The state funding of political parties is often justified as a recognition of the vital role these organisations play in the democratic process. It is said that it is only fair that the state offers some degree of support to parties for their part in providing democratic governance. However the reverse is true – state funding actually weakens political parties and encourages them to be ideologically bland. This very long, but crucial blog post argues that such funding plays a dramatic role in divorcing parties from civil society, leading to much reduced civic participation in politics. [Read more below]
It is argued that state funding of political parties is necessary to promote vigorous and strong political party organisations:
If parties are to be able to present themselves to the electors, and if they are to be able to research into alternative policies, they require the finance to employ adequately-sized staffs. The best way to ensure that parties have sufficient resources to carry out their democratic functions is to give them subsidies from the public purse. This argument comes typically (though not exclusively) from the political Left (Pinto-Duschinsky, 10 Sep 1998).
In line with this, in New Zealand the Labour Party reported to the Royal Commission on the Electoral System (RCES) that increased state funding would ‘stimulate political education and research by allowing parties to channel more of their maintenance funds into this area’ (Labour Party, 1986: p.51). Generally, it is argued that the costs of running a political party in a modern democracy are rapidly increasing, and without state subsidies the extra-parliamentary organisations are not adequately able to perform non-election work such as policy development. Furthermore, it might be said that with such large resources being administrated by governments, state funding is necessary so that political parties are not vulnerable to corruption. Such arguments revolve around the supposed neutrality or independence that state funding is said to provide political parties. For example, the RCES argued that without such funding, political parties
may be forced to rely on institutional sources, such as corporations or trade unions, to fund their activities. We consider that would be detrimental to our democracy and might, in the long term, lead to corruption of our political process or at least to the suspicion of such corruption (RCES, 1986: pp.211-212).
Likewise, the Labour Party has argued that ‘Given the escalating costs of election campaigns state funding inhibits an excessive reliance on "special interests" and institutionalised sources of finance, be they unions or corporations. Such reliance may not be in harmony with the views of all party members and may generate policy compromises’ (New Zealand Labour Party, 1986: p.51). More recently, Labour has suggested that scandals over donations to political parties have made state funding an ‘urgent necessity’ (Armstrong, 2000). Increased state funding, Labour says, would ‘restore confidence in the political system and combat the suspicion that hidden influence is being exercised on the political process through substantial secret donations’ (ibid). It seems likely, however, that the concerns over anonymous donations have had the opposite effect on public opinion, giving voters even greater reason to distrust parties and making them even less willing to see more public funding awarded to parties (Linton, 1994: p.100). Furthermore, the more significant party finance scandals have actually involved the use of state funds rather than donations, and these are likely to have reduced the public’s tolerance of state funding. For example, in 2001 the Alliance was scrutinised about the misuse of parliamentary resources. Then in 2003 the Act party’s electoral offices and agents were investigated. Certainly there is little support for greater state funding of political parties. The most recent opinion poll undertaken on the topic – commissioned by the National Party in 1988 – showed that 81 percent of New Zealanders opposed state funding (Press, 13 Sep 1988). Fourteen years later, Tim Bale reported little change, writing, ‘there is no popular support for state funding. Any attempt by Parliament’s existing occupants to get together a cosy cartel to introduce it would be undemocratic. It would only confirm the unfortunate, and largely undeserved, reputation politicians have of being a self-serving elite’ (Bale, 2002b).
Critics of state funding also point out that, wherever comprehensive state funding systems have been implemented, this has done nothing to solve the problems of political corruption: ‘The massive corruption associated with political funding in Germany and in Italy has occurred in countries where parties have received lavish state aid’ (Pinto-Duschinsky, 10 Sep 1998). Bale has also said, ‘state financing doesn’t put paid to corruption because parties always want more. Two of Europe’s best publicly-funded systems, France and Germany, have been plagued by party financing scandals for years. For all the banner headlines, Britain’s largely privately funded system is seen as very much cleaner’ (Bale, 2002b). In fact, state funding can lead to a completely new type of financial corruption. As discussed later in this posting, under state funding, a cartel-like arrangement is created in Parliament, with political parties becoming addicted to public subsidy and therefore constantly attempting to increase the dosage. Parties in Parliament are also likely to use state-funding arrangements to restrict the benefits to themselves alone, in an attempt to inhibit the entrance of competitors into the market. As Pinto-Duschinsky has argued, ‘legislators will have an incentive to make financial arrangements that benefit sitting members of Parliament themselves and which place challengers in their seats at a disadvantage’ (Pinto-Duschinsky, 10 Sep 1998).
