms of the 1980s and 1990s used market values to reshape structures and systems and increase freedom to innovate. During the past decade this has been overlaid with a different form of hierarchical control, driven by the desire to minimise risk. As a result, the current system relies heavily on a limited range of values associated with market and hierarchical quadrants. Yet these limits are not readily apparent to those who work with or in the systems on a day-to-day basis. Instead, these ‘default’ modes merely appear as the normal and natural way of conducting the business of the public service. If New Zealand’s public management system is considered in terms of the competing values framework developed by Cameron et al. (2006), it Source: Cameron et al., 2006, p.66 becomes apparent that it is predicated on and supports values in the bottom two productive solutions. This will be a Policy practices need to be reframed to quadrants (see Figure 2). more sophisticated response, involving accommodate explicit choices about The Future State Project indicates a conscious choice of modes, taking a wider range of approaches to policy, that effective responses to 21st-century into account the underlying values service design and service delivery. challenges will require collaboration, they embody. Command and control As with the changes needed to generate trust, agility, creativity and innovation: approaches are not likely to be a good a step change in system coherence, formal values associated with ‘clan’ and ‘network’ choice, especially where achieving desired changes to support a broader range of quadrants. The skills needed to operate in outcomes depends on co-production. responses will need be made in tandem these ways are currently underdeveloped In the future, no one standard operating with significant shifts in the ‘software’ of compared to the skills needed to operate procedure will be fit for purpose, and the the mental models used in and about the in ‘hierarchy’ and ‘market’ modes, and capacity to make the right choices will be public sector. will thus need to be augmented. What central to the overall performance of the Some responses to these challenges is not required is a simple shift from an public sector. require greater shared understandings operating style based on the values of the Current approaches to policy among politicians, public servants and the ‘hierarchy’ and ‘market’ quadrants to one development, for example, have mainly public as a basis for more durable policy based on those of the ‘clan’ and ‘network’ been developed to respond to ‘technical’ bargains. These ways of working should quadrants. Rather, the challenge is to build problems solvable by ‘expert’ solutions. enrich rather than undermine democracy, new strengths and capabilities so that a While suitable for simple or technical although it may require subtle adjustment more integrated approach can be applied. problems, that approach to policy making in the nature of the interactions between The work of the public sector is already will not be sufficient for emerging ministers and public officials. It will require multifaceted, and an increasingly diverse challenges that require not just a technical public officials to take a strong leadership population and more complex challenges fix but engagement, behaviour change or role in articulating a shared vision, but will call for increasingly differentiated other kinds of co-contribution. In short, this must be done in a constitutionally responses to achieving outcomes. Hence, this ‘normal’ default mode for policy appropriate way. This in turn may trigger the public management system will need to development needs to be augmented by a a refinement of the role of ministers. support multiple modes and approaches, wider range of approaches. For example, drawing on values from all four quadrants where solutions to problems are not Future research of the competing values framework. known and new responses will need to The findings from the Future State be developed, the role of a policy analyst Project led the EIP steering committee … to matching style to context would be transformed from top-down to endorse five new research projects. Looking ahead, agencies collectively analysis and prescription to acting as These projects will be carried out by the will need to apply a range of models a broker and facilitator for bottom-up IPS during 2010–12. Three of the projects and approaches to issues and have the learning. The public sector of the future relate to public management matters: knowledge and skills to adopt the best will need to adopt new and multiple directions for reforming the New Zealand combination in each case to generate approaches to service design and policy. public management model; reframing the

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 37 The Future State Project: Meeting the Challenges of the 21st Century

practice of policy; and citizen-centred the number of stakeholders and diversity government departments from that of alternative service delivery.9 The other two of interests involved. isolated vertical silos to that of hubs projects are policy specific, dealing with responsible for co-ordinating large New Zealand’s ocean governance, and Direction for reforming the New Zealand networks of public and non-state issues for Mäori–Crown relations after public management model sector entities; 2014, when all historical claims against The aim of this 15-month project is to • the need to redirect the focus of the Crown by Mäori are expected to have explore more deeply some of the specific central agencies away from controlling been settled.10 While these two projects challenges identified in the Future individual department performance to will concentrate on policy, they are also State Project and consider the concrete ensuring co-ordination and coherency ‘live’ examples of challenges demanding implications for the public management in a new, whole-of-government mode new types of responses from the public system. The project will seek to examine of working; and management system because of their issues such as: • the consequential demand on the complex nature, the unknown territory, • the need to redefine the role of public management system for a workable approach to whole-of- system performance accountability. Box 1. Ocean governance: ocean governance is difficult for a range the New Zealand dimension of reasons, including the dynamic and Ocean governance The focus of this two-year project start- complex relationships and connections Ocean governance provides a clear ing in 2010 is to explore the policies that exist in coastal marine ecosystems, illustration of an extremely complex and institutional arrangements New and the increasing human demand on policy area where a large number of Zealand needs to put in place to protect, these ecosystems. Governance, however, public sector and non-state actors have manage and harness the resources of is made more complicated by the frac- substantial conflicting interests and its marine environment. Overall, marine tured framework of laws, regulations and different political agendas, and where governance remains sector-based and practices that exist at different govern- new, systems-based ways of organising, fragmented among a range of policies, ment levels. The mandates of various working and monitoring within the public programmes and agencies with marine agencies that implement and enforce management system will be essential if a responsibilities. There are 18 main existing systems often conflict with each successful integrative approach to policy statutes, 14 agencies and six govern- other. No institutional framework exists development and implementation is to be ment strategies for marine management for establishing a common vision and formed (see Box 1). and planning (Vince and Hayward, a common set of objectives. What is 2009). New Zealand has also signed needed is a systems perspective that Reframing the practice of policy over 13 international conventions with facilitates thinking about interactions This project, which is scheduled to start marine implications, including the 1992 among multiple biophysical and human in 2011 and conclude in 2012, will examine Convention on Biological Diversity and drivers and directs management atten- the challenges for policy development in the United Nations Convention on the tion that can reflect these interactions. fast-paced, complex and unpredictable Law of the Sea (Foster, 2003). Effective environments. Current approaches to policy development are primarily designed Box 2. Post-Treaty settlements issues tionship, and stimulate informed public to respond to ‘technical’ problems that This IPS-led project is being undertaken debate around these issues. The project are solvable by ‘expert’ solutions. That as a joint venture with Te Kawa a Mäui will be forward-looking in the sense that approach on its own will not be sufficient (Mäori Studies) at Victoria University its focus is not on the resolution of past for emerging challenges that require of Wellington, beginning in 2010 and grievances but on issues such as social not just a technical fix but engagement, lasting for up to two years. It aims to service delivery, resource management behaviour change or other sorts of co- provide the policy community and the and constitutional arrangements, includ- contribution. Are techniques such as co- wider public with a better understanding ing the status of ongoing Mäori parlia- design and co-production viable responses of emerging Crown–Mäori relations, and mentary representation and the Treaty of to better engagement and more effective help inform the design of institutions Waitangi. The issues that will continue outcomes? If policy practices need to be and policies that support the continuing to arise in the Crown–Mäori relationship reframed to include these modes, what development of a prosperous, cohesive are all large, complex and often very dif- are the changes that need to be made to and fair society for Mäori and non- ficult conceptually and politically. In rela- policy processes, conventions and ways of Mäori. In particular, the project seeks to tion to many of them there are strongly working to enable this? bring together a diverse set of high-qual- entrenched viewpoints, and in some ity analyses which focus on a small set cases there will be major difficulties in Post-Treaty settlements of topics that are considered of impor- finding consensus. In addition to the ocean governance tance in the emerging Crown–Mäori rela- project, the post-Treaty settlements project provides examples of the kinds of

