The Auditor-General's uncovering of the Labour Party's unlawful pledge-card election spending last year was merely the tip of the iceberg. Unfortunately this scandal created the idea that this rort was a one-off or maybe just something that occurs at elections. In fact the illegal use of taxpayer funds is a routine matter within Parliament. The parliamentary parties receive resources and services of more than $40 million a year. These are intended to permit them to carry out their legislative duties and serve their constituents, yet much of this is used for partisan political purposes, electioneering and organising their parties. Leading on from the last posting on Myth 10: NZ parties are not state funded this blog posting illustrates that the vast resources in parliament are used to conduct activities that are to all intents and purposes party-political tasks, including basic electioneering. This very long blog posting therefore proves that New Zealand already has an incredibly generous form of 'backdoor' state funding of parties. [Read much more below]
Most of the resources conferred by the state to political parties are not actually provided to political parties per se, but either to individual MPs or party leaders. These resources are officially intended for the non-party purpose of carrying out the official functions of an MP. Yet, as this blog post shows, they are used to conduct activities that are to all intents and purposes party-political tasks, including basic electioneering. After all, with opinion poll results frequently in the media, election work now tends to be undertaken throughout the whole parliamentary term. Hence, while election-related work has historically been considered and classified as an extra-parliamentary function, it is now the main activity that occurs within Parliament. Even the Royal Commission on the Electoral System recognised that the resources of an MP are ultimately used by their parties:
While these entitlements are provided to the MPs themselves as aids to the fulfilment of their parliamentary functions, they are available throughout the year and are of considerable value to the political parties for campaigning and other purposes (RCES, 1986: p.210).
This section looks at each category of parliamentary funding outlined in the previous post on Myth 10, examining how it is used and converted into party political resources. It is important to realise that these categories are somewhat artificial in that they are based on official funding streams, whereas the parties often combine them for various purchases. This means the funding is not entirely used in the way that this categorisation might suggest.
(1) Party and Member Support
Elected parties have parliamentary and electorate offices that are well-funded by the budget of ‘Party and Member Support’. Below is an explanation of how the component resources are used for political purposes.
(1a) Leaders’ Funding:
The $5.4 million paid annually to the parties to run their leaders’ offices is a resource that can be used very flexibly for all sorts of political projects. As an example, party websites are built and maintained from within Parliament. Mark Stonyer of Peter Dunne’s United New Zealand parliamentary office has explained how his office was able to use Leaders’ Funding to set up the party’s website, which has been an important part of United’s membership recruitment:
Probably most new members have come via the internet. We have an internet page for United that has an enquiries page on it. Because it is funded through our public allowance – from our Leaders fund – this pays for our internet site maintenance. So you can’t mention membership or donations. So it just says ‘Enquiries’ and if you want to know more you just fill out this, and it comes to here basically. And from there they get the ‘Positions’ statement…. From there that is where the membership comes in from. And people will ring, contact us, and write. And they just flow in that way. We don’t actually have a huge organisation out there gathering in membership (Stonyer, 1999).
A number of other political party and MP websites have also been created and maintained with the aid of Parliamentary Service funding (New Zealand Infotech Weekly, 2001). Act freely admit to developing their party website with parliamentary resources and employing an electorate agent to spend 16 hours a week maintaining the site (Prebble, 2003). The Leaders’ Funding can be used for purchasing other political technology. For instance in 1993 Mike Moore used his Leaders’ Funding to install a broadcast studio in his Christchurch home so he could better participate in talkback radio (McGregor, 1996c: p.82).
The Leaders’ Funding appears to be used mainly to employ staff. The staff resources of the opposition parties have increased dramatically in recent decades. In contrast with the modern opposition offices, in the late 1960s ‘Labour’s leader Norman Kirk relied upon the support of a messenger, typist and personal private secretary’ and it was not until 1974 that an opposition leader was able to employ a press secretary (Klinkum, 1998a: p.407). However, by the early 1980s, the Leader of the Opposition had six support staff, and by 1990, there were nine, with a budget of over $700,000. How these resources are used for political purposes, can be seen from the way in which Ruth Richardson, as opposition finance spokesperson, was given ‘improved resources, including secondment of a Treasury official to her office’ which she used to ‘set about constructing an alternative economic vision which would surpass [Roger] Douglas’s for ideological purity’ (Kelsey, 1995: p.40).
Opposition resources then multiplied over the next two decades, particularly following the publication of the Parliamentary Service-commissioned ‘Hunn-Lang Report’ in 1990. This review of the requirements of the opposition parties found that although the prime minister’s office employed a number of specialists there was no equivalent for the Leader of the Opposition to use for policy formation. The Hunn-Lang Report identified this as an area of support necessary for the formulation and dissemination of policies by the opposition (O’Sullivan, 1999). The report recommended the appointment of six additional media positions as well as ‘a sum of NZ$100,000 per annum to buy in computerised information services and to commission work from the private sector’ (Klinkum, 1998a: p.408).
