Financing Political Party Broadcasting Stephanie Corban* Joint Winner Of

Financing Political Party Broadcasting Stephanie Corban* Joint Winner of the Law Review Prizefor 1997 I: INTRODUCTION Overseas jurisprudence reveals that the regulation of political campaign finance involves balancing the competing interests of liberty (freedom of speech) and political equality. While the concept of freedom of speech is widely understood, what political equality means is less clear. In the context of this article, a workable definition is that the principle of political equality seeks to ensure that political parties (and candidates) contest elections on equal terms, and to eliminate, as far as possible, the disproportionate influence that those with financial resources might have on those who exercise political power. The purpose of this article is to analyse the relevant New Zealand legislation from the point of view of this tension between freedom of speech and political equality, and to ascertain whether our current restrictions on political broadcasting can be justified from either perspective. In order to do this, I briefly set out the regimes and key concerns of four overseas jurisdictions. This provides a foundation on which to examine Part VI of the Broadcasting Act 1989 ("the Act") and its application at the 1990, 1993, and 1996 New Zealand general elections. Following this, there is a discussion of the extent to which restrictions are permissible from the freedom of speech perspective. This section illustrates how legal principles can provide a framework which clearly sets out the issues that need * BA / LLB (Hons); nee Macfarlane. Auckland University Law Review to be resolved and the choices that need to be made. The tests thus identified are then applied to the New Zealand legislation. Finally, a possible regime for New Zealand is advanced which purports to achieve an appropriate balance between freedom of speech and political equality in the current New Zealand context. In New Zealand, election broadcasting by political parties is governed by a statutory regime. Under this regime, money and free air time are allocated to political parties. The allocation process is hotly contested, because the funds that each party receives in the state carve-up is all they are permitted to spend to buy air time. The people responsible for allocating the funds have found their task difficult and complex and have felt constrained by inadequate legislation. Both the public and political parties have criticised the allocations which have been made. The current regime, supposedly necessitated by the increasing number of political parties contesting general elections, was put in place for the 1990 general election. It replaced the "informal" party structure that the National and Labour parties had operated under to allocate time and funds to themselves and the odd minor party. With an independent body consequently being required to make the allocations, the task fell first to the Broadcasting Standards Authority ("the Authority"). The Authority was thus entrusted with the responsibility of deciding which political parties were eligible for taxpayer-funded political advertising and accordingly allocating the funds appropriated by Parliament. The Authority quickly found, however, that the legislation did not adequately provide for the realities which arose. The apparent gaps in the statutory framework, the Authority's long and continued opposition to its task, and the likely increased complexity of the allocation process under a Mixed Member Proportional ("MMP") system, as more parties jostle for a share of the funding pie, prompted a review of the legislation which began in late 1995. This review, completed in mid-1996, led to the enactment of the Broadcasting Amendment Bill with the Electoral Commission assuming responsibility for allocating the funds. The Electoral Commission though, in its decision on the funding allocations for the 1996 election, "attacked the funding criteria as deficient and urged a rewrite of the law".' When the legislation was first introduced in 1989, it was alleged that the Labour Government originally had wanted to introduce public funding of political parties, but discarded the idea because the public would not have accepted it. Instead, it elected to have a system of free political broadcasting. This led to the charge that the Labour Party had no funds and was desperate to sell itself and that the legislation was a back door way for the Government to fund its television and radio election advertising.2 I The New Zealand Herald, 21 August 1996, section 1, 5. See also the report of the Electoral Commission, "1996 General Election: Provisional Decisions of the Electoral Commission on Allocations of Time and Money to Political Parties for Broadcasting of Election Programmes" (August 1996) 1. 