Page 38 – Policy Quarterly – Volume 6, Issue 3 – August 2010 complex issues where a reframing of the of New Zealand’s public sector will have a 2 For the purposes of this article, the public management system comprises the arrangements for governing a country, current policy practice could benefit the significant bearing on our ability to adapt including the means by which policies are developed and implemented by public sector organisations and the outcomes achieved (see Box 2). and flourish. processes for funding, managing and monitoring those The current public management organisations. 3 A more detailed account of the Future State Project is Citizen-centred alternative service delivery system, designed for relatively stable contained in Gill et al. (2010). 4 This recognises that New Zealand’s democracy is highly This 12-month project, commencing and predictable conditions, has served centralised, with over 90% of public expenditure being later in 2010, will consider the impact New Zealand well over the last 20 years. allocated through central government. 5 ‘User engagement’ or ‘user generation’ refers to the active of population diversity on the effective The evidence suggests, however, that it involvement of users in defining and generating products and delivery and implementation of public will not provide the optimal platform services. 6 ‘Co-design’ harnesses the knowledge of citizens and staff in services. It will investigate the extent to for addressing the challenges of the creating solutions. Co-production occurs where both public organisations and citizens/clients must perform tasks if which customisation of services, such as 21st century. The Future State Project results are to be achieved, such as revenue collection. in the health and welfare sectors, is needed identified the need for a rebalancing of 7 Learning the way forward, discussed below in more detail, is a response to complex problems involving acting learning and to meet different needs, and alternative public management settings to strengthen then responding. 8 Circuit-breaker teams were developed in response to the options for service delivery. Customisation overall system coherence. At the same Review of the Centre to address complex cross-cutting options may include the use of co-design time, there is a need to broaden the issues (see Minister of State Services, 2004). Although the approach showed initial promise, efforts were not sustained and co-production approaches, alternative range of policy and delivery approaches and the initiative withered and died. funding mechanisms, various modes of supported, whilst retaining current system 9 These public management projects are being led by Derek Gill, a senior fellow of the IPS. Any enquiries relating to these production, and tailoring the nature and strengths. In approving five new research projects can be directed to him at: [email protected]. 10 The project leader for the ocean governance project is Dr mix of providers. projects, the EIP is seeking to contribute Mike McGinnis, a senior fellow of the IPS. For information to a deeper understanding of how the and other enquiries about the project, he can be contacted by email at: [email protected]. The post-Treaty Conclusion public management system needs to settlements project is being led by Associate Professor Paul Callister, who is Deputy-Director of the IPS. Enquiries about New Zealand is part of an increasingly change in order to support a step change the project can be sent to: [email protected]. fast-paced, heterogeneous, complex and in performance. unpredictable global environment. How 1 The EIP is an initiative established in 2006 between public this country responds will determine its service chief executives and the School of Government at future prosperity and the well-being of Victoria University of Wellington to carry out research into significant policy and management issues relevant across a its citizens. The capability and capacity range of public service agencies.

References Foster, A. (2003) ‘New Zealand’s ocean policy’, Victoria University of Advisory Group on the Review of the Centre (2001) Report of the Advisory Wellington Law Review, 34, pp.469–96 Group on the Review of the Centre, Wellington: State Services Gill, D., S. Pride, H. Gilbert and R. Norman (2010) The Future State, Commission working paper 10/08, Wellington: Institute of Policy Studies, Victoria Boston, J. and C. Eichbaum (2007) ‘State sector reform and renewal University of Wellington in New Zealand: lessons for governance’, in G.E. Caiden and T. Su Kurtz, C.F. and D.J. Snowden (2003) ‘The dynamics of strategy: sense (eds), The Repositioning of Public Governance: global experience and making in a complex and complicated world’, IBM Systems Journal, 42 challenges, Taipei: Best-Wise Publishing (3), pp.462–83 Bourgon, J. (2009) ‘New governance and public administration: towards a Maxwell, G. (2009) ‘Understanding and responding to criminal offending’, dynamic synthesis’, public lecture hosted by the Australian Department in G. Maxwell (ed.), Addressing the Causes of Offending: what is the of the Prime Minister and Cabinet, Canberra, Australia, 24 February evidence?, Wellington: Institute of Policy Studies, Victoria University of Bourgon, J. et al. (2009) Literature Scan # 1: On the Need for a New Wellington Synthesis of Public Administration, from A New Synthesis of Public Minister of State Services (T. Mallard) (2004) ‘Practical guide to attacking Administration project, available at: http://www.ns6newsynthesis.com/ problems released’, media release, http://www.beehive.govt.nz/ documents node/20364 Cameron K.S., R.E. Quinn, J. Degraff and A.V. Thakor (2006) Competing Ries, E. (2009) ‘Pivot, don’t jump to a new vision’, http://www. Values Leadership: creating value in organizations, Cheltenham, UK: startuplessonslearned.com/2009/06/pivot-dont-jump-to-new-vision. Edward Elgar Publishing html, accessed 28 April 2010 Drucker, P. (1964) Managing for Results, New York: Harper Schick, A. (1996) The Spirit of Reform: managing the New Zealand state Dunleavy, P., H. Margetts, S. Bastow and J. Tinkler (2006) ‘New public sector in a time of change, Wellington: State Services Commission management is dead: long live digital-era governance’, Journal of State Services Commission (2010) Performance Improvement Framework, Public Administration Research and Theory, 16 (3), pp.467–94 http://www.ssc.govt.nz/display/document.asp?docid=7700, accessed Eppel, E., D. Gill ,M. Lipps and B. Ryan (2008) Better Connected Services 2 July for Kiwis, Wellington: Institute of Policy Studies, Victoria University of Vince, J. and M. Hayward (2009) ‘New Zealand oceans governance: Wellington calming turbulent waters?’, Marine Policy, 33 (2), pp.412–18

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 39 David Bromell Income Inequality and the Economy of Ideas

Growing unequal Among OECD countries, New Zealand has moved from 2009). The ratio of the mid-point of bottom to top salary bands in public having relatively low income inequality in the early 1980s to service organisations is not 2.6 or 5.5 but, having above average inequality by the mid-2000s (OECD, on average, approximately 11.0. Things are marginally less equal in the university 2008). Research conducted by Bryan Perry (2009) at the sector, where the ratio is, on average, Ministry of Social Development shows that in New Zealand approximately 13.0. In the private sector, I estimate that the ratio between the mid- in 2008 the percentile ratio of income inequality (equivalised point of the average salary of a call centre operator in New Zealand ($37,500) and disposable household income before deducting housing the value of the ‘compensation’ package costs) for P90 (top decile) to P10 (bottom decile) was 4.0, paid to Paul Reynolds as chief executive of Telecom in the year to 30 June 2009 (an compared to 3.3 in 1984. The ratio for P80 (top quintile) to estimated $7.2 million according to the National Business Review (2009)) is 191.0.1 P20 (bottom quintile) for before-housing costs in 2008 was Even the least sceptical may wonder 2.6, compared to 2.3 in 1984. whether one employee is capable of providing, on average, value for money Those ratios are calculated for household data. Of course, there are much greater for one hour of work that is 11, 13 or 191 incomes and over the population as a inequalities at the level of individual times greater than that provided by a whole, in order to assess trends over time income. The ratio for P80 to P20 for fellow employee.2 and to provide internationally comparable individual incomes in New Zealand’s I am personally inclined, moreover, working-age population (aged 18 to 64) in to the idea that inequality damages David Bromell is a principal advisor in the 2009 was around 5.5. democracy. For New Zealand to be Ministry of Social Development and a senior In the state sector the salary bands of viable in a global economy, we need associate of the Institute of Policy Studies. chief executives and the vice-chancellors effective democracy as well as efficient This article is based on notes prepared for a symposium on economic inequality hosted by of universities are a matter of public markets. As John Myles (2007, p.18) puts the University of Otago on 9 June 2010. record (State Services Commission, it: ‘Markets need democracy to make

