Archive for the ‘Electoral Law’ category

State funding and electoral finance laws: the solution.

April 12, 2008

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.

State funding

April 11, 2008

One of the big issues of electoral law, which was ignored by the Electoral Finance Act, as Labour had it in the “too hard basket” politically, is the issue of state funding of political parties. One of the realities, is that we have de-facto, if not de-jure state funding of political parties, as shown by taxpayer funding of a NZ First election advertisement recently.

I have posted my thoughts on Electoral Finance laws here, but in that post did not disscuss the issue of state-funding.

Under current law, there are two types of state funding for political parties:

1) The broadcasting allocation. This is money that political parties recieve from the taxpayer, to pay for TV and radio broadcasting promoting their party. The money is allocated by the Electoral Commission. Last elections allocations can be seen here. Parties are not allowed to spend money, other than that allocated on broadcasting. There was considerable controversy (largely overshadowed by the pledge card) when it was discovered after the last election, that National had spent more than it was allocated, as it (claimed to) not realise that the allocation was GST inclusive, and couldn’t pay the GST as it would involve overspending.

2) “Parliamentary communications” which involve telling people to vote for you. This was done illegally by Labour last election (the pledge card being the prime example), and all other parties, except the Progressives to some extent. Now, it is perfectly legal. A little known fact, is that at the same time Labour passed the Electoral Finance Bill, Labour passed another insidious piece of legislation, the Appropriation (Continuation of Interim Meaning of Funding for Parliamentary Purposes) Bill, which legalised the spending of parties (total $14.6 million) parliamentary budget on anything that does not explitly ask people to vote for that party legally, thus legalising the pledge card and NZ First’s recent election advertisement. This, combined with the EFA, is an astonishing gerrymander of our electoral laws, which allows the incumbents (i.e. Labour) to use huge amounts of de-facto state funding to protect themselves, while tight spending limits apply to their opponents. A good example is how under this law, and the Electoral Finance Act, an incumbent MP can use $60 000 of taxpayers money, telling their constituents what a good job they are doing for that electorate (as well as $20 000 of their own money), while his opponent can only spend $20 000. Talk about an unfair election.¬†More information on this legislation can be found here.

For those interested in a basic sumary of this legislation, under the Bill, temporary definitions of what can be spent by parliamentary service (which are anything which does not explicitly solicit votes, ask for money or membership of a party, is legal, so the pledge card, because it did not say “vote Labour” on it, is legal) are extended until June 2009 (after the election), enabling Labour to legally steal $5.4 million of taxpayers money for its 2008 election campaign. You can see here the amounts of money parties can legally steal from the taxpayer for their election campaigns. Although all political parties can legally steal this money, the parties which won the most votes last election get the most free money (which protects the incumbents, and disadvantages those parties not in office). While National gets a slightly bigger parliamentary services budget to steal from than Labour, this is because it has to fund press secretaries e.t.c out of its parliamentary services budget, while Labour cabinet ministers don’t, so Labour probably has more money left over. Further, the legislation helps Labours partisan political advantage more, because it had to pay back (thanks to public pressure) $800 000 it stole previously from the taxpayer for its 2005 election campaign, leaving it short of money and in desperate need of free money to fund its 2008 campaign.

But this is not all. Worse, Labour inserted a clause into the Electoral Finance Act (clause 81(2)(g), saying that election advertising “does not include anything done in relation to a member of Parliament in his or her capacity as a member of Parliament”, which means that anything paid for by Parliamentary service, including advertising like the pledge card, is exempt from the spending cap. So Labour can legally steal $5.4 million of taxpayers money this election, and not have it count as part of their election campaign expenses (and thus be exempt from the spending cap). So Labour can this election, spend $2.4 million of their own money, and another $5.4 million of taxpayers money on their election campiagn, while their opponents (outside Parliament) are only allowed $2.4 million, with not one cent from the taxpayer. Talk about unfair.

It is facts like these that really make me wonder if there is any limit to the corruption in the Labour Party.

3) Sadly, this is not the end of taxpayer funding of the Labour Party election campaigns. There is a third type of state funding: Government advertising. This is mostly innocent things, like anti-drink driving and speeding campaigns, defence force recruitment and so forth, when the Government provides information to its citizens. However, they can be used for partisan political purposes. For instance, last election, large amounts of money was spent to infrom people of working for families (WFF). This policy was closely associated with Labour, which had made extending WFF a key election bribe. Last Australian election, the coalition used millions of taxpayers money to promote Workchoices, and improve its image, no doubt for partisan political purposes. Although the money can not be used for direct political advertising, and thus can’t fund anything like the pledge card, it can still be used for partisan purposes. The intention of Labour to do so was made clear last year, with the sacking of Ms Setchell from the Enviroment Ministry. Watch out for Government advertising on Kiwisaver and carbon neutrality this year.