2 505 NZPD 453 (7 March 1990). PoliticalBroadcasting The essence of the current New Zealand regime is that if a party does not receive an allocation of time and money from the state, the law prohibits that party from advertising on television and radio. Further, parties which receive an allocation cannot buy more time with their own money. Therefore, our present regime raises not only issues of political equality, but also important questions about freedom of speech. It is of concern that in New Zealand we have so easily overlooked questioning the legitimacy of our system from such a fundamental viewpoint as the basic liberty of freedom of speech. The fact that we have allowed such a restrictive regime to operate in this country without addressing these issues illustrates how easily New Zealanders have accepted limitations on freedom of speech. II: CAMPAIGN FINANCE LAWS The New Zealand legislation dealing with political party broadcasting is one aspect of what are more broadly known as campaign finance laws. The campaign finance laws of the United States and Canada are much more comprehensive regimes than that of New Zealand. The New Zealand legislation has been said to have been "guided in part by the Canadian experience".' However, the relevant Canadian legislation and subsequent case law have been heavily influenced by American scandal, legislation, and jurisprudence. In the United States, Watergate raised public awareness of the dangers of campaign funding from private donors and motivated reform. While Watergate had nothing to do with Canada, "it did not leave Ottawa untouched and appeared to contribute markedly to the alleged public demands for legislation in Canada."4 New Zealand, Britain, Canada, Australia, and the United States all have different systems of campaign finance. Given the aim of this paper, a point of great interest is that the United States, Canada, and Australia have all found their written constitutional documents to be one of the biggest obstacles to campaign finance reforms. "This is because there is a potentially irreconcilable conflict between the goal of equality pursued by election expenditure controls and the protection of liberty expressed in constitutional documents."5 When the New Zealand system is compared with that of the United States, Australia, the United Kingdom, and Canada, it quickly becomes apparent that in terms of political broadcasting, only the British and Canadian systems are comparable. Therefore, I will begin with an outline of these two regimes. I will then briefly explain the United States' system of campaign finance and finally, I 3 Ewing, Money, Politicsand Law (1992) 230. 4 Ibid, 60. 5 Ibid, viii. Auckland University Law Review will look at the Australian system. The United States Supreme Court decision in Buckley v'Valeo6 has had a major impact on campaign finance reforms in both the United States and Canada. It is touched on here, but a more substantial discussion occurs below.7 1. The United Kingdom In Britain, parties do not receive state funding, but are subsidised at elections by receiving (inter alia) free broadcasting time. Like New Zealand, paid political broadcasting at elections is prohibited.8 Once the broadcasting authorities have announced the amount of time that is available, the parties have to agree on how to allocate the time amongst themselves. The allocations are based on party strength at the time that the election is announced. 9 Past elections have shown that without the subsidies, the Conservative Party has a significant financial advantage over its political opponents. Minor parties with not less than fifty candidates are entitled to additional time, less than the amount allocated to the main parties. 0 In Britain the issue of free political broadcasting time is discussed in the wider context of state funding for political parties. The view that parties must support themselves has been declared "redundant" by one writer since "it is clear that Britons ... do not favour joining political parties"." Fisher contends that despite the dilemma of whether the state should support voluntary organisations with public funds, there must be sufficient financial support for political parties because of the essential role they play in modern politics. However, he notes that sensible debate on the issue could only exist against a backdrop of increased public funds. 2 2. Canada Canada partially reimburses the election expenses of political parties. 3 In addition, political broadcasting is regulated by the Election Expenses Act CS 1973-1974 and the Canada Elections Act RS 1985. Broadcasting authorities must 6 424 US 1 (1976). 7 See text, infra at Part IV. 8 In Britain, party political broadcasts are not regulated by statute, but rather by the Report of the Committee on Broadcasting 1960 (Cmnd. 1753) and the Aide-Memoire of 1947. See 45 Halsbury'sLaws of England (4th ed) paras 575-576. 9 Halsbury's Laws of England, ibid, para 576, n 15. 10 Ibid, para 576. 11 Fisher, "The Institutional Funding of British Political Parties" in Broughton, Farrell, Denver, and Railings (eds), British Elections and Parties Yearbook 1994 (1995) 194. 12 Ibid, 195. 13 Political parties that spend more than ten percent of their election expenses limit are reimbursed nearly twenty-three percent of those expenses.

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