It should be pointed out that state funding is not simply supported by the parties of the left and opposed by the right. Internationally, it has often been the parties of the right that have encouraged state funding. For example, Margaret Thatcher was the first leader of a party to receive state aid in the UK (Linton, 1994: p.11). Likewise, according to Linton, ‘the pressure for state funding in Germany did not come from the left or the centre of the political spectrum, but from the right’, and the left-wing SPD actually went to court to stop state funding (Linton, 1994: p.35).
Affect on Linkages with Civil Society
Much of the debate about state funding rests on the question of what model of party-society-state relations is desirable. The place and role of political parties has traditionally been conceptualised as that of forming an ‘institutional link between the various groups and interests of the wider plural society and the institutions of government’ (Mulgan, 1997a: p.233). Much like organised interest groups, parties were seen as being firmly rooted in civil society, but reaching up to represent those interests at the level of the state. This and other blog posts have tried to show that this has changed, and that this linkage is now weak. Undoubtedly, state funding reduces the political parties’ organic attachment to society. In particular, the state’s role in being the patron of the parties has an impact on their leaderships’ orientation towards rank-and-file membership. This is something that the Alliance’s Matt McCarten has also discovered:
There’s been a professionalisation of political leadership, backed up by state funding and resources for MPs which has distanced politicians from party rank and file…. In the old days you didn’t have big salaries and you had to rely on party volunteers more. Now politicians are no longer so reliant on the grassroots, they go direct to the media to put their message out (quoted in Laugesen, 1999f: p.A3).
The RCES also made this argument about the discouragement of membership recruitment:
We share the fears that have been expressed that an unnecessary increase in State assistance would reduce parties’ need to rely on their ordinary members for financial support and voluntary work. This could, we consider, lead to a lessened commitment to recruitment of, and responsiveness to, those members (RCES, 1986: p.211).
The RCES clearly saw a positive linkage resulting from high party membership and the financial reliance on members:
For the most part, our parties have met their financial needs from small donations from their members and supporters. By concentrating on the establishment and cultivation of large membership bases, the parties have avoided relying on substantial contributions from either the State or a limited number of large institutions or corporations. This has had beneficial effects, both in terms of high political participation by ordinary New Zealanders and in terms of the responsiveness and representativeness of the parties themselves (RCES, 1986: pp.216-217).
While the decline in membership has an array of causes, research on party membership has shown that the flourishing of alternative source of resources for the parties greatly reduces the incentives for retaining a large party membership that brings in membership fees, other financial contributions and voluntary labour. Thus, according to Pierre et al., ‘there will be less interest in catering for the interests and opinions of the rank-and-file in the intra-party decision-making process’ (Pierre et al., 2000: p.3). Furthermore, the reliance on the state increases the autonomy of the leadership and reduces the power of the ‘membership strike’ or departure:
For the individual member, involvement becomes less interesting because members no longer control a critical resource in their exchange with the party leadership; as Hirschman put it, ‘exit’ are reduced. Public subsidies therefore contribute to the alienation and indifference of the rank-and-file membership and increase the centralisation of the party organisation (Pierre et al., 2000: p.3).
The independence from civil society that state funding affords political parties, also has a tendency to moderate their politics. As Simon Lemieux suggests in Britain, state funding enhances ‘the independence of parties by freeing them to a large extent from the ties of their present backers…. It might also lessen the polarisation between parties, where Labour are still (rightly or wrongly) seen as the party of the ‘workers’, and the Conservatives as the party of capitalism’ (Lemieux, 1995). This increasing independence (or weakening linkage) also means that some of the classic functions of parties, ‘such as the articulation of interests and the aggregation of demands, and perhaps also the formulation of public policy’ are becoming undermined (Mair, 1997: p.153). According to John Henderson and Paul Bellamy, ‘A greater level of public funding of political parties would lessen their dependence on – and hence the possibility of undue influence of – special interest groups. However, such a reform runs the risk of further divorcing parties from the public’ (Henderson and Bellamy, 2002: p.91).