Generally, the leaders’ staff are engaged in marketing their political parties, and although this activity is normally done surreptitiously, there was one example in 2000 where the Act party advertised to employ someone at Parliament specifically to ‘market Act’s policies’. Commenting on this advertisement, the General Manager of the Parliamentary Service, John O’Sullivan, suggested that all parties already hired staff to carry out similar functions, with the difference being that ‘other parties use such titles as "communications coordinator" for similar positions’ (McLoughlin, 2000b: p.3). Yet it is obvious that a person occupying an ‘advertising/marketing’ position for a party in Parliament is carrying out party-political work. Much of the resources provided to parties are given on the basis that they are for developing party policies, yet it is clearly spent on selling their policies. Grant Klinkum has pointed out how prior to the 1990 election Jim Bolger blatantly used his Opposition Office budget for selling rather than developing policies (Klinkum, 1998a: p.409). This shift towards political-oriented staff has been recognised by Claire Guyan, particularly in terms of press secretaries:
The role of the parliamentary press secretary has changed dramatically over the years. Until 1984 they were strictly public servants drawn from the Tourism and Publicity Department. That system changed under the fourth Labour Government which in 1984 began hand-picking press secretaries and employing them under contract. The role became more political as ministers looked for sympathetic press secretaries to manage their media profile. It was the birth of the ‘spin doctor’ (Guyan, 1997: p.11).
(1b) Party Group Funding:
One of the most useful resources available to the political parties is the parliamentary research units, which altogether employ about 30 staff in Parliament and are paid for by Party Group Funding. The units were set up in 1970 in line with the recommendation of the Royal Commission on Salaries and Allowances. Crucially the units were established ‘under the direct control of their respective parliamentary leaderships’ which makes them answerable to no-one outside the party and thus likely to tend towards involvement in party-political work (Klinkum, 1998b: p.420). Originally, each of Labour and National’s units had a director, two researchers, and two support staff, but within three years the units had expanded to employ ten full-time staff each, and in 1978 Social Credit was also granted a researcher (Klinkum, 1998a: p.108, 109; 1998b: 421). In 1993, and then again in 1994, both the National and Labour units were given an additional staff member – taking them to 12 staffers per unit (Klinkum, 1998b: p.421). After 1996, New Zealand First had three full-time researchers and a director, the Alliance three full-time researchers, Act one full-time and one part-time researcher and the United Party one full-time researcher (Klinkum, 1998b: p.421).
The research units were originally established for supporting MPs with their parliamentary work, but their prime role appears not to be research, but the marketing of their political parties. Essentially they are state-funded party propaganda units. In his study of the units, Klinkum found that ‘There are a range of overtly political functions in which research units engage’, and ‘the work is mainly of a blatantly political nature’ (Klinkum, 1998a: pp.230, 215). The research units have performed valuable functions for their MPs, but often focus more on putting out information to the public than simply researching information for their MPs. For example, Klinkum found that ‘Generic material specifically produced for newsletters was heavily political and often worked up to a point where the Member needed only to put their name over it’ (ibid: p.185). Hine (1995) also found that during the 1980s the National and Labour research units had been diverting their resources into party organisational work, and in particular into the publication of political broadsheets – National’s research unit put out Notes from the Hill, and Labour’s published The Month That Was (NZPA, 1989b). Since the 1990s, many other partisan publications have been produced from Parliament. For example, the official email newsletter of the Young Nationals, The New Write, is produced from National’s research unit. Likewise, during the time the party was in Parliament, the Alliance offices produced the Alliance Activist which was compiled and printed using parliamentary resources, but posted to party members using party money (O’Sullivan, 2001: pp.4-5). Similarly, the Act party parliamentary office produces Richard Prebble’s Letter from Wellington, which is emailed out to 30,000 voters, and reads like a party political broadcast. The Greens’ parliamentary office also publishes email newsletters – such as Justpeace, which is put together by both party activists and parliamentary staff.
Part of the research work of the units sometimes even includes writing or researching books for MPs. For example, ‘It is believed that Karin Beatson in the National Research Unit helped Muldoon to write a book on the New Zealand economy. Mike Moore would request everything the Labour unit had on a subject such as value added exports and produce a book based on that material’ (Klinkum, 1998a: p.132). When he was a Labour MP, Richard Prebble, ‘arranged for the Labour unit to ask questions in the House which elicited material which Roger Douglas then used in his book "Unfinished Business"‘ (ibid: p.166). Research unit staff have even been known to intervene directly in the political arena as part of their job, such as impersonating the public on talkback radio: ‘A fairly unusual type of assistance provided to Members involved a Labour researcher ringing talkback shows with "patsy" questions while the Member was being interviewed’ (Klinkum, 1998a: p.132).
