Newly minted Justice Minister Kiritapu Allan believes New Zealanders will have renewed trust and confidence in who is donating money to politicians after a raft of proposed electoral changes were announced on Monday.

Allan says every single angle was looked at when it came to political donations and financial reporting and “New Zealanders should feel quite happy with where these things have landed’’.

Acting Prime Minister Grant Robertson told Newsroom given the time left to make change ahead of next year’s election, the proposals were a “significant improvement’’.

But University of Auckland associate professor of law, Tim Kuhner, said the changes don’t fulfil expectations around transparency and improving voters’ trust and confidence, instead he says they’ve “taken a step in the right direction’’.

“I hope the overall picture isn’t lost in all these small concessions,’’ he said. 

The changes would see the identities of donors having to be disclosed for any party donations over $5000 – currently it’s $15,000.

In addition, parties would have to reveal the number and total value of donations under $1500, which are not made anonymously, and the proportion of in-kind donations would have to be disclosed through annual returns.

The other significant change would see donations that exceed $20,000 from a single donor having to be reported – the current threshold is $30,000 and the donation must be disclosed within 10 working days of receipt.

The change would lower the threshold but the 10-day working requirement would only apply in election year and would move to annual disclosure for the other two years of the political term.

In effect that means large donations to political parties would end up being reported less frequently, but in theory by the end of the political term more money will have been disclosed because of the lower threshold.

“One possibility is that the Government does want to go further but recognises it can’t unless it’s got something to replace it with.”
– Graeme Edgeler, lawyer

Robertson defended the disclosures being stripped back to only annually for two of the three years of the political cycle.

“There was an agreement that we needed the amount to be less, and the most important time period obviously was in and around elections, and the 10-day disclosure period within an election year gives you that,’’ he told Newsroom.

Kuhner says large political donations need to be disclosed regularly because they paint a picture of who is applying “pressures and incentives’’.

The loyalties between parties and donors when it comes to large sums of money shouldn’t be bogged down by paperwork because any non-disclosure is really important, he said.

Wellington lawyer Graeme Edgeler said regular disclosure is crucial to transparency when talking about large sums of money.

“If some industry donates $50,000 after a bill goes through Parliament or select committee, it would be useful to know that within 10 days, not 15 months later,’’ Edgeler told Newsroom.

On the decision to bring the threshold for disclosing donations down to $5000 – rather than $1500 as was proposed in a briefing paper from the Ministry of Justice to then-Minister Kris Faafoi – Robertson applied the weight of “administrative burden’” argument.

Both Robertson and Allan told Newsroom the message they’d received was that the lower the threshold was, the more difficult it became, and where they’ve landed strikes the right balance.

“The further you go down, the administrative cost and burden starts to counterbalance what you’re trying to achieve,’’ Robertson said.

That didn’t wash with Kuhner, who said “the administrative burden argument isn’t very persuasive’’.

He said there are ways of alleviating the burden, including real-time disclosures, and funding the Electoral Commission appropriately to handle much of the workload.

Both Kuhner and Edgeler said the Electoral Amendment Bill due to be released in coming days will provide greater legislative detail on what shape the changes will take.

It will also provide the information the National Party says it needs to make a decision on whether it will support the changes.

“I hope the overall picture isn’t lost in all these small concessions.”
– Assoc Prof Tim Kuhner, University of Auckland

National’s Chris Penk told Newsroom the caucus would discuss the proposed changes when it meets on Tuesday but would need to see the bill to understand the detail of what it all means.

But Penk said the changes needed to be fixing something that was broken, and he wasn’t convinced that was the case with what was being proposed.

A balance would need to be struck between transparency and participation, he said.

While the ministry’s report recommended dropping the disclosure threshold to donations over $1500, Edgeler suspects it’s come up short of that because it would result in fewer people making donations if their identity can’t be kept secret.

“One possibility is that the Government does want to go further but recognises it can’t unless it’s got something to replace it with,” he said.

Edgeler said until a wider discussion has been had around public financing, which is part of a more sweeping review due to be released next year, then parties will be reluctant to risk losing political donations without any sort of funding safety net.

All of these changes come amidst a spate of high-profile donation scandals, with Labour, National and New Zealand First all tied to Serious Fraud prosecutions.

Kuhner said those investigations have pushed many of the donation reporting issues to the surface, but that the changes needed to go much further than that.

“You can’t just look at disclosure, you have to look at lobbying as well. There’s also corporate trusts and conflicts of interest and whether the register of interests is sufficient,’’ he said.

“It’s a huge eco-system of financial influence.’’

Jo Moir is Newsroom's political editor.

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