The ‘level-playing field’ analogy is also frequently used to explain the necessity of state funding, suggesting that political parties should have access to similar levels of resources in which to compete with each other. Proponents of state funding have argued that the allocation of public funds to parties and candidates is necessary to assure this equality. Implicit in this assumption is the idea that the distribution of private financing is unfair and undemocratic, leading to some sections of society having greater political influence. Yet while much has been written about the negative political implications of resources derived from civil society, little has been said about the implications of resources emanating from the public sector. It might be asked whether money from government is really so different to money from private sources. Arguably, such funding is no more neutral, just because it derives from state sources. In fact, the influence of state funding is substantial, affecting ‘the party system, the internal life of parties, the electorate’s view of parties, and the saliency of parties vis-à-vis other political actors’ (Pierre et al., 2000: p.13). Conversely, there is something to be said for the benefits of the private funding of political parties. For instance, it can be argued that it is actually very healthy for parties to be dependent for their existence on their ability to attract resources (of both a capital and labour variety) from their supporters. For this reason, the National Party has traditionally opposed the concept of state funding. As former party president George Chapman’s told the RCES:
Soliciting funds from the public may be tedious and time-consuming for the political parties but it has the beneficial effect of forcing the parties to expand their membership base and listen to the people. Contact between the branch committee member and the potential party member is a vital link in a participatory democracy. State funding can only weaken it (Chapman, 1986: pp.27-28).
Likewise, Act MP Rodney Hide has argued, ‘The good thing about the private funding of political parties is that it forces MPs to get out and talk to people and to get an active membership’ (Hide, 6 Nov 1998: p.24). It can be argued, therefore, that private funding of political parties is not necessarily undesirable. Instead of replacing the contributions of large corporations and labour unions, state funding possibly only supplants the contributions of individuals, which should in fact be encouraged as a form of political participation (Alexander, 1989b: p.16). Furthermore, there are good reasons for political parties to be reliant on even institutional sources such as corporations or trade unions, to fund their activities. These sources of support and political pressure provide an ideological anchor.
Becoming free from such organisational ties encourages ideological convergence, as parties no longer need to represent distinct social constituencies (and thus Labour is less the party of working people and National is no longer simply the party of business). Instead, parties become more independent from social groups, tending to be the vehicles of office-seeking politicians and prone to political convergence. As Patrick Seyd has pointed out, the effect of state funding is to weaken a linkage that helps structure and organise the party system:
It is attempting to tamper with existing conflicts and party alignments. For example, company and trade-union support of parties reflects one division of interest in society… [and] to argue that ‘State funding of political parties could remove the insidious connection between politics and vested interests’… is to fail to recognise that politics is about interests and linkages (Seyd, 1998a: p.204).
Any fundamental changes in party resources, such as increased state funding of parties, undoubtedly cause other changes to political competition. In particular, this intervention of the state interferes with the ‘market function’ of the party system. Hence, although state funding might ‘solve’ the financial problems that political parties are having in raising funds from civil society, it also masks the reasons why the New Zealand public no longer voluntarily give financial support to the parties and thereby allows the parties to avoid the deeper problems that afflict them. This is a point acknowledged by the RCES:
if parties no longer have a need to solicit funds from the public, the overall political process may stagnate and the natural growth and decline of political parties may be inhibited. Political parties are voluntary organisations and the extent to which a party can attract financial support is, at least in part, a reflection of that party’s appeal to the electorate (RCES, 1986: p.211).
For this reason, George Chapman has argued that ‘a party’s popular and membership support must reflect in financial support, otherwise its existence is no longer justified’ (Chapman, 1986: p.16). The Treasury, too, has voiced its opposition to proposals to introduce direct state funding to political parties, preferring a laissez faire situation because ‘the financial state of a party’ is ‘a reflection of its popularity with the electorate’ (NZPA, 1989a). By providing funding, the state is attempting to rescue New Zealand’s political parties from poverty when, in a sense, the financial problems of New Zealand parties are merely a symptom of their more serious credibility problems.
Cartelisation
State resourcing changes much about the nature of the party system because of the tendency for parties to become reliant on this stream of funding and band together to ensure its generous supply. Richard Katz and Peter Mair have argued that, as a result, a new type of party, the ‘cartel party’, has been emerging. The cartel party can be viewed as a further stage in the evolution of the electoral-professional party, and its central element is its reliance on the growth of state funding. Katz and Mair use the term ‘cartel’ because the arrangement that brings about this funding ‘depends on collusion and cooperation between ostensible competitors, and on agreements which, of necessity, require the consent and cooperation of all, or almost all, relevant participants’ (Katz and Mair, 1997: pp.107-108). It is alleged that nearly all political parties benefit from the resource-relationship with the state and are therefore all are reluctant to oppose it and instead generally encourage its extension. It is in this sense that the parties operate like a cartel.