Staff in the research units also undertake many organisational tasks that would, in most countries, be performed by the extra-parliamentary head office:
Another example of assistance to the party is at candidates’ conferences prior to elections. There is also evidence of direct support of party electorate committees obtaining occasional support from research units. There has been a steady stream of material from the research unit to National Party headquarters and to the divisions over the years. While employed by the research unit Simon Walker helped organise the Labour Party annual conference (Klinkum, 1998a: p.146).
According to Nick Venter, ‘Over the past three decades, election-related support has included using research unit staff to train volunteers in electorates for party polling work, coordinating some national-level polling work, and providing a range of advisory and information support services to candidates who are not sitting members’ (Venter, 1999b: p.2).
The units also carry out opinion polling. Because the Labour Party’s extra-parliamentary organisation has generally lacked the funds to undertake such work, the task has nearly always fallen on the research unit, which pioneered polling work in 1977. According to Klinkum, ‘Considerable time was spent by the Labour Research Unit from 1977 on polling work. Leaving aside 1987 when the Labour Party was awash with corporate contributions, the party has typically had very little funding for polling’ (Klinkum, 1998a: p.195). Klinkum has outlined how ‘The national polling which occurred in 1984 was coordinated by the research unit and carried out by volunteers using telephones in Members’ offices’ (ibid: p.196). The polling work of the research units has been well-utilised in making political decisions: ‘One example of overtly political polling was polling undertaken to help [the Fourth Labour Government] cabinet determine whether Koro Wetere as Minister of Maori Affairs should resign over the Maori Loans Affair…. Another example involved a director of the Labour unit going to Christchurch to coordinate a random sample telephone poll to determine whether sitting Avon Member, Mary Batchelor was popular in the context of a challenge being mounted by a trade unionist on the candidacy for the seat. The parliamentary party leadership approved the trip and results of the polling were taken to caucus and used to make a particular argument’ (ibid: p.197).
By 1999, the Labour Party’s polling was still carried out from within Parliament (Allen, 1999). Likewise, most other parties carry out opinion polling from within Parliament. For example, Mark Stonyer has outlined the United New Zealand’s occasional use of polling: ‘We have done a bit of polling nationally for our own sake from the parliamentary unit here. We polled a thousand people over the whole country with a health survey’ (Stonyer, 18 May 1999).
Since the late 1980s the research units have become more involved in election work. Not surprisingly, the parties have always sought to conceal their inappropriate use of the units, and Klinkum found that researchers ‘would generally seek to link activities such as travel and any type of project which might arouse suspicion, to an MP to give the activity legitimacy’ (Klinkum, 1998a: p.218). Control of the units has often suggested a strong extra-parliamentary influence. Certainly in the past, National’s research unit has been controlled by the party whips together with the party organisation’s General Director who ‘considered the director of the National Research Unit to be an employee and as such would meet with [him] on virtually a daily basis, and would expect the director to do party work where necessary’ (ibid: pp.144-145). According to Klinkum, in no sense did the General Director ‘view the unit as being independent of the party, financially, philosophically or administratively’ (ibid: p.145). It is also apparent that the research units do not generally carry out the ordinary servicing of MPs. Klinkum found ‘there is little evidence that the backbench Member has ever really been the main recipient of research unit support in New Zealand’ (Klinkum, 1998a: p.128). As an example of this, a 1992 memorandum from the National Research Unit decreed that individual Members warranted sixth and last attention of the unit, well behind that of the party organisation (ibid: p.129). This level of service to backbenchers is reflected in the dissatisfaction of MPs with the research units: ‘According to one National Member there is "simply no way" that a backbencher receives the $20,000 of research support which is nominally tagged to each Member but is paid to the research unit’ (ibid: p.222). A Parliamentary Service survey of all MPs in 1995-96 also found that ‘only 54% of Members felt that they received adequate service in respect of quantity from their research units’ (ibid: p.224).
Many of those who have worked in the units agree that the nature of the work is better described as propaganda rather than research:
The director of the National unit in 1996 said that unit work is not about research at all, although the term research is a handy label, but rather about telling the public what the government has achieved. This emphasis is reflected in the structure of the staffing within that unit: of eleven staff, only six are researchers while five are in secretarial and publications work. There is full-time work for at least one desk top publisher. All this underlines the point that the propaganda rather than in-depth research on policy issues is at the heart of research unit work (ibid: p.208).
Klinkum has also questioned the appropriateness of allowing the units to carry out electoral tasks: ‘is it appropriate that research unit staff have undertaken polling work in electorates, travelled to electorates for marginal seat support work, assisted in drawing up party platforms, serviced joint parliamentary party/extra-parliamentary party campaign committees and supported candidates who are not sitting members? (Klinkum, 1998b: p.427).
