In her Sunday-Star Times article, Ruth Laugesen correctly labels party finance in NZ as ‘an ailing campaign financing system’. But the big question is how to fix it. While there are many who agree that the current situation is problematic and they admonish Labour and the other parties for their sins, their solutions are actually part of the problem. Sadly, on this issue, the bad solutions normally come from the left of the political system (or at least those who are considered to be the left or liberal sections of NZ society).
For most of the left there are two fixes:
[A] Greater State control of party finance
[B] State Funding
Greater state control normally includes: abolition of anonymous donations and trusts, lower thresholds for declarations, more declarations of income, stronger regulation of interest group spending, tighter limits of how much parties can spend in elections, a new and more powerful Electoral Commission, etc. These types of solutions are being promoted by the Sunday-Star Times and by campaign financing expert Andrew Geddis of Otago University law facility (and editor of Socialist Worker in the 1990s). Almost ignoring the current scandal, Geddis seems preoccupied with mechanisms to control party income from private sources, thereby ensuring that the public knows where their private sources of income come from.
My main objections to state control of party finance are the following: the regulations normally represent an unjustifiable intrusion on the freedom of individuals, groups, political parties and candidates’; there are many reasons to question the fairness of state regulation of parties in general – the rules normally benefit some parties at the expense of others; this type of state intervention often has unintended consequences; the establishment of rules for how parties operate leads to convergence in ways of organising the parties; the interventions of the state into party affairs are prone to failure - this is because it is in the interests of at least some parties to evade the rules, and they inevitably find legal means to do so; because of these inevitable inadequacies – the rules actually act to obscure the public’s understanding of where parties obtain their finances and how they spend them. But I will elaborate on this objections in future postings.
In terms of [B] State Funding, this is being promoted by the Sunday-Star Times,
Geddis, Chris Trotter, and a number of bloggers – see: No Right Turn - Just Left - and
Andrew Geddes promotes state funding because it is a ‘clean source’ of income that the public would rather have to give to avoid the inequalities and murkiness of unbridled private funding. Strangely, the SST, although it doesn’t like the idea of greater state funding, it ‘the country might have to hold its nose and opt for public funding or party spending’ – after complaining about exactly that. Chris Trotter similarly asks: ‘So, you don't like the idea of state-funded political parties? Well neither do I. But what is the alternative?’.
My problems with state funding of political parties are that it produces a relationship between the state and political parties that is not conducive to a healthy and dynamic party system. First, state funding has a significant influence on internal party configurations. It normally increases the power of the parliamentary leaders, and decreases party membership numbers. It certainly distances politicians from their rank and file members. Second, it has a negative effect on the linkages of parties to civil society - it reduces parties’ organic attachment to society, divorcing them from their constituencies. Related to this, the funding has a strong tendency to moderate the politics of parties, lessening the polarisation between parties. Third, parties become more like state-funded and ideology-free bureaucracies. It fosters a ‘political class’ with independent interests, who are partly co-opted into the state – the leaders are less interested in advancing political objectives than simply managing the state. It increases the professionalisation of the parties. Fourth, state funding has an important effect on political competition, especially in consolidating the existing party system and artificially inhibiting change. Fifth, under state funding regimes a cartel-like arrangement is created in Parliament whereby parties become addicted to subsidies and constantly attempt to increase them. Related to this, wherever state funding system has been implemented it has done nothing to solve political corruption but only added to them.