The cartel is also characterised by the interpenetration of party and state. By being part of the legislature, parties actually occupy part of the state and have some control over the distribution of resources. As elsewhere, in New Zealand the parties have largely designed the generous provision of state funding themselves. It is here that it needs to be pointed out that the state is not simply some autonomous and exogenous factor influencing party life, but is instead controlled by the very political parties that it financially supports. Therefore, according to Mair, ‘it is perhaps more useful to think of it being the parties which are helping themselves, in that, in working to ensure their own survival, they are regulating themselves, paying themselves, and offering resources to themselves, albeit in the name of the state’ (Mair, 1997: pp.143-144).
As an example of parties becoming reliant on state funding and then being reluctant to oppose it, it is interesting that the Act party has previously been critical of state funding, but is now one of the most adept users of it. Following the 1996 general election, Act leader Richard Prebble criticised the use of taxpayer funds by political parties for their election campaigns, saying ‘that other political parties used the taxpayer to finance their election campaigns, while Act relied solely on supporters’ donations’ (NZPA, 1997). Prebble also claimed, ‘Only Act campaigned in the old-fashioned way, relying on donations from its 14,000 supporters’ (quoted in NZPA, ibid). He criticised the funding system as being one designed to keep new parties from being elected. However, it was not long before Act had clearly become part of the cartel, and in the 1999 and 2002 general election campaigns it also used parliamentary resources such as rental cars, accommodation and daily allowances. The way that the party used its state-funded electoral offices and agents also suggested a sophisticated manipulation of resources for political ends. There are other examples of MPs and parties complaining about the unfairness of the system until they received their own share of the resources. For example, although the Social Credit party’s Bruce Beetham complained about the misuse of taxpayer funds in 1969, then expressed his ‘horror at the "scandalous" misuse of public funds by research units preparing for general elections in 1975’, in the end, according to Klinkum, Social Credit actually soon did the same, becoming a large user of the public resources (Klinkum, 1998a: p.193). Similarly, when New Zealand First was formed in 1993 it did not qualify for state-funded broadcast advertising but said it was opposed to the funding and would not have accepted it anyhow (Goulter, 1993: p.2; Shearer and Shearer, 1994: p.29). Now that the party also receives such funding, this criticism has disappeared.
State funding has an important effect on the nature of political competition, especially in terms of consolidating the existing party system and artificially inhibiting change. Pierre et al. have commented on the way in which subsidies protect established parties from the competition of new parties:
Since the parties in government and parliament design subsidies themselves, the subsidy system is likely to be structured in ways which favour the established parties. This, in turn, interferes with the ‘Darwinistic’ life-cycle process of party formation, maturity and decline; public subsidies are said to be a life-support system for ageing parties which obstruct the natural, organic development of the party system. Subsidies, in this view, sustain the status quo ante in the party system by strengthening the competitive advantage of the established parties vis-à-vis new actual or potential party formations (Pierre et al., 2000: p.3).
Certainly in New Zealand, the overall effect of the system of state funding has been to consolidate the present players in the party system and prevent the entry of new competitors. Much like the state’s ban on television advertising by parties, and the Electoral Commission’s uneven allocation of state funding for election broadcasting, the provisions of generous parliamentary funding operates as an impediment to the competitiveness of new parties in New Zealand politics. It is significant that the only new political party to be elected to Parliament since the introduction of MMP is the Act party, which was bankrolled by millions of dollars of private wealth. No other new party not already represented in Parliament has been able to compete with the millions of dollars of state-funded resources that the other parties have at their disposal. The other new parties – the Green Party, United Future and the Progressive Coalition Party – have all been launched by MPs already in Parliament.
The most blatant examples of the main parties colluding to protect their state-funded advantage relate to the provision of election advertising money, which has always involved a questionable relationship between the two main political parties and the state. This relationship was made more overt when in October 1995 the Labour and National parties legislated to add one Government and one Opposition representative to the Electoral Commission whenever it allocated election-broadcasting money. It is not just National and Labour which have sought to restrict state funding. In 1996, when there were four elected parties in Parliament, New Zealand First and the Alliance argued that all other parties should be excluded from Electoral Commission election funding (Edwards, 1996b). While the proposal was pushed through by Labour and National, it was opposed by most of the smaller parties as well as the Electoral Commission (Jackson and McRobie, 1998: pp.292-293). The way that parliamentary funding has been configured, it has often disadvantaged even the smaller parliamentary. For instance, although the National and Labour parties were not financially penalised in terms of their parliamentary funding when various MPs left those parties in the mid-1990s to start and join other political parties like New Zealand First, United, and the Right-of-Centre Party, when it came to Alamein Kopu leaving the Alliance Party in 1997, that party’s funding declined ‘by NZ$47,000 in the first year and NZ$77,000 in the second and third years as the total number of remaining Members fell to twelve and therefore below the "medium level" for state support’ (Klinkum, 1998b: p.470). This decision made it appear that there was one rule for the major parties and another for the minor parties.
Similarly, allegations have been made by the Act party that the actual legislation governing the allocation of election broadcasting funds has been constructed by National and Labour to benefit the established parties and restrict the entry of new parties into Parliament. According to Act, the uneven distribution of such funds is inconsistent with the Electoral Act, because the legislation contains ‘a number of measures which make it clear that all candidates and parties are to be treated equally. The size of deposits and limits on campaign expenditure are identical for all parties and candidates. All rules are the same for all parties and candidates’ (Tate, 1999: pp.1-2). The party has therefore argued that ‘The democratic principle on which allocations should be based therefore is that all registered political parties conducting a nationwide campaign should receive the same amount of time and money. It is grossly undemocratic and unfair that some parties should receive more time and money from the taxpayer than other parties’ (ibid). This complaint is consistent with the theory of Katz and Mair, who have argued that established major parties can use their control over resources not only to sustain themselves but also to hinder the rise of new parties. In countries like New Zealand, the effect of state funding has been to reinforce the existing arrangements in the party system. Because the division of resources is determined by parliamentary strength, the system acts to perpetuate the status quo and make it more difficult for outside parties to enter, or small parties to grow.
Klinkum also explains the lack of public debate about the use of parliamentary resources by reference to the cartel-like arrangements. Although one of the reasons for this lack of debate is simply that the parties each keep quiet about their own resources, another reason there has been so little discussion is that all parties benefit from the existing arrangements. This means there is no political capital to be gained from exposing the whole system of funding (Klinkum, 1998b: p.428). The covert nature of the funding arrangements can only add to suspicions about the nature of the relationship between the state and political parties. It seems to be a telling sign of a cartel-like situation that so few controls over the utilisation of parliamentary resources exist at a time when government insists upon greater transparency from other state agencies. The reason that state assistance for party-political activities tends to be covert rather than overt is explainable, according to Palmer, by the simple fact that the subsidies are unpopular with the public (Palmer, 1992: p.138).
Turning Parties into Virtual Government Departments
Katz and Mair believe that the cartel behaviour fosters the development of a ‘political class’ in party politics. In their view, politicians are increasingly a self-referential group of career professionals who develop an independent understanding of goals and objectives:
Finally, with the emergence of the cartel party, comes a period in which the goals of politics, at least for now, become more self-referential, with politics becoming a profession in itself: a skilled profession, to be sure, and one in which the limited inter-party competition which does ensue takes place on the basis of competing claims to efficient and effective management (Katz and Mair, 1997: pp.111-112).
Consequently, the leaders become divorced from party principles and their members, activists, and even their own voters – continuing the process Robert Michels described as early as 1911. A good example of this shift is a statement by Act MP Rodney Hide: ‘We bump into our opposition parties in the airport all the time and you end up actually chatting away. There’s a sort of public thing of being against each other politically and all the rest of it, but there’s also a camaraderie in the sense that you’re in the same business’ (quoted in Evans, 1995: p.18). Simon Carr of Act paints a similar picture:
It is a secret society, joined by covert bonds and awful oaths of loyalty (if not to each other). However much they attack their opponents, however different their world view is, however ferociously they represent their constituents’ interests – they have more in common with each other than they have with us. That’s worth unpacking: Jim Anderton has more in common with [Winston] Peters than he does with the homeless, the downtrodden, the huddled masses of Sydenham (Carr, 1997: p.37).
It is a common source of resources and the disconnection with society that allows this ‘political class’ to develop. By receiving the state’s subsidies, the parties are partially co-opted into the state, blurring the line between political parties as voluntary, representative structures and the state. This provision of funds therefore raises questions about the desirability of the closer relationship between the state and political parties. Not only does this relationship decrease the participatory character of political parties, disrupting the whole notion of political parties as the representative organisations of civil society, it also erodes the barrier between the parties and state. Hence, while state funding might provide the New Zealand political parties with increased independence from their more traditional ties in civil society, they conversely become more like state-funded bureaucracies or ‘virtual government departments’. According to Hague et al., state funding means that ‘major parties are tending to converge into a single system of rule: the "party state"‘ (Hague et al., 1998: p.137). In some Western European countries the relationship between party and state has reached the point where commentators even refer to the ‘party-state’. This is where parties are so dependent upon state subsidisation (along with regulation) that they are less like independent organisations and more like agencies or departments of the state. For instance, when the German Constitutional Court investigated the constitutional validity of state grants for political parties in 1966, they reported that ‘there was a danger that the parties represented in parliament were devising a system to favour themselves and making themselves "part of the organised structure of the state" ‘ (Linton, 1994: pp.38-39). As the Economist has argued, ‘the greater the taxpayer subsidy, the greater the risk that parties will become institutions of the state rather than voluntary associations of their members’ (Economist, 1999c: p.47).
Parties are an essential part of civil society. Thus, there is a good argument to be made that the state should be kept at a distance otherwise it may come to regard political parties as ‘public utilities’ (Seyd, 1998a: p.204). As Bale has argued, ‘The whole point about parties is that they stay rooted in civil society so that the various competing interests of that society never capture, nor are captured by, the state’ (Bale, 2002b). The danger is that the growing dependence on state funds can lead politicians to become less interested in advancing political objectives than in managing the state for their own good (Pierre et al., 2000: p.2). Political life then becomes dominated by the state and is taken away from the citizenry, and left only for a political class to participate in. One left commentator in the UK has argued that, the introduction of comprehensive state funding would finally turn political parties into bland state bureaucracies: ‘This would finally seal the fate of democratic politics in the UK Parliament. The parties already act more as a bureaucratic state department than independent political movements. Put them on the government payroll, and the deadening process will be complete’ (Hume, 2001). Arnauld Miguet, commenting on the French case, argues: ‘what becomes apparent and is most striking in the French legislation is that since the prohibition of corporate funding, political parties are largely dependent on the state which dominates public life. Political life has been nationalised and there is even more centralisation at the level of the parties’ (Miguet, 1999: p.65). This situation leads to a convergence of the state and the major parties into a ‘party state’ system of rule. Interestingly, the current New Zealand prime minister has previously criticised the overly liberal use of state-paid advertising by parties in government to promote their reforms, negatively alluding to a ‘seamless web between party and government’ in which voters pay to have policies sold to themselves (Harris, 1993d: p.14). The existence of this political class operating in a ‘party state’ is likely to further increase the public’s dissatisfaction with parties and politics.
In New Zealand, the party-state relationship is a very advanced one, with political parties no longer playing such a central part in policy creation. It could be argued that instead of ‘coming from’ and ‘belonging to’ civil society, New Zealand’s parties now seek to implement the state’s policies and play a role of legitimising them to the public. Rather than being rooted in civil society, the parties – or at least the parties’ MPs – are in effect a collection of state-subsidised members of the political class. They make use of the old fragmenting vehicles that are political parties to connect with wider society. Especially since the mid-1980s much of the most important legislation has originated from within government departments. According to Colin James, political parties are no longer the creators of policy, but often merely the implementers of the state’s ideas:
It is true that parties have seen themselves, at least in some sense, as vehicles for policy development…. In this convenient world, parties thought up policies and public servants implemented them. Actually, public servants, at least in the past 30 years, have done most of the thinking up of policy or channelling of it from some other external generator and the parties’ role has been principally as a correction mechanism (quoted in James, 1998: p.181).
Furthermore, political parties no longer initiate policy ‘except where there has been some strong feeling (employment equity is an example) or a minister with an intellect of his/her own and organising skill (Simon Upton’s health and science reforms)’ (James, 1998a: p.181). There are many examples of important policy originating from within the state bureaucracy, for example, ‘Treasury Secretary Bernie Galvin boasted of the influence his department wielded over the Minister of Finance: "His initial thinking was not in favour of the Goods and Services Tax. Treasury convinced him of that" ‘ (Sheppard, 1999: p.14).
According to political scientist Shaun Goldfinch, it is not ‘unusual for public servants, including Treasury officials, to wield immense influence in policy formation, even, in some cases, to a greater extent than their political masters’ (Goldfinch, 2000: p.200). Increasingly, the role of developing policy for the parties is also carried out by the state-funded parliamentary staff, and in particular by press secretaries. These recently politicised positions were previously staffed by Internal Affairs career press secretaries who were expected to be neutral and work for a number of different regimes, implementing whatever their employers wanted. According to Ian Templeton this has since changed:
Then they were seen as the link men between the departments and the ministers, whereas now the ministers’ offices in the Beehive are more engines of policy, and in some cases what ministers need now are policy analysts rather than staff who know the minutiae of how departments work (quoted in Kilroy, 1998: p.13).