(1c) Members’ Support Funding:
Members’ Support Funding (otherwise known as ‘out-of-Parliament funding’) was introduced in 1984 to provide resources for MPs to operate their electorate offices (Henderson and Bellamy, 2002: p.106). As part of this role, MPs could use the funds to advertise their services to constituents. The Parliamentary Service lists acceptable promotional purchases as: ‘Advertising in newspapers or other publications; Fliers and newsletters; Signage; Entries in public telephone directories; Material intended for public distribution (without charge) such as business cards, fridge magnets, pens etc; Radio and T.V. advertising; Websites’ (Parliamentary Service, 31 Oct 2001: p.8). Therefore all the parties frequently use parliamentary budgets for printing and distributing leaflets. A recent example involved Labour distributing tens of thousands of free postcards promoting the party’s new youth website (Taylor, 2003d). In 2003 the National Party also used $7000 of its parliamentary budget to print 205,000 leaflets to distribute to Labour-held and marginal National seats around the country asking the public for feedback on policy issues (Taylor, 2003b). Such leaflets used a ‘push-polling’ technique, whereby questions are asked of voters, but the questions are in themselves the messages designed to devalue political opponents.
Traditionally these budgets have also been used by MPs to fund ‘small advertisements in local newspapers to promote their constituency services’ (McLoughlin, 2003c). More recently the boundaries of permitted advertising use have been stretched. For example in 2003, United Future bought about $80,000 worth of full-page colour advertisements in daily newspapers ‘to report on how it says it has made MMP work since the last election’ (McLoughlin, ibid). The permitted use of parliamentary budgets was also stretched in 2003 by National and New Zealand First when they purchased about 50 high-visibility outdoor advertising billboards. The billboards featured pictures of their respective leaders, Bill English and Winston Peters, with campaigning slogans, and were estimated to cost about $180,000 (Milne, 2003b). Similarly, the Green Party used parliamentary funding to manufacture hundreds of ‘No War, Just Peace’ placards during protests against the war in Iraq (NZPA, 2003o).
The Green Party has also made effective use of its out-of-Parliament staffing allocations, rejecting standard constituency work in favour of organising Green Party political campaigns. For instance, in 2002 the party employed a ‘cannabis law reform co-ordinator’ from its out-of-Parliament budget. A Green spokesperson described the job as ‘promoting or co-ordinating and researching work’ on drug law reform (quoted in NZPA, 31 Oct 2002). The party said it was also looking to employ ‘up to six other policy co-ordinators including in the areas of safe food, ground-based pest control, sustainable agriculture, and social and economic justice’ (NZPA, 2002j). Despite such work centring on policy and research instead of constituents, the Parliamentary Service said that the position was ‘a sensible use of the money because the party was an issues-based party of list MPs rather than constituency MPs’ (ibid).
It seems that today, more than ever before, the role played by all MPs in the community is party-political, and all the taxpayer-funded resources associated with their role are being directed to such ends. Therefore, regional party organisers (previously paid for by the party organisation) have been replaced by Electorate Agents (paid for by the Parliamentary Service), and the electorate offices are now de facto regional party headquarters. According to Vowles, ‘Funding for offices outside of Parliament is given on the basis of service to constituents, but obviously provides organisational infrastructure that will inevitably be used for party political purposes’ (2002b: p.424).
This was an issue noted by National Party stalwart John Jensen in a 1999 newspaper article:
Have you recently visited your local Alliance office? The Green Party headquarters? How about the Act office in your electorate? Or a meeting place for New Zealand First? How many New Zealand First party activists do you know in your suburb? The contact for Act in the Hamilton phone book is the electorate office maintained by the taxpayers for list MP Ken Shirley in Tauranga. And so it goes on. The minor parties run on a shoestring, with much – if not most – of their activity operated out of the offices of their MPs (Jensen, 21 Jan 1999).
It is an open secret in Parliament that these taxpayer-funded electorate offices operate as party offices geared to organising the party locally, and working for either the re-election of their MP or an increase in the local party vote. At the most obvious level this can be seen in the offices being painted and branded as party offices, complete with party colours and logos. An extension of this is the ‘mobile electorate-office’ – which has become popular in recent years. Richard Prebble, in Wellington Central, embraced this thoroughly with the use of a number of vehicles including the purchase from Japan of a custom-made electoral truck, which could be used as an electoral office for appointments in residential areas or as a platform for public speeches and general campaigning.
(2) Services to MPs
(2a) Secretarial Support:
Of the approximately 1200 staff who work in Parliament and electorate offices, about 307 fulltime equivalents provide secretarial support for MPs (although there are even more staff in ministerial offices). This substantial staffing resource is a recent phenomenon. Amongst the reforms of the Fourth Labour Government, Geoffrey Palmer increased the staffing entitlements of MPs. Whereas once there was one secretary to two MPs, this was increased in the 1980s to one each. Out in the electorate, MPs had no budget to hire electorate secretaries and therefore ‘the spouses of MPs were often forced to become unpaid electorate secretaries who had to sort out the day-to-day problems of constituents’ (McLoughlin 1992a: p.138).
Even MPs’ parliamentary executive secretaries are often involved in highly political work. According to one former director of the National Party’s research unit, ‘one third of the executive assistants are involved in writing speeches and preparing press statements’ (Klinkum, 1998a: p.343). However, it is the electorate staff who are often more heavily politicised.
