State funding and electoral finance laws: the solution.

The previous post, outlining the various forms of taxpayer funding for our elections turned out to be a lot longer than expected. It outlined the three forms of taxpayer funding for out political parties:
1) Broadcasting allocation.
2) Rorting the Parliamentary services budget, and spending it in election advertising.
3) Government advertising, when done for partisan purposes.

Previously, I was opposed to all state funding to political parties. This was because Labour was promoting the idea at the time, and I could see through their great scam, in which they justified taxpayer funding of parties on the basis it was needed to compensate for money lost due to people not giving anonymous donations through trusts, when the real reason was Labour needed money, as it had just paid back the $800 000+ it had stolen from the taxpayer in 2005. In the event, Labour droped the idea as it was too hard politically, but implemented an even worse scheme of de-facto state funding, outlined in the post below, where MPs and parties are allowed to spend their Parliamentary budgets, legally (instead of illegally as Labour did with its pledge card in 2005) on election advertising.

Now I am not opposed to state funding. However, it must be implemented in a way that is not done to any parties partisan politcal advantage, like Labours scheme. Any scheme which involves funding parties based on how much votes they had last election, means the incumbents gat the most, and disadvantages any parties which did badly in the previous election, and any new party, no matter how much support it has gets nothing. I also had concerns about it helping Labour and other parties which stole taxpayer money in 2005, as they would be short of money once they paid back their debts to the taxpayer. As the earliest any such scheme can be applied is the 2011 election, 5 years after the pledge card, this issue no longer applies.

So why do we need state funding of political parties:
1) To help ensure fair elections. If a political party does not have wealthy donors, and is short of cash, it may not be able to get its message out to the public, as it does not have the financial ability to do so (election campaigns are very expensive today). The lack of money will disadvantage it, and not give it a fair chance in the election.
2) To provide parties with an alternative source of money to big business, and wealthy donors.
The main objection to state funding is that people have to pay out of their taxes to fund parties they don’t like, but only a small fraction of your tax money will be needed for this purpose.

However, the state funding must be done fairly, not an incumbent protection rort as the current laws is. So how should it be done. There are three general possibilities:
1) Parties get given money based on the number of votes recieved last election. I oppose this method, as the incumbents always get the most, and disadvantages new parties, who get nothing. Alternatively, it can be done based on current polling (which may not be too accurate), whcih avoids these downsides, but the big parties still get the most, and one off poll-increases (like what happened to National after the Orewa speech) can skew the results.
2) Each registered Party gets the same amount (e.g. $100, 000). This has the benefit of allowing all parties to be treated equally, but gives strong incentives for pressure groups to register as political parties, and some parties can cheat the system, by splitting themselves up.
3) An independent body can decide the results, like how the electoral system decides broadcasting allocations. This is better than the above ideas, but if a party has a guarenteed source of income, it will have to worry about pleasing the commission, and not its members and supporters for money (not a good thing), and may still advantage incumbents.
4) My solution. The party gets x dollars (say $10) per registered member. The system is clear, transperant and fair. This way a Party with 500 registered member gets $5 000. It encourages people to join and get involved in a political party, and forces political parties to listen to their members, as if they leave, the money goes down. In order to avoid interest groups registering as political parties, all the money must be spent on direct election advertisements, and no more than x amount on a single issue (this will hurt single issue parties, like the legalise cannibis Party).

With state funding, there will be no need for the broacasting allocation, which can be abolished. I oppose the broadcasting allocation as it stands, because it restrcicts free speech (by limiting the amount of money political parties are allowed to spend). We can also get rid of the laws that allow parliamentary communications to be used for advertising, and place very tight limits on what parliamentary service can approve, and ban any Parliamentary service money being spent after the dissolution of Parliament (there is no need, as legally there are no MPs with parliament dissolved). And we can place tight rules on government commmunications within three months of an election. It will also solve the problem of financially poor parties having their message drowned out by the bigger ones, not by quietining the voices of thefinancially bigger parties, but by giving a louder voice to the financially smaller ones.

Which brings me to the final issue-spending limits. I have always opposed spending limits to third parties, on the basis of free speech, hence my opposition to the Electoral Finance Act, but refrained from opposing spending limits for political parties, as it seemed too radical, and could lead to financially big parties swamping the advertising market, drowning out the voices of the smaller ones. But with state funding, it gives small parties are louder voice, thus harder to drown out.

And there is plenty of evidence that democracy can function very well without spending limits. Supporters of the Electoral Finance Act were good at pointing to the US as an example of democracy without spending limits. Ironically, the Electoral Finance Act moves us closer to the US with electoral finance laws. But there are several very democratic countries without spending limits, showing democracy and free speech can go very well together, namely Australia, Austria, Denmark, Finland, Germany, Netherlands, Norway, Sweden and Switzerland, in addtion to the United States (see Graeme Edgelers comment at 4:31 here). Of course all the money must be transparent, and its sources made public (except for very small donations), with no anonymous donations through secret trusts, or “protected donations” (the Labour Party method of recieving anonymous donations by having them diverted through the Electoral Commission, written into the Electoral Finance Act, thus giving lie to their claims of opposition to secret donations).

The removal of spending limits, protected donations, parliamentary services budget being rorted for electioneering, and introduction of state funding, gives good blance to the issues of transpearancy, free speech and a level playing field in elections.

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