Templeton has elaborated on the changing division of labour within ministerial offices, saying, ‘Ministers used to do the political work themselves and the secretaries did the secretarial work, but now (ministers) are pushing out press statements, going on radio and television and they need people around them who are alert to the possibilities’ (quoted in Kilroy, ibid). Party-political ‘state servants’, like Labour’s Heather Simpson, now dominate that party’s policy. After becoming director of Labour’s research unit, Simpson became heavily involved in policy development, and according to another research unit director, her ‘stamp can be seen on every page of Labour’s pre-election policy announcements and its election literature’ (quoted in Klinkum, 1998a: p.176). Simpson epitomises the concentration of power in a backroom party professional: paid for by the state, answerable only to the parliamentary leader, but hugely influential on policy development and hence party direction. Klinkum has written about many such situations where parliamentary staff (particularly in the research units) have essentially designed party policy. For example, ‘While Ann Hercus, a Labour MP, was responsible for Social Welfare policy prior to 1984 the relevant researcher wrote most of the policy because the Member was so busy’ (ibid: pp.178-179).
The Influence on Internal Party Configurations
Through providing funding to the parties the state has a significant influence on the internal configurations of political parties. An illustration of how the state can deliberately use its subsidies to influence the internal affairs of the parties is seen in the conditions that are sometimes put on the funding. For example in Finland, ‘the parties must transfer some of their subsidy to women’s organisations and to lower levels of the party organisation. Since 1990, part of the Finnish party subsidy is also earmarked for international activities’ (Pierre et al., 2000: p.9). Likewise, in Holland, ‘party support is specifically targeted at research activities (since 1971) and education (since 1975)’ (ibid). Similarly, in Ireland, ‘the funding for political parties must be spent on general administration of the party; research, education and training; policy formulation, and; co-ordinating branch and party members’ activity’ (MMP Review Committee, 2001: p.89). Similarly, in New Zealand, the direct state funding for the election campaign has to be spent on broadcasting, strongly shaping the way that parties design their campaigns. It is, however, the indirect funding through Parliament that is more influential on the parties. Seyd has argued, for instance, that whenever state funding is introduced it has a significant impact upon existing power structures, and that normally it is the power of the parliamentary leadership that is strengthened:
To whom would the state allocate money – the leader, the parliamentary party, the extra-parliamentary party, constituency parties, or candidate? The power of whosoever receives the money would be enhanced by such money. Party leaders are unlikely to reduce their powers by allowing grassroot activists to receive funds directly (Seyd, 1998a: pp.203-204).
Related to this, one of the major implications of the fact that in New Zealand the state resources are provided indirectly is that the parliamentary wings of the parties control such resources. This, in turn, reinforces their strong control over their parties. The extra-parliamentary wings of the Labour and National parties (which have traditionally controlled the resources) therefore have their independence and relevance reduced. It might be argued that at least with the direct state funding of political parties the money often goes to the extra-parliamentary wing and therefore acts to counter the increasing dominance of the parliamentary leadership of the parties. In 1999 the General Secretary of the Labour Party, Rob Allen, commentated, ‘there is certainly a tension over the resourcing of the parliamentary end… as there are significant resources in the parliamentary party provided by the state and very little provided by the state to the party organisations themselves’ (Allen, 1999).
Even within the New Zealand parliamentary wings, the configurations of the funding empowers the party leaders over their MPs. This is because the Parliamentary Service rules about control of the resources provide the leaders with complete control over Leaders’ Funding and the Party Group Funding (O’Sullivan, 1999). The only budget that individual MPs have some control over is the Party Members’ Funding. Even then, if an individual MP ‘wants to’, they can agree to give up some of that budget to their party caucus controlled by the leader, and in many cases they do (ibid). In terms of the research units, the leadership of the parties have total control over these. Despite formally being their employer, the Parliamentary Service does not control the units and other party staff, which means that the parliamentary leadership is able to decide exactly what type of work the units undertake. According to Klinkum, ‘the Parliamentary Service is unable (and in any case unwilling) to challenge unit priorities which they know to be unacceptable to many Members’ (Klinkum, 1998a: p.230).
Control of the parliamentary resources can be a contentious issue for the parties in Parliament. When the Alliance was in Parliament, there was an ongoing battle between the party organisation and the parliamentary caucus for control of the state-funded resources. In particular, most Alliance MPs were determined to control their own out-of-Parliament staff and electorate offices, establishing such offices in their own electorates in an attempt to build up local support for themselves as individuals. In contrast, the Alliance head office was determined to use the resources collectively in the cities and regions to build the extra-parliamentary organisation and create support for the party as a whole. Furthermore, the parliamentary funding that the Alliance ELU received for extra-parliamentary functions was under constant threat of being cut or restricted by the party leader. In this way, the leader was able to ensure that the extra-parliamentary activities of the party organisation were consistent with his political agenda.