Page 40 – Policy Quarterly – Volume 6, Issue 3 – August 2010 market economies viable for people.’ inequality and social stratification and public policy on the ‘trickle down’ notion Marked income inequality risks damaging improving social mobility at the bottom. that if only the wealthy are able to earn democracy to the extent that it creates two As Runciman (2009) puts it, Wilkinson more and keep more of their wealth, publics: one preoccupied with making and Pickett invite us to stop trying to join they will have an incentive to work ends meet, the other with keeping and everything up, and to start seeing how it harder, invest more, take more risks and growing its wealth; whereas effective all fits together. drive economic development, which will democracy depends on a common public Turning a ‘big idea’ like that into public eventually benefit those at the bottom. in which citizens see themselves as ‘all policy comes, however, at a price. The cost These ideas are mutually exclusive, at least in the same boat’ (Cunningham, 2007; can be cognitive, economic and political. in part. (We would also have to let go of Dewey, 1927). some of our operative thinking about Cognitive price merit, risk, reward, ‘do it yourself’ and ‘Equality is better for everyone’? First, ideas come with a cognitive price ‘free loading’.) Richard Wilkinson and Kate Pickett in because claims as to truth, or value, if they Even if ideas and ways of thinking The Spirit Level: why equality is better mean anything at all, may at least partially do not logically exclude one another, for everyone (2010) present a significant exclude other claims to validity. partially or completely, they can crowd body of evidence that there is a strong For example, the late Brian Barry, a each other out of thinking space and association between social stratification, self-styled ‘democratic socialist’, proposed public discourse. For example, since the and specifically economic inequality, and (1998, pp.22-4) that in order to avoid social late 1980s New Zealand’s population has health and social problems in developed exclusion, nobody ought to have less than become significantly more ethnically nations. The evidence they present suggests half the median income, and only a few diverse, due to higher Mäori and Pacific that ‘we are affected very differently by ought to have more than three times the fertility rates, inter-ethnic partnering the income differences within our own median income. That is, the ratio of the and parenting, and changing patterns of society from the way we are affected by top income to the bottom income in a migration. New Zealand today has a more the differences in average income between society ought not to exceed six to one. ethno-culturally diverse population than one rich society and another’ (Wilkinson and Pickett, 2010, p.11, italics theirs). In fact, ‘when we make comparisons between When public discourse focuses on social different societies, we find that these social problems have little or no relation group identities, rather than on the common to levels of average incomes in a society’ (ibid.). They acknowledge that association good and the norms of mutual support that does not prove causality, and that even if underpin redistribution within a welfare there is a causal relationship, this does not tell us what is cause and what is effect state, political will to address economic (pp.190–6). Their book ‘simply points out that if you increase the income and status inequality can be seriously compromised ... differences related to these [health and social] problems, then – unsurprisingly – the problems all become more common’ (p.196). Median weekly income in New Zealand many other developed nations (Bromell, They assert, moreover, that the ill for all people aged 15 years and over from 2008, pp.21–57). This diversity, together health and social problems associated all sources (including for people with with the Mäori resurgence and Treaty of with income and status differences affect no source of income) in the June 2009 Waitangi settlements process since the all members of an unequal society, not quarter was $538 (Statistics New Zealand, mid-1970s, has meant that public discourse just those at the bottom, although it may 2009). Barry’s proposal implies that no for over 30 years has been dominated by a disproportionately affect those who are New Zealander should have a gross weekly politics of identity rather than a politics relatively least well off.3 The solution they income of less than $270 ($14,000 per of social stratification, social mobility and propose (ibid., pp.238–9) to persistent and annum) or more than $1,600 ($84,000 per economic equality. This ‘crowding out’ of a interconnected social problems is neither annum). politics of equality is regrettable, because, discrete and siloed interventions, nor If we think that Barry, and Wilkinson at least in the short run, immigration ‘joined-up’ services and programmes to and Pickett, are right, then we cannot and ethnic diversity tend to reduce social address the symptoms of distress within consistently maintain, at the same time, solidarity and social capital (Putnam, the health, education, justice and welfare that in the absence of externalities and 2007). When public discourse focuses on sectors. What is required is a concerted other sources of market failure a market social group identities, rather than on the programme to address the cause of negative free of policy intervention will allocate common good and the norms of mutual social outcomes by reducing economic resources efficiently. Nor can we base support that underpin redistribution

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 41 Income Inequality and the Economy of Ideas

within a welfare state, political will to drive to get ahead will emigrate and take • economic and regulatory reform, address economic inequality can be their capital, skills and entrepreneurial immigration policy, and investment seriously compromised (Bromell, 2008, attitudes with them. As it is, around one in infrastructure, research and pp.295–9; 2009; cf. Banting, 2005; Banting million New Zealanders (about one in development, capital per worker, and and Kymlicka, 2006). five) are currently living overseas. education and training (including The cognitive, or at least rhetorical, On the other hand, unless significantly raising management skills price of a politics of equality is that we accompanied by greatly improved labour and performance), to improve labour may have to focus less on our differences productivity, raising gross incomes at the productivity and create a high-wage than on what we have in common; less lower end by increasing minimum wage economy; on social group identities and special rates will drive up the price of goods and • active labour market policies to move rights than on our common identity, our services and make New Zealand exports people off welfare and into sustainable common needs, our common good. and tourism products less competitive. employment; • employment law which discourages both under- and over-employment; The issue is rather that government has not • redistributive policies implemented through tax and transfers; thought through its policy interventions as a • policies to promote economic democracy and greater equality in gross coherent package that is explicitly designed incomes before taxes and transfers: for example, the setting or raising of a to reduce social stratification and economic minimum wage, the introduction of a inequality and to promote social mobility guaranteed minimum income, and/or a ceiling on remuneration at the top, at at the bottom. least in the state sector; • encouragement of collective bargaining of wages and terms and conditions of employment; Economic price Raising benefit levels would have a fiscal • tax policies and social marketing Secondly, ideas come with an economic impact on the Crown accounts. It could to encourage volunteering and price. This takes us to the core business of also create a disincentive to employment philanthropy and otherwise support public policy: the definition and analysis and independence, when there is strong a strong community and voluntary of problems; the identification of options; evidence that the best route out of poverty, sector; and evidence-gathering about correlation, at least for the vast majority, is through • investment in public broadcasting, and causation and ‘what works’; and the paid work. Long-term work absence has, in institutions, urban design, public calculation of cost-benefit and trade- in general, a negative impact on health and transport and public space, so that offs, who pays, risks and their mitigation, well-being (Royal Australasian College of citizens of all sorts can rub shoulders, and contingency for unintended Physicians, 2010). encounter the reality of one another’s consequences. Reducing inequality within a society lives, build social capital and social Wilkinson and Pickett emphasise that in order to address the cause of health cohesion and constitute a common what matters is the level of inequality we and social problems could well be a good public. finish up with, not the particular route idea. But talk is cheap unless practicable All these options come at a price and that gets us there (Wilkinson and Pickett, proposals are developed to implement their cost-benefit needs to be calculated 2010, pp.245–7). They nevertheless outline this ‘big idea’, with robust analysis of who within a fiscal context that determines two broad strategies: one using taxes and will pay and how, and of the price we, as certain limits to and opportunities for benefits to redistribute income; the other a society, will put on equality, as on our what can be undertaken at any particular achieving narrower differences in gross present levels of inequality. point in time. And in fact, none of these market incomes before any redistribution. There is, in fact, a range of conceivable has been entirely absent from government Both strategies come at a price. options that, in some combination or policy during the period inequality has New Zealand is a small, geographically other, could reduce social stratification grown in New Zealand society. The isolated country with an open economy, and economic inequality: issue is rather that government has not a highly mobile population and a • public investment in the early years, thought through its policy interventions limited talent pool, operating within a and in health and education services as a coherent package that is explicitly competitive international labour market. generally, to enable upwards social designed to reduce social stratification Redistribution through tax and transfers, mobility at the bottom; and economic inequality and to promote or a cap on higher salaries, run the risk • investment in state housing and social mobility at the bottom. The focus that a larger number of those with the income-related rents; has been rather on ‘baking a bigger cake’