The Act party, in particular, has made good use of out-of-Parliament staff for organising and marketing itself. A minor scandal in 2003 over Act’s electorate office funding revealed that its parliamentary researchers and press secretaries often work on split contracts, being paid to do most of their work as out-of-Parliament support staff. For example, under this arrangement, Act’s head of research, ex-Cabinet Minister Peter McCardle, was supposed to be an electorate agent for 32 hours a week – ostensibly working out of Richard Prebble’s Pipitea St house in Wellington – and also a researcher working in Parliament for only eight hours a week. Act’s out-of-Parliament funding of about $400,000 per annum was supposed to be used by its MPs to service the electorate, yet media reports suggested this money was really paying for political research and marketing. Outside Parliament, the MPs’ offices and their electorate agents are supposed to work not as party members, but to help constituents with whatever local problems or issues they have – much like a high-powered Citizens’ Advice Bureau. This arrangement is good for the public but, as Act figured out, it is not an effective vote-winning use of state funding, and the party was better off using that money for more political tasks, as it does in Parliament.
The problem for all the parties is that these budgets are officially ring-fenced for helping constituents. However, as Act Chief of staff Christopher Milne admitted, ‘We looked at the strait-jacket and said, “Right, how can we use it to our best advantage?”‘ (quoted in Young, 6 Mar 2003). Their answer appeared to have been to set up sham offices in both Wellington and Auckland and have Act’s ‘electorate agents’ actually based in Parliament in Wellington or on the same premises as the Act head office in Auckland. There they work as researchers, marketers and party organisers. The electorate agent scheme is thus a substantial state subsidy for the party organisation. Act effectively turned its various state funding entitlements into one large fund from which the party could spend as it liked. This ‘bulk funding by stealth’ essentially removes the previous restrictions that were intended to stop the money being spent on blatantly party-political activity.
Previously, Act had been quick to highlight the misuse of resources by other politicians as a way of pushing its perk-busting image. Prebble even criticised the Alliance in 2001 for manipulating its parliamentary resources, saying, ‘It’s part of Alliance philosophy – they have great difficulty distinguishing between public money and their own’ (quoted in Milne, 2001c). However, it now seems that Act has a similar difficulty. This episode showed that Act, too, valued the lucrative state funding to subsidise its campaigning.
(2b) Members’ Communication
Communication technology is especially useful for MPs and parliamentary staff to promote and organise their parties. For example, when in Parliament, Alliance staff used Parliament’s teleconferencing facilities for party purposes without even involving any MPs (O’Sullivan, 2001: pp.5-6). The party was also caught out in 1998 for supplying parliamentary phone cards to party activists (NZPA, 21 Nov 1998). Other parties also use the resources for such purposes.
Postal privileges are commonly used for political purposes, and there are plenty of cases of parties using the parliamentary frank to send out party material. One example was Act leader Richard Prebble’s use of parliamentary letterhead and free postage to write to booksellers asking them to help promote his book, I’ve Been Writing. According to a newspaper report, the General Manager of the Parliamentary Service, John O’Sullivan, said ‘in general MPs were permitted to use the service to inform the public on policy issues of the day’ (Colin Espiner, 1999: p.9). Another example concerns a mail out from Helen Clark’s office in 1994, encouraging the public to attend a Labour Party conference (Rapson, 1994). This use of parliamentary postage epitomises how such resources potentially replace party activist labour. The decline in party membership and activism has obviously impacted severely on the ability of parties to deliver their propaganda. According to ex-Cabinet Minister Simon Upton in the 1980s the parties in Parliament began to rely heavily on Parliamentary Services funded delivery of propaganda – with MPs bombarding ‘constituents with "personalised" communications, offering assistance and proffering carefully sanitised party-political information – all at taxpayers’ expense’ (Upton, 1987: p.110).
(3) MP Salaries and Allowances
Although, strictly speaking, the remuneration of MPs is for personal purposes, parts of these resources are undoubtedly redirected into party-political use. MPs are often expected to pay a substantial proportion of their parliamentary salary into party coffers. For example, Alliance, Green and New Zealand First MPs are expected to pay a portion from their salary to the extra-parliamentary party organisation. As will be explained in a future blog post, parties like the Greens (and formerly the Alliance) expect MPs to contribute about nine percent of their salary, and New Zealand First levies its MPs at the lower rate of five percent. This money helps operate the extra-parliamentary party and fund general election campaigns. Parliamentary allowances also involve significant amounts of money – for example, the commercial accommodation night allowance pays up to $160 per night for accommodation when the MP is away from home ($180 per night in Auckland).
These resources are widely used in elections and by-elections. For instance, in the Taranaki-King Country by-election of 1998, Brent Edwards reported that parties were ‘spending thousands of dollars of taxpayer money to run their by-election campaigns’ mainly by sending their MPs to the electorate to campaign. These MPs’ travel, accommodation, expenses and salary were paid for by the state (Edwards, 1998a). Because such costs are not included in the $40,000 limit on expenditure, Edwards noted that ‘In effect, it allows parliamentary parties to spend thousands of dollars more on campaigning than those parties not represented in Parliament’ (ibid). Chief Electoral Officer Phil Whelan said that ‘Spending taxpayer money on flying MPs in and out of the electorate was a "grey area" and could be challenged if anyone made a formal complaint about the issue’ (ibid). Christian Heritage Party leader Graham Capill complained that these resources meant the parliamentary parties had ‘every advantage that a minor party like ours does not’ (quoted in Edwards, ibid).
Very seldom is the use of these resources reported in the media or taken up by the funding bodies that provide them. However, the issue of unlawful use of parliamentary resources for electoral purposes arose during a Serious Fraud Office investigation of list MP Donna Awatere Huata in 2001. She spent 35 days during the 1999 election campaign in the Auckland Central electorate, for which she was the Act candidate, and claimed the parliamentary away-from-parliament allowance. She denied that she was in the electorate on party business (despite it occurring during the election campaign), and the Serious Fraud Office decided not to prosecute (Young, 2001b).
(4) Resourcing of the Governing Parties
(4a) Staffing and offices
A number of the staff that work for ministers are not public service employees but, according to Richard Shaw, political appointees who are engaged in partisan activity on behalf of their minister:
ministers employ private staff who provide an alternative source of advice, and whose particular task it is to offer explicitly political, or partisan, advice. (Contract staff are also likely to be responsible for what is sometimes referred to as ‘political risk management’ (or ‘spinning’), something that is certainly not a core public service function (Shaw, 2001: p.153).
The provision for this type of resourcing increased under Muldoon, when he set up both his own Prime Minister’s Department and, more importantly, a small advisory group (of ten to twelve members) of experts seconded for approximately two-year terms from both the private and public sectors (Henderson, 2001: p.111). The private office of the prime minister then went from having ten staff when David Lange became prime minister, to about 20, and then to 27 under Geoffrey Palmer. Staff numbers continued to increase, and according to Sarah Catherall, when Jenny Shipley was prime minister she ‘set a record for having the biggest crew of communication staff and media advisers yet hired by a prime minister’ (Catherall, 1 Nov 1998: p.A7). In her media team alone, Shipley had eight staff, compared to her predecessor’s communications team of three. At the same time, Shipley also had about 15 policy advisers (Henderson, 2001: p.112).
The number of (non-seconded) staff in ministerial offices has also increased dramatically. Between 1989 and 1997, their number rose from 45 to 145. According to Shaw, the cost of employing these private staff had nearly tripled, reaching $7.4 million, or $57,000 per employee (Shaw, 2001: p.153). After the election of the Labour-Alliance Government, ministerial staff numbers again increased further – from 198 to 220 (Peters, 12 Jul 2000: p.2). In 2002, there were 224 staff, made up of 47 Alliance ministerial staff and 177 Labour ministerial staff. After the 2002 general election, the staff numbers rose to 232, and the government was also accused of trying to hide the true cost of staff working in ministerial offices by using more staff on secondment from departments. Since Labour came to office in 1999, secondments have gone up by 60 percent, with the salaries being paid for by government departments (TV One News, 2002b).
At the most obvious end of the spectrum, the staff in ministers’ offices are used for ongoing party campaigning rather than simply for the minsterial functions that they are supposedly employed and paid for by the state to undertake. Yet the use of ministerial staff in campaigning has only a recent history. This is in contrast to the observations of David S North who, writing in 1954, noted the limited use of civil servants by government ministers in the general election of that year:
Contrary to the American practice, the National Party had to rely completely on its volunteer and paid workers in the campaign; they could not expect any assistance from the patronage employees who are such an important asset in America to the party in power. However, Ministers do have private secretaries, and the campaigns of Cabinet members must have been aided by their government staffs. The very slight incidence of civil servants working on the campaign on government time can be shown by a story in Standard of October 27, 1954. The Labour organ was furious because two members of the Prime Minister’s department were travelling with him on the campaign tour, and one of them hand-delivered a news release to one of the Christchurch newspapers, surely a rather minor offence. A little later in the campaign Standard charged that members of the Government Publicity Department were writing political news releases, a statement that was vigorously denied (North, 1954: pp.51-52).
While this was noteworthy in the 1950s, such election work is completely commonplace today.
(4b) Publicity resources
Through undertaking publicity campaigns that promote new government programmes, the party in government can promote its policy or management of an issue. Although such propaganda is officially intended to benefit citizens, ‘there is frequently little to distinguish this task from that of conducting propaganda intended to help the re-election of the governing party’ (Pinto-Duschinsky, 15 Sep 1998). This trend has become especially well-utilised since 1987 when the Fourth Labour Government spent millions of dollars selling government initiatives to the public. According to David Denemark, a series of ‘unpaid ads’ disguised as government public service messages ‘carried decidedly pro-Labour messages on taxes, job training schemes and crime’ (Denemark, 1992: p.177). Political scientist Joe Atkinson criticised the tax-funded advertising campaign, as it was ‘never merely informative’ (Atkinson, 1989: pp.100-101). According to a newspaper report, the Auditor-General agreed: ‘Auditor-General Brian Tyler investigated the [tax changes] campaign, and criticised it for not meeting standards of objectivity and balance. He questioned whether the amount of money spent on the campaign was justified, and said the tone, content and presentation was designed to enhance the Government rather than explain the tax changes’ (Evening Post, 1989).
The Fourth Labour Government became the most heavily marketed government in New Zealand’s history. This led the National Party to claim that in the 1987 general election it had been outspent by 10 to 1. National MP Simon Upton expressed his disapproval at the time: ‘Perhaps the most disquieting development of recent years has been the increasing attempts of politicians to use the enormous resources of the state to publicise party-political programmes in the media.... At first it was just cabinet ministers appearing in advertisements for state-controlled products and glossy booklets produced by the Government Printer. Now it is the widespread use of public relations consultancies, press secretaries and other experts to co-ordinate the government’s media relations and public image. All this has nothing to do with the proper business of government’ (Upton 1987: p.110).
Between 1987 and 1990 the Fourth Labour Government is said to have spent $114 million on advertising (Hope, 2001: p.314). Atkinson has reported that, ‘According to figures supplied by the then Minister of Tourism and Publicity, the Hon. Jonathon Hunt, the New Zealand Government spent $30 million on public relations and advertising campaigns between late 1987 and July 1989’ (Atkinson, 1989: p.101). After that, according to Harris, the Labour Government spent $66 million on advertising and PR in its second term (Harris, 1993d: p.14).
Unsurprisingly, when National came into government in the early 1990s, it too took advantage of this promotional opportunity. McLoughlin reported in 1993 that ‘National has been spending millions of dollars of taxpayers’ money on television about neighbourhood police, skills training, the health reforms and other issues its opinion polling has shown swinging voters are worried about. The strategy has worked’ (McLoughlin, 1993b: p.45). For example, the National Government spent nearly $2 million on advertising for a promotional campaign about ACC reform, and a further $2.87 million on a health reform campaign (Campbell, 1996c: p.7; Atkinson, 1993c: p.93).
The public clearly regard such government spending as party-political. According to an NBR-Consultus Insight poll on the health reforms campaign, ‘75% of respondents regarded the campaign as a "waste of taxpayers’" money, aimed at helping National win the election’ (Harris, 1993d: p.14). Furthermore, not only did National renege on its pledge to set up an independent watchdog but the party also refused ‘to answer parliamentary questions on government advertising and PR spending’ (ibid). Adding to this propaganda output, the National Government also constructed a prime ministerial communications unit, which was otherwise known as ‘the good-news machine’. Another trend is for the parties in government to hire public relations firms to handle publicity for the government. For example, in 1991 the National Government paid the PR firm Logos $384,000 to handle the publicity for the release of its annual budget (Johns, 1991).
(4c) Government expenditure
It is often accepted within politics that the governing parties are entitled to what has traditionally been known as the ‘spoils of office’. In particular, they are able to provide public employment and business contracts to political supporters, including those who have contributed financial resources to the party. The fact that parties are in control of the levers of the state also means that they are sometimes able to transfer some resources from the state to themselves when in government. As Martin Linton has pointed out, ‘While in theory the finances of the party and the government are kept in watertight compartments, in practice there are a number of grey areas where a governing party can transfer money from one pocket to another’ (Linton, 1994: p.2). There have also been occasions when governing parties have been accused of using their privileged access to taxpayers’ funds to grant public contracts to party donors. Bob Harvey has alleged that the National Party’s advertising agency for the 1975 general election, Colenso, was rewarded with government accounts as a result of helping National win the election (Harvey, 1992a: p.106). A similar claim was made in the late 1980s about the Labour Party in relation to its 1987 advertising agency, which was also Colenso. It was alleged that the agency had wiped the party’s debts from its 1987 election campaign in exchange for the awarding of lucrative government contracts for advertising campaigns. The NZ Herald reported that ‘The Prime Minister, Mr Geoffrey Palmer, last night confirmed that the Labour Party’s national executive had discussed the awarding of Government contracts to its former advertising agency Colenso as a way of paying off the Labour Party’s campaign debts’ (NZ Herald, 30 April 1990). There is some uncertainty of the exact details of the trade-off, but ‘the chief executive of Colenso confirmed that the party’s campaign debt had been paid after it came to an arrangement with the agency over settlement….. Mr MacDonnell acknowledged that Colenso did not receive the full $500,000 it was owed, but would not disclose what the final figure was that the Labour Party settled’ (NZ Herald, 30 April 1990 – cited in Williamson, 1999). See also: Collins (1990: p.3), (Frontline, 1989).
Likewise, in 1999 allegations were directed at the National Government, suggesting that the advertising agency Saatchi and Saatchi had offered to undertake the party’s campaign at a greatly discounted rate if the government awarded Saatchi and Saatchi a particular contract. One successful advertising contractor has confirmed that contracts have been negotiated on the basis of relationships between politicians and agencies. Grant Common of Network Communications was reported as saying that contracts are ‘based on who you knew and on top-down political influences’ (quoted in Harris, 1993d: p.14). Similarly, the NBR reported that advertising agencies that they spoke to admitted that despite preferring not to take on political campaigns, they ‘took the accounts in the hope of reeling in the favours down the track’ (Harris and Brettkelly, 1993: p.1993).
Many other allegations exist of parties using their position in government to return financial favours to party donors. For example, the Fourth Labour Government established the Union Incentives Scheme, through which over $1 million was distributed to various unions. It was revealed in Parliament that the Government gave ‘grants to 24 unions totalling $1,087,005.45, mostly for computer equipment’ (NZPA, 1990).
Again, in 2001 the Labour-Alliance government gave more than $700,000 to unions from the Employment Relations Education fund, which National MP Murray McCully claimed was a front for generous government donations to the union movement (NZPA, 2001a: p.2). Other favours can also be distributed. For example, Lipson contended that ‘the sale of honours’ was practised in New Zealand during the 1920s (Lipson, 1948: p.247). Again, in the 1980s and 1990s there appeared to be a correspondence between the awarding of honours and the donors to the party in government. Among those major donors on Fourth Labour Government’s honours lists were Sir Ron Trotter, Sir Robert Jones, Sir Ron Brierley, and Sir Michael Fay. Some of the Labour Party’s 1987 donors also did very well out of the Labour Party’s subsequent $14 billion dollar privatisation programme. The series of sell-offs provided a further opportunity for Labour in government to provide payoffs or favours to businesses friendly to the party:
Among those in the queue were many who had bank-rolled Labour’s return to office. Some of them were already asserting their influence on the boards of SOEs even before the move to sell prime public assets. So who got what? Allan Hawkins for Equiticorp got New Zealand Steel, Sir Ron Trotter for Fletcher Challenge picked up the Rural Bank and Petrocorp, Sir Ron Brierley got ‘our Airline’ Air New Zealand and badly wanted the BNZ. The BNZ instead went to merchant-bankers Fay-Richwhite. And as consultants in the sales process, firms like Fay-Richwhite and Jardins – firms with ex-Treasury officials on their staff – earned millions of dollars from the public purse (Frontline, 29 April 1989).
(4d) Government appointments
It is apparent that, when in government, parties use the resources of the state to reward their party supporters – or disarm their enemies – through appointments to state positions and other similar forms of patronage. New Zealand has traditionally had a large number of advisory boards, state-owned enterprises and other government agencies (or ‘quangos’) to which political parties in government can appoint their supporters. In 1973 Keith Jackson counted ‘some 2,400 patronage appointments (other than civil servants) to be made by governments’ (Jackson, 1973: p.193). Although the restructuring of the Fourth Labour Government in the 1980s reduced many of these positions, there are many examples of the Labour Party using its position in government during the 1980s to reward individuals who had been supportive of its reforms (James, 1987a: p.33). Similarly, in government the National Party was able to stock the myriad state boards with its own party members. In the mid-1990s Winston Peters issued a list of 55 people he said had been appointed to various positions ‘primarily because they are, or have been, National Party leaders and activists’ (quoted in Kilroy, 1996b: p.1). Peters suggested that in employing ‘party hacks and political cronies’ National was using state funds to pay off political debts (ibid). Then in 2002 one newspaper counted 41 party supporters appointed to 59 senior posts in Labour’s 1999-2002 term (Colin Espiner, 2003b). Similarly, in 2003 Colin Espiner ‘counted 50 Labour supporters in 69 senior positions in the present term’ (ibid). In his research at a similar time, ex-prime minister Geoffrey Palmer found that positions on quangos had grown to over 3000, with 900 appointments being made each year to about 400 bodies (Colin Espiner, 2003a).
According to Espiner, New Zealand governments continue to use patronage as a political resource, especially in giving party members appointments. However, one change is that the current Labour Party in government has appointed senior National Party members to senior positions. Examples include former National Party president Neville Young, former National Cabinet Minister Doug Graham, former National Prime Minister Jim Bolger, and former National electorate chairman Wira Gardiner (Colin Espiner, 2003b). Used in this way, political appointments are probably equally a political tool, as they are designed to disarm rather than empower the government’s opponents. For instance, appointing Jim Bolger to head Kiwi Bank would have made it harder for National to attack the initiative and also been embarrassing for the post-Bolger National Party leadership.
Similar future blog posts will look at the myths that parliamentary resources are not used for organizing the extra-parliamentary party organizations, and that the Parliamentary Service rules exist to stop taxpayer funds being used for party political purposes.
[Bibliography to be added later]