Through his control of these resources, Jim Anderton was independent of the wider Alliance party and yet also able to assert his control over extra-parliamentary officials. He was able to turn the resource tap on and off at will in order to control staff who were also activists and office-holders within the party. The party organisation, president, general secretary and so forth were forced into a high level of compliance with the leader of the parliamentary wing. Also, because the party organisation received such ample resources, it was not required to recruit party members and activists for their voluntary labour and their provision of resources. Without a large membership or a healthy base of activists, the process was self-reinforcing, with the party organisation becoming even more dependent on the party leader and caucus. By controlling both wings of the Alliance, Anderton was better able to shift the party closer to the political centre, moderating its policies and marginalising its more radical and left-wing members. Even when the party began to split in 2001, Anderton’s caucus faction withdrew their MP tithes in an attempt to leverage back control. The ELU, too, was effectively closed down and its staff (including this author) were made redundant.
Within the parliamentary caucuses of the other New Zealand parties the state funding has been utilised in such a way that it becomes another tool for the leadership to control and discipline its MPs. For example, access to research units can be controlled by the leadership to punish or reward individual MPs. Klinkum has reported that ‘ministers of the Fourth Labour Government may have sought to restrict the access of rebel backbenchers, such as Graham Kelly, to the research unit because they were not happy with the sort of views they were espousing’ (Klinkum, 1998a: p.135).
The increase in state funding over recent years has clearly made political parties less reliant on their extra-parliamentary party for research and other staff-related assistance and therefore more reliant on the parliamentary professionals. David Lange has argued that there has been a direct correlation between increased state funding and the reductions of personnel and resources in the extra-parliamentary organisations (Lange, 1992a: p.164). In terms of the research units, their role in policy creation has generally been inversely proportional to the strength and interest of the extra-parliamentary party organisation in policy formulation. According to Klinkum, ‘There is likely to be an inverse relationship between high levels of extra-parliamentary party (EPP) policy input and the level of research unit involvement in policy development’ (Klinkum, 1998a: p.176). When an extra-parliamentary organisation is strong and centrally involved in policy creation, there is a smaller role for the state-funded research units to play, and vice versa. The involvement of Labour’s research unit in policy formulation has traditionally been less than that of National’s research unit, due to the fact that the extra-parliamentary Labour Party has traditionally seen itself as a vital part of policy formation, while the ‘National Party outside parliament have placed more emphasis on organising to win elections than on influencing policy. This has left policy making in the hands of the parliamentary party. With over worked Members, it has sometimes been the case that the research unit has filled the void’ (ibid).
Obviously state funding also increases the professionalisation of the parties. By providing generous funding to the parties in Parliament to employ professional staff, the state makes the parties more professional-oriented, strengthening the position of party professionals by assuring their livelihood, and further creating a distance between the parties and the electorate. The locus of power has thus shifted within the parties, and certain individuals within the parliamentary staff have now emerged as key players in party affairs. As Laugesen has written: ‘While the backroom kingmakers have always been around in the established parties, today’s kingpins have emerged from the reliance that new under-resourced parties have to place on a few committed individuals’ (Laugesen, 1996c: p.13).
Conclusion
New Zealand has an elaborate and generous system of state funding for political parties. This system is covert in the sense that the funds are widely used for purposes for which they are not officially intended. This series of blog posts looks at the debate about whether parties should be supplied with such generous state resources or freed from such state patronage. It has argued that making parties seek out their own sources of income would be beneficial to the party system because this would encourage political parties to reconnect with various elements of civil society. Parties without support from civil society would be allowed to fade away rather than be kept alive by state subsidies. Furthermore, parties without substantial amounts of capital would be forced to develop alternative means of communication and persuasion (as the Green Party did in the 1999 election campaign). The inflation in election expenditure might also be reversed, and election campaigns might become less of a ‘media circus’. In an ideological sense, the removal of subsidies would encourage parties to be more politically distinctive. This is necessary because as parties become increasingly state-orientated, and are correspondingly less firmly tied to their bases of support in society, they are becoming more politically bland and centrist.
Significantly, the exploration of the state-party financial relationship in this series of posts of state funding illustrates that although the New Zealand parties have been in decline in the electorate, the leaderships of the parties in Parliament possess more resources than ever before. They have adapted to modern conditions by penetrating the state and obtaining its resources for themselves. They have been helped in this task by the Parliamentary Service’s ‘corruption management’, whereby the misuse of millions of dollars of resources for party-political purposes is either ignored or explained away. Such state-subsidised privilege is, however, vulnerable to voter backlash. Accepting