Page 42 – Policy Quarterly – Volume 6, Issue 3 – August 2010 and ‘the rising tide that lifts all boats’, ‘Should the Government reduce income life, and to do so in ways that are with a great deal of public expenditure differences between people?’, 40% said yes environmentally sustainable and that will on programmes and services (whether compared to 52% in 1992. both mitigate against and adapt to climate ameliorative or merely palliative) to A similar shift in values was evidenced change. relieve the symptoms of social distress.4 in a 2010 UMR Research survey of 750 There seems to be little political will people (ibid., p.15).6 To the statement in New Zealand at present for such a Political price ‘Inequality continues because it benefits New Deal, and that is unlikely to change Thirdly, ideas, and especially big ideas, the rich and powerful’, 44% agreed, unless an alternative vision of society come with a political price. compared to 60% in 1992. To the statement captures the hearts and minds of New The job of democratically elected ‘Large income differences are necessary Zealanders. Short of a national crisis to politicians is to develop, promote and for New Zealand’s economic prosperity’, shake things up (a major earthquake in vote for policies that express the will of 32% disagreed, compared to 60% in 1992. the capital? a volcanic eruption in the the people they represent in Parliament. These findings are consistent with those of Auckland region?), building the case for The 2005 and 2008 general elections the New Zealand Election Study (http:// a politics of equality will be a long-term were contested, in significant part, over tax cuts. The National-led government elected in 2008 has delivered these, in a relatively even-handed manner, to general ... [Wilkinson and Pickett] urge developed approval. nations to trade off an economic growth The prime minister has made much of the 2010 tax changes as being ‘fairer’ path and material consumption against (Key, 2010a). They are fair, if fairness is construed as a roughly proportional improvements in quality of life as measured impact across all income bands, rather by health, happiness, friendship and than as a narrowing of the gap between rich and poor. The Treasury has estimated the community life,... impact of the tax changes as a percentage of average disposable household income across all income bands as between 0.4 and 0.7% (English, 2010b, p.9). The tax www.nzes.org/) and give little hope that task. Specifically, we need to improve our measures announced in the 2010 Budget the electorate will demand a reduction in understanding of: will probably make no measurable income inequalities any time soon. • when and in which respects inequality difference to income inequality in New A democratically-elected government, is bad for almost everyone, and when Zealand. Indeed, in a pre-Budget warm- if it wishes to retain power, will implement poor outcomes exhibit strong social up the prime minister urged Kiwis not to policies that reflect its manifesto gradation and why; be jealous if the rich get more – ‘because commitments and electoral mandate. • whether, in which respects and to the rich are crucial to the economy’ (Key, To do otherwise, even from the highest what extent the relationship between 2010b). of ethical motives, courts failure in the economic inequality and poor social If Wilkinson and Pickett’s ‘big idea’ is to polls. Wilkinson and Pickett concede that, outcomes is one of causation rather get any political traction in New Zealand, in fact, ‘governments have usually not than correlation; then the electorate will have to want, and pursued more egalitarian policies until • the relationships that prevail over demand, a different kind of fairness, a they thought their survival depended on time between income inequality, skills, different kind of future New Zealand. it’ (Wilkinson and Pickett, 2010, p.241). labour productivity, social capital and The New Zealand Listener recently the efficient operation of economic highlighted some findings of Massey A New Deal for the 21st century? markets; University’s Department of Marketing’s Wilkinson and Pickett invite ‘a historic • social mobility in New Zealand, International Social Survey Programme shift in the sources of human satisfaction particularly at the bottom and in terms (New Zealand Listener, 2010).5 When from economic growth to a more sociable of urbanisation and the geographical the respondents were asked ‘Are income society’ (ibid., p.231). They suggest that clustering of disadvantage; differences in New Zealand too large?’, developed nations are ‘close to the end of • life-course and intergenerational 62% said yes, compared to 75% in 1999 and what economic growth can do for us’ (p.5). accumulation and transmission of 72% in 1992. When asked ‘Should people They urge developed nations to trade off advantage and disadvantage; and on higher incomes pay a larger share of an economic growth path and material • the dynamic relationships between their income in taxes than those on lower consumption against improvements in ethno-cultural homogeneity/diversity, incomes?’, 53% said yes, compared to 60% quality of life as measured by health, social capital and attitudes to income in 1999 and 71% in 1992. When asked happiness, friendship and community inequality and redistribution.

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 43 Income Inequality and the Economy of Ideas

Above all, a politics of equality will chairperson relative to an unskilled factory worker have law and order (English, 2010a). scarcely changed since 1992, with median values of 4.0 in 5 The New Zealand survey was conducted in 2009 by a mail require a great deal of public debate about 1992 and 4.3 in 2009. survey of around 1,000 responses. Some questions were not 3 Runciman (2009) points out that Wilkinson and Pickett asked in 1999. Margin of error of ±3% or less (at the 95% the kind of society we want to create here fudge an important distinction between the claim that in confidence level). and the price we are willing to pay, now more equal societies almost everyone does better, and 6 Margin of error of ±3.6% (for a 50% figure at the 95% the claim that everyone does better on average. Compare confidence level). and in the future, to achieve it. the sub-titles of various editions of The Spirit Level: ‘why more equal societies almost always do better’; ‘why greater equality makes societies stronger’; ‘why equality is better for 1 See further Wilkinson and Pickett (2010, p.250) on the ratio everyone’. of CEO pay to average worker pay. 4 New Zealand currently spends close to $51 billion (72% of 2 New Zealand responses to the International Social Survey core Crown expenditure, or 25% of New Zealand’s nominal Programme on perceived deserved incomes for a company GDP) on social security and welfare, health, education, and

References National Business Review (2009) ‘How Paul Reynolds’ pay stacks up Banting, K. (2005) ‘The multicultural welfare state: international against the competition’, 26 August, http://www.nbr.co.nz/article/how- experience and North American narratives’, Social Policy and paul-reynolds-pay-stacks-against-competition-109069, accessed May Administration, 39 (2), pp.98–115 2010 Banting, K. and W. Kymlicka (eds) (2006) Multiculturalism and the New Zealand Listener (2010) ‘All things being equal’, 1-7 May, pp.14-21. Welfare State: recognition and redistribution in contemporary OECD (2008), Growing Unequal? Income distribution and poverty in democracies, Oxford and New York: Oxford University Press OECD countries, country note: New Zealand, http://www.oecd.org/ Barry, B. (1998) Social Exclusion, Social Isolation and the Distribution dataoecd/45/43/41527985.pdf, accessed May 2010 of Income, CASE paper 12, Centre for Analysis of Social Exclusion, Perry, B. (2009) Household Incomes in New Zealand: trends in indicators London School of Economics, http://ideas.repec.org/p/cep/sticas/12. of inequality and hardship, 1982 to 2008, Wellington: Ministry of html, accessed May 2010 Social Development, http://www.msd.govt.nz/about-msd-and-our-work/ Bromell, D. (2008) Ethnicity, Identity and Public Policy: critical publications-resources/monitoring/household-incomes/index.html, perspectives on multiculturalism, Wellington: Institute of Policy accessed May 2010 Studies, Victoria University of Wellington Putnam, R. (2007) ‘E Pluribus Unum: diversity and community in Bromell, D. (2009) ‘Recognition, redistribution and democratic inclusion’, the twenty-first century’, the 2006 Johan Skytte Prize Lecture, in R. Openshaw and E. Rata (eds), The Politics of Conformity in New Scandinavian Political Studies 30(2), pp.137–74 Zealand, North Shore City: Pearson Royal Australasian College of Physicians (2010) Realising the Cunningham, F. (2007) ‘What’s wrong with inequality?’ in Why Inequality Health Benefits of Work: A position statement, Sydney: Royal Matters, in 1,000 Words or Less, Toronto: Canadian Centre for Policy Australasian College of Physicians, http://www.racp.edu.au/index. Alternatives, http://www.policyalternatives.ca/publications/reports/why- cfm?objectid=84C0100F-E554-2865-DFEF6FEE0666A005, inequality-matters-1000-words-or-less, accessed May 2010 accessed June 2010 Dewey, J. (1927) The Public and its Problems, New York: H. Holt Runciman, D. (2009) ‘How messy it all is’, review of The Spirit Level: why English, B. (2010a) Budget 2010: key facts for taxpayers, Wellington: more equal societies almost always do better, London Review of Books, New Zealand Government, http://www.treasury.govt.nz/budget/2010/ 31/20, 22 October, pp.3–6, http://www.lrb.co.uk/v31/n20/david- taxpayers/b10-taxpayers.pdf, accessed June 2010 runciman/how-messy-it-all-is, accessed June 2010 English, B. (2010b) Budget 2010: minister’s executive summary, State Services Commission (2009), Annual Report of the State Services Wellington: New Zealand Government, http://www.treasury.govt.nz/ Commission for the year ended 30 June 2009, Wellington: State budget/2010/execsumm, accessed May Services Commission, http://www.ssc.govt.nz/display/document. Key, J. (2010a) Budget 2010 about opportunity for Kiwis, prime minister’s asp?NavID=272&DocID=7425, accessed May 2010 media statement, 20 May 2010, http://www.beehive.govt.nz/release/b Statistics New Zealand (2009), New Zealand Income Survey: June 2009 udget+2010+about+opportunity+kiwis, accessed May quarter, Wellington: Statistics New Zealand, http://www.stats.govt.nz/ Key, J. (2010b) quoted in ‘Budget gifts for the poor’, http://www.stuff. browse_for_stats/work_income_and_spending/income/nzincomesurvey_ co.nz/ national/politics/3707735/Budget-gifts-for-the-rich, 18 May hotpjun09qtr.aspx, accessed June 2010 Myles, J. (2007) ‘Income inequality and democracy’, in Why Inequality Wilkinson, R. and K. Pickett (2010) The Spirit Level: why equality is better Matters, in 1,000 Words or Less, Toronto: Canadian Centre for Policy for everyone, London: Penguin (first publ. 2009) Alternatives, http://www.policyalternatives.ca/publications/reports/why- inequality-matters-1000-words-or-less, accessed May 2010

Page 44 – Policy Quarterly – Volume 6, Issue 3 – August 2010 Paul Brown, Paul Callister, Kristie Carter and Ralf Engler Ethnic Mobility Is it Important for Research ethnicity questions. Research into the growth of New Zealander-type responses and Policy in the census has focused primarily on whether these Analysis? are valid responses, how they should be recorded and

Introduction reported on, and how these Public policy discussions decisions might affect the involving ethnicity often overall usefulness of ethnicity assume that people remain data. One question in this Paul Brown is a Principal Statistician at Statistics New Zealand. He has a long-standing in fixed ethnic categories over research has been where interest in the statistical measurement of ethnicity, having contributed to the development their lifecycles. While New these responses came from: of New Zealand official statistics in this field over the past three decades. Zealand research carried out that is, what these people Paul Callister is the Deputy Director of the Institute of Policy Studies. He has had a long a decade ago had already recorded in the previous interest in ethnic measurement and public policy. identified ethnic mobility census. Asking this question Kristie Carter is Senior Research Fellow at in the census in relation explicitly recognises that the Department of Public Health, University of Otago, Wellington. Kristie’s main research interests are around the ethnic and socio- to Mäori, the dramatic people may not always record economic determinants of health and the implications of epidemiological research on and somewhat unexpected the same response in similar policy decision making. She is also interested in psychological outcomes and longitudinal and increase in ‘New Zealander’- surveys over time, or even epidemiological methods. Ralf Engler has been an analyst with the type responses in the 2006 across a range of surveys at Ministry of Education for 6½ years, working firstly in the area of early childhood education census provided a very high any one point in time. People and teacher supply, and more recently in tertiary education. His current focus is on the profile example of people may be ethnically mobile, or progression of students from secondary school to tertiary education. changing their responses to at least appear to be mobile.

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 45 Ethnic Mobility Is it Important for Research and Policy Analysis?

Internationally, there is much research negative. Reflecting a range of positive rapidly after the successes of the Black interest in ethnic mobility. The literature incentives, the growth of American Irish Power movement in the 1960s. suggests that there are three possible in the United States was far faster than Other forms of ethnic mobility sources of change in responses about natural population growth would predict can make understanding social change ethnic affiliation: unreliability in (Hout and Goldstein, 1994), as has the difficult. An example is the effect of measurement; changes due to alterations growth of Native Americans (Light and intergenerational ethnic mobility on in ethnicity questions; and conscious Lee, 1997; Eschbach, 1993). In relation to social mobility. In the US, Duncan and changes in ethnic affiliation (Carter et the Irish, Waters (2000) observes that in Trejo (2005) studied the progress of al., 2009). Conscious changes in ethnicity the 19th century Irish in the US were seen Mexican Americans. Controlling for other can be over a lifetime, or there could as a separate race from other Europeans. factors, they found that, on average, US- At this time, the stereotype of the Irish born Mexican Americans who married population was of the group having high non-ethnic Mexicans were substantially rates of crime, a lack of education and more educated and proficient in English ... there are three negative family values. Waters suggests that language than Mexican Americans possible sources if population predictions had been made who married other Mexicans. More in the early 20th century, the anticipated importantly, the children of intermarried of change in growth in the Irish population would have Mexican Americans were much less likely been very low. Yet such predictions would to be identified as Mexican than were repsonses about not have taken into account the rise in the children of marriages where both ethnic affiliation: education and income amongst Irish, as partners were Mexican. The researchers well as a growth in the popularity of Irish concluded that such selective ethnic unreliability in culture helped by dance and music groups mobility might bias observed measures such as Riverdance gaining international of intergenerational progress for Mexican measurement; prominence. Americans. changes due to In Canada, Guimond (2006) has Three areas of research show that explored ethnic mobility in relation to there is some degree of ethnic mobility alterations in the growth of Aboriginal populations. in New Zealand. These are the recent Between 1986 and 1996 the census count census mobility project undertaken ethnicity questions; of the population with Aboriginal origin by Statistics New Zealand to better went from 711,000 to 1,102,000, with a large understand the growth in the ‘New and concious part of this growth occurring between Zealander’-type responses; a University changes in ethnic 1986 and 1991. Guimond noted that this of Otago, Wellington study of three waves fast growth could not be explained by of the longitudinal Survey of Family, affiliation. natural and migratory increases alone. Income and Employment (SoFIE); and a He also noted that the exceptional growth number of Ministry of Education studies of populations of Aboriginal origin seen of transitions from school to tertiary nationally occurred off Indian reserves education. In this paper we begin by and was particularly strong in urban briefly outlining the findings from these areas. Guimond speculates as to why the three areas of research. On the basis growth occurred, and points to a number of these findings, as well as the broad of important legislative and social international literature, we argue that changes which improved the profile and the mobility taking place in New Zealand be intergenerational mobility. When status of Aboriginal peoples. He goes on is important for both researchers and more than one ethnic group can be to note that understanding the source policy makers. Given this importance, we recorded in surveys, as is the case in New of ethnic mobility is important. There conclude by considering some emerging Zealand, conscious changes may involve was a very strong rise in the number of ideas for handling ethnic mobility when an alteration of ethnic identification post-secondary-educated graduates of undertaking policy analysis. (switching from one ethnicity to another), Aboriginal origin, and he shows that or the addition of an ethnic group to this increase is in part explained by the The census and the ‘New Zealander’ (complexification) or deletion of a group ‘arrival’, as a result of ethnic mobility, of response from (simplification) a previous set of more educated individuals, rather than by Statistics New Zealand has monitored identifications. Hence ethnicity at any greater school success among individuals inter-ethnic mobility between censuses point in time is a complex social process already identified as Aboriginal people in over the past three decades. Understanding that needs more understanding. 1986. As another example, Simpson and patterns and trends in inter-ethnic mobility Switching groups can be the result of Akinwale (2007) show that in Trinidad has contributed to the development of the changing incentives, both positive and the count of young adult Africans grew models used to produce demographic

Page 46 – Policy Quarterly – Volume 6, Issue 3 – August 2010 estimates and projections of the size and small, it was nevertheless significant ethnic group. In multivariable regression composition of ethnic populations, as well enough to feature in the government analyses it was found that individuals who as aiding understanding of the dynamics statistician’s decision not to change the changed ethnicity were also more likely to of ethnic identity. Inter-ethnic mobility format of the ethnicity question for the be younger, to be born overseas, to live monitoring has been based on research 2011 census (Statistics New Zealand, 2009, in a family with children, to be in more studies which have linked questionnaires p.iii). It should also be noted that the net deprived groups and to have poorer self- of individuals between successive censuses flows result from considerably larger gross rated health. in order to compare and analyse the flows, as illustrated in the summary of the This exploratory analysis showed consistency of individual responses to four studies reported above. some fluidity around the concept of self- the ethnicity questions. The most recent The strong growth of a ‘New identified ethnicity. study, comparing the 2001 and 2006 Zealander’-type response created censuses, also investigated the impact of challenges for Statistics New Zealand, as the increased New Zealander response at well as for researchers, as to how to present the 2006 census on inter-ethnic mobility historic census time series as well as how (Brown and Gray, 2009). to undertake population projections. In The strong growth Over the past three decades, gross terms of the latter challenge, a decision inter-ethnic mobility between the major was made to provide an option to combine of ‘New Zealander’ ethnic categories has grown from around European and New Zealander responses in 4% in 1976–81 to 9% in 1991–96. Then, in a new category called ‘European or Other’ -type response 2001–06 it increased markedly to 20%. (Statistics New Zealand, 2009, p.3). created challenges The growth trend is associated with an increase in the reporting of multiple SoFIE and ethnic mobility for Statistics New ethnic identities over this period, which In 2009, researchers from the University of have increased from around 5% to 10%. Otago, Wellington undertook exploratory Zealand, as well as However, the elevated result for 2001–06 research aimed at identifying changes in for researchers, as to reflects also the increased level of New self-identified ethnicity of individuals over Zealander responses at the 2006 census. three years of a longitudinal survey, and how to present historic The 2001–06 study showed that 92% of how this varied by certain demographic the growth of New Zealander responses factors. The researchers used data from census time series at the 2006 census can be attributed to 2002 to 2005 from the longitudinal Survey people who at the 2001 census reported of Family, Income and Employment as well as how to themselves as ‘New Zealand European’ run by Statistics New Zealand (N = undertake population and not in any other ethnic group. This 17,625) (Carter et al., 2009). Self-defined confirmed what was the major driver ethnicity was recorded (independently) projections. of the apparent increase of the New every year and participants could record Zealander population at the 2006 census multiple ethnicities. Ethnicity was coded and the associated apparent decrease of to level 1: NZ European/ Päkehä, Mäori, Ministry of Education’s school–to–tertiary the New Zealand European population. Pacific, Asian and Other. Combinations transitions data The 2001–06 study also showed that of ethnicity variables were also created There is much interest in the outcomes the increased New Zealander response in from the perspective of each of the level 1 of students after they leave school. This the 2006 census also exerted an influence groups. Thus, from the Pacific perspective ‘transition period’ is of interest both to on the Mäori, Pacific Island Peoples a respondent could be sole Pacific, government policy makers and to tertiary and Asian groups, with net inter-ethnic Pacific plus at least one other group, or institutions which might enrol these mobility rates for these groups ranging non-Pacific (any other ethnic group(s) students in their courses. The Ministry of between –1.0% and –2.0%. That is to say, excluding Pacific). A change in ethnicity Education has combined several sources there were net losses from these groups was defined as any change in the reported of data to compile a ‘transitions’ data to the New Zealander group. In contrast, ethnic group(s) of an individual over the set to study and analyse the outcomes of these groups showed net gains from the first three waves of SoFIE (i.e. from wave 1 students before and after this transition New Zealand European group, ranging to 2; from wave 2 to 3). period. These sources of data include between +0.5% and +4.2%. The New Overall, 8% of respondents changed school achievement data from the Zealand European influence on these ethnicity at least once during the three New Zealand Qualifications Authority groups was consistent with the previous waves of the survey. In logistic regression (NZQA), and tertiary enrolment data 1991–96 study (Coope and Piesse, 2000). analyses the strongest predictor of changing for students undertaking formal study, While the impact of the 2006 New self-identified ethnicity was reporting industry training and various targeted Zealander response on Mäori, Pacific Mäori, Pacific and Asian ethnicity at wave training schemes, sourced from the Island Peoples and Asian was relatively 1, as well as identifying with more than one ministry’s own data or from the Tertiary

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 47 Ethnic Mobility Is it Important for Research and Policy Analysis?

Education Commission. In each of these real changes in people, all the more so group never has a Mäori ethnic response sources of data, information is recorded considering the time of transition from (either as a sole response or as part of dual about a student’s ethnicity. school to tertiary education. or multiple ethnicity). The ‘ever’ group In the school achievement data and has a Mäori response in one or more of in formal tertiary enrolments, up to three Other data sources the surveys. For the ‘sole’ Mäori, this is the ethnic responses are recorded. The data Any longitudinal study has the potential only response in each survey. Like the ‘total sources are linked using a unique student to record ethnicity at more than one point counts’ ethnic measure for cross-sectional identification number, referred to as the in time. The long-running Christchurch ethnic data, there is some overlap between National Student Number (NSN). Using Health and Development Study has the ‘ever’ and ‘never’ groups between the NSN, the transitions data set provides enquired about respondents’ ethnic different ethnic groups. The never, ever student-level information about a student’s group affiliations more than once and and sole ethnic has previously been used ethnicity at school and in their tertiary discovered some mobility. However, they only for the Mäori ethnic group, and do not consider this to be of importance, predominately in health research. While attributing it more to measurement error this method enables the reporting and More investigation than real change (Fergusson, 2009). More analysis of changing ethnicity, it also recently initiated surveys, particularly allows for the analysis of within-ethnic- of ethnic mobility the Growing Up in New Zealand study group variation. which aims to track a birth cohort to age Education data shows the effect of may be carried out 20, have the potential to ask about ethnic using such categories. When data on with more waves identification of the parents and child the transition from school to tertiary more than once over the life course. education is analysed using this method of SoFIE data, as In addition to the Ministry of of reporting ethnicity, insights are Education data, there are other provided that are not seen with methods well as from future administrative data sets which have more that assume ethnic group homogeneity. data collection and than one recording of ethnic responses. For example, students with average or One is in the health sector, where, while above-average academic school results – results from the those engaging with the health system will who achieved NCEA level 3 and met the in theory have a unique National Health University Entrance (UE) requirement– Growing Up in New Index number (NHI), basic demographic and who attended decile 1 or 2 schools details, including ethnicity, can change as are significantly less likely to go on to Zealand study and people have various contacts with health bachelor-level study than similar students qualitative research providers. from high- or mid-decile schools; but only if they are students from the sole-Pasifika asking people Some possible ways to use ethnicity when and Mäori ethnic groups (the effect is there is ethnic mobility stronger for sole-Mäori) (Engler 2010a). about their ethnic As discussed, ethnic mobility can be These same students, once they enrol in identification. inherent in longitudinal data if ethnicity bachelor-level qualifications at university, questions are asked at more than one show lower likelihood of passing most of point in the survey, even when asked the their first-year courses if they are sole- same way. One pragmatic response to the Pacific students (Engler, 2010b). In 2008 studies. Research reported on in 2008 ‘problem’ of changing ethnicity is to ignore the overall proportion of Mäori school indicated that students’ ethnicity recorded any change, choosing instead a single leavers who met the UE requirement in tertiary education can differ from that point in time in the data capture series – was 43%. This, however, is comprised of recorded at school (Baldwin, 2008). In perhaps the first response – and assuming 54% of ever-Mäori students who met this some exploratory research, Baldwin that this is the ‘correct’ one. But this seems standard, versus 29% of sole-Mäori. Also found that 15% of students changed their arbitrary and avoids social explanation. in 2008, 27% of Mäori students studied ethnicity overall, but this figure was 18% However, there are methods by which at tertiary level 4 or above within two for students who were identified as Mäori ethnic mobility can be reported and used years of leaving school, compared with in school but who identified as Mäori/ in analysis. Some recent education studies 43% of students overall. The figure is 40% European in the tertiary data. While have used a method of reporting ethnicity for ever-Mäori, while for sole-Mäori it is Baldwin did not speculate on why this was, that is able to incorporate the ethnic 16%. it was widely assumed that these changes mobility seen in longitudinal data. The These findings suggest particular constituted some kind of error in the data method, using never, ever and sole ethnic disadvantage faced by a ‘core’ group of or collection process. As this paper makes group categories, is described more fully Mäori and Pacific people. This supports clear, however, it is just as likely that these in Engler (2010a). However, using Mäori cross-sectional data that has consistently changes in ethnic identification represent as an example, with this method the ‘never’ shown a gradient of disadvantage,

Page 48 – Policy Quarterly – Volume 6, Issue 3 – August 2010 Managing Mixed Financing of Privately Owned Providers in the Public Interest By Judith Smith, Nicholas Mays, Crispin Ovenden, Jacqueline Cumming, Janet McDonald and Jonathan Boston

Managing Mixed Financing of produces a service that meets Privately Owned Providers in public goals. These criteria the Public Interest compares are then drawn together in an the financing of general practice assessment framework that policy (primary health care), long-term makers can use when deciding on care of older people, legal aid, their approach to mixed financing. and early childhood education The framework assesses mixed in New Zealand, Australia, financing from the perspectives of and England. Each service is the state, providers, and users. characterised by a different mix of public and private finance. The authors identify the criteria An Institute of Policy Studies publication by Judith Smith, Nicholas Mays, Crispin Ovenden, Jacqueline Cumming, Janet McDonald and Jonathan Boston deemed important when Publication July 2010 Format A5 paperback, pp 116 ISBN 978-1-877347-39-9 Price $27 (including P&P within New Zealand) assessing whether a particular Place your order by email, phone, fax or mail to: Institute of Policy Studies, Victoria University of Wellington mix of public and private finance Email: [email protected] Telephone +64 4 463 5307, Fax + 64 4 463 7413 PO Box 600, Wellington, New Zealand An invoice will be issued with your order.

CLIMATE CHANGE AND MIGRATION Edited by Bruce Burson

Many South Pacific island states are identifies concepts, frameworks, and vulnerable to the impacts of climate possible policy responses to deal change. Indeed, some are already effectively with what may become experiencing population movement one of the greatest humanitarian due to environmental events and challenges of the 21st century. processes likely to be exacerbated Bruce Burson is a human rights by future climate change. Yet others lawyer specialising in refugee and are at risk of disappearing altogether migration law and policy. He was over the coming century and beyond. the principal conference organiser The potential for climate change to on behalf of the Institute of Policy generate population movement over Studies. the coming decades, therefore, raises substantial domestic and international policy challenges. This edited volume An Institute of Policy Studies publication by Bruce Burson is the result of a conference held in Publication July 2010 Format A5 Paperback, pp 184 Wellington in July 2009 that examined ISBN 978-1-877347-40-5 Price - $27 (including P&P within New Zealand) these and related issues. Drawing on Place your order by email, phone, fax or mail to Institute of Policy Studies, Victoria University of Wellington a range of perspectives, this volume Email [email protected] Telephone +64 4 463 5307 Fax +64 4 463 7413 PO Box 600, Wellington, New Zealand An invoice will be issued with your order

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 49 Ethnic Mobility Is it Important for Research and Policy Analysis?

when pushed into choosing one group, notions of ‘blood’ and ‘dilution’ by racial/ and all others. This is in contrast to the ethnic intermixing and negative or Chapple (2000) focus on sole Mäori as the positive connotations depending on who While we still outlier in social and economic outcomes. is making the judgment? Or does such While still not telling us the cause of a change simply indicate errors in the consider current disadvantage, a benefit the longitudinal data? Further research would help clarify ethnic measures data have over cross-sectional data is some of these issues. This could include that we have more than one recording of research into the benefits and drawbacks used in official people noting a ‘sole’ response, suggesting of methods of self-prioritisation: that is, that this may indicate a stronger primary ways of allowing respondents themselves statistics to affiliation. to determine a potentially enduring ‘main’ be sufficiently ethnicity. Further research With some shifts we also need to be robust for most We are only now beginning to understand clearer as to whether we are seeing mobility the level of ethnic mobility taking place in or instead what could be considered a of the policy uses New Zealand. More longitudinal research relabelling. The ‘New Zealander’ response made of them is needed to further clarify the fluidity of may be an example of this, where the ethnicity over time. More investigation old labels no longer seem appropriate to in New Zealand, of ethnic mobility may be carried out some respondents. In all this research, with more waves of SoFIE data, as well it is especially important to understand the dynamic as from future data collection and results how young adults develop their own nature of ethnic from the Growing Up in New Zealand self-identified ethnicity. Therefore, we study and qualitative research asking need to do more research in the younger identity poses people about their ethnic identification. generations (those aged 15–25). Some Such research is needed to explore a wide overseas research suggests there may be some problems range of questions pertaining to how, why less interest in national or ethnic identity and where people change their ethnic among this age group, especially the so- for consistent identification. called majority (Fenton, 2007). statistical As yet, we remain uncertain as to what types of ethnic mobility are important Conclusion measurement of and why ethnic mobility occurs. We While some within the research need to know more about what might be community have long been aware of ethnic ethnicity. considered a major versus a minor ethnic mobility, the growth of the New Zealander category change. For example, is a shift response in the 2006 census demonstrated from a European and Samoan response to the wider public that ethnic responses to just a Samoan response of the same can change over time. Subsequent New importance as a shift from Samoan only Zealand studies of ethnic mobility to European only? highlight that it is important especially We also need to be cautious about for Mäori and Pacific people. While we adopting new ways of dealing with still consider current ethnic measures from sole Mäori and Pacific, through inconsistent ethnic responses across used in official statistics to be sufficiently combinations of Mäori and Pacific, time. While the ‘never’, ‘ever’ and ‘sole’ robust for most of the policy uses made of lessening for those who record Mäori categorisation is one potential method, them in New Zealand, the dynamic nature and/or Pacific and European responses, we need to better understand its strengths of ethnic identity poses some problems through to those being, on average, the and weaknesses. As an example, in health for consistent statistical measurement most advantaged in the sole European data we may have a situation where there of ethnicity. As such, there needs to be group (Gould, 2000; Chapple, 1999, 2000; are six recordings of ethnicity for a person, ongoing monitoring, investigation and Chapple and Rea, 1998). However, the with five being ‘sole’ Mäori and one Mäori discussion by researchers to progress reasons for this gradient are not clear and and European. This person would be understanding of ethnic identity dynamics Kukutai (2003) suggests that social policy reported as being ‘ever’ Mäori. But would over lifecycles and over time. This is makers should not put too much weight this ‘ever’ Mäori be similar to a person required not only to ensure measurement on such cross-sectional gradients. In who had five recordings of European quality, but to broadly map the changing terms of Mäori outcomes, Kukutai argues only and one of Mäori and European? Is cultural fabric of New Zealand society, that the key differences within the wider there some potential to weight responses; and in particular to identify more clearly Mäori ethnic group are between those or is this a throwback to thinking around where disadvantage lies. who identify primarily as non-Mäori, being ‘fractions’ of Mäori, with imposed

Page 50 – Policy Quarterly – Volume 6, Issue 3 – August 2010 Acknowledgements policy makers and analysts. The ideas Research Programme and funding from This paper emerged from a March 2010 expressed in this paper are those of the the Foundation for Research, Science and workshop jointly hosted by the Institute authors and do not represent the views Technology helped support the running of Policy Studies and the Population of their employers. The paper benefited of the workshop. Studies Centre at Waikato University. The from some helpful comments by David 1 Using census data, Coope and Piesse (2000) found aim of the forum was to share ideas about Pearson. examples of ethnic mobility with, as an example, a 23% processes of ethnic identity construction, SoFIE-Health is primarily funded inflow and 6% outflow for theä M ori ethnic group in 1996 compared to the 1991 group. identification and change, in order to by the Health Research Council of New 2 http://www.growingup.co.nz/. enhance the usage of ethnic data by Zealand as part of the Health Inequalities

References Eschbach, K. (1993) ‘Changing identification among American Indians and Baldwin, K. (2008) ‘Nominated ethnicity changes of students from Alaska Natives’, Demography, 30 (4), pp.635–52 secondary to tertiary education: secondary to tertiary transitions’, Fenton, S. (2007) ‘Indifference towards national identity: what young paper presented to the ‘Who Are We: ethnicity and identity’ seminar, adults think about being English in Britain, Nations and Nationalism, Statistics New Zealand, 3 September 13 (2), pp.321–39 Brown, P. and A. Gray (2009) ‘Inter-ethnic mobility between the 2001 Fergusson, D. (2009) personal communication and 2006 Censuses: the statistical impact of the New Zealander Gould, J.D. (2000) ‘Counting Mäori’, New Zealand Population Review, 26 response’, in Statistics New Zealand, Final Report of a Review of the (2), pp.1–19 Official Ethnicity Standard 2009, Wellington: Statistics New Zealand, Guimond, E. (2006) Ethnic Mobility and the Demographic Growth of appendix 2 Canada’s Aboriginal Populations from 1986 to 1996: report on the Carter, K.N., M. Hayward, T. Blakely and C. Shaw (2009) ‘How much demographic situation in Canada 1998–1999, Statistics Canada, and for whom does self-identified ethnicity change over time in New Demography Division Zealand? Results from a longitudinal study’, Social Policy Journal of Hout, M. and J.R. Goldstein (1994) ‘How 4.5 million Irish immigrants New Zealand, 36, pp.32–45 became 40 million Irish Americans: demographic and subjective Chapple, S. (1999) ‘Explaining patterns of disparity between Mäori and aspects of the ethnic composition of white Americans’, American non-Mäori employment chances’, Labour Market Bulletin, 1, pp.70– Sociological Review, 59 (1), pp.64–82 100 Kukutai, T. (2003) The Dynamics of Ethnicity Reporting: Mäori in New Chapple, S. (2000) ‘Mäori socio-economic disparity’, Political Science, 52 Zealand, discussion paper prepared for Te Puni Kökiri, Wellington: Te (2), pp.101–15 Puni Kökiri Chapple, S. and D. Rea (1998) ‘Time series analysis of disparity between Light, I. and C. Lee (1997) ‘And just who do you think you aren’t?’, Mäori and non-Mäori labour market outcomes’, Labour Market Society, 34, pp.28–30 Bulletin, 1 and 2, pp.27–144 Simpson, L. and B. Akinwale (2007) ‘Quantifying stability and change in Coope, P. and A. Piesse (2000) ‘1991–1996 inter-censal consistency ethnic group’, Journal of Official Statistics, 23 (2), pp.185–208 study’, unpublished paper, Statistics New Zealand Statistics New Zealand (2009), Final Report of a Review of the Official Duncan, B. and S.J. Trejo (2005) Ethnic Identification, Intermarriage, and Ethnicity Standard 2009, Wellington: Statistics New Zealand Unmeasured Progress by Mexican Americans, NBER working paper Waters, M.C. (2000) ‘Immigration, intermarriage, and the challenges of 11423 measuring racial/ethnic identities’, American Journal of Public Health, Engler, R. (2010a) School Leavers’ Progression to Bachelors-level Study, 90 (11), pp.1735–7 Wellington: Ministry of Education Engler, R. (2010b) Academic Performance of First-Year Bachelors Students at University, Wellington: Ministry of Education

Policy Quarterly – Volume 6, Issue 3 – August 2010 – Page 51 Mining in the Conservation Estate Lasting Lessons from the Schedule Four Debate

Monday 23 August, Government Buildings lecture theatre one Earlier this year the Government invited public submissions on whether to delete about 7,000 hectares of the conservation estate from Schedule 4 of the Crown Minerals Act, in order to allow mining. Following public submission, the Government announced in July that the suggested deletions would not proceed, but that other parts of the conservation estate would be actively targeted for mining development. The reopening of political debate on commercial development of conservation lands raises wider issues about the balance of development and conservation values. This one-day symposium will explore these issues. Programme 8.45 am-10.30 am Policy, Legislation and Procedures Philip Woollaston, Minister of Conservation 1989-90, Origins of the legislation and policy relating to minerals in conservation areas Tom Bennion, Wellington barrister and Victoria University lecturer in Environmental Studies, Comparing access provisions for mining and other activities

10.45 am-12.15 pm Economic analyses Carolyn Van Leuven, Ministry of Economic Development, The analysis behind Government policy Geoff Bertram, Institute of Policy Studies, Mining in the New Zealand Economy

1.00 pm-2.30 pm International perspectives: Balancing Environmental Values and ‘Development’ Gundars Rudzitis, University of Idaho, Mining and development, theory and praxis: The United States experience and beyond

Viktoria Kahui, University of Otago, Pressure from coastal Registration oil drilling in Norway: lessons for the debate on mining in Institute of Policy Studies New Zealand conservation estate Victoria University of Wellington 2.45 pm-5.00 pm Lessons from the Schedule 4 Debate: Where Next? PO Box 600 Chris Baker, Straterra, Don’t let a few facts get in the way Wellington of a good protest E: [email protected] Quentin Duthie, Royal Forest & Bird Protection Society of NZ, The schedule four debate: valuing, protecting and sus- T: +64 4 463 5307 tainably managing natural resources For more details visit Ken Piddington, Institute of Policy Studies and former www.ips.ac.nz Parliamentary Commissioner for the Environment, There is no cost for Minerals: Assaying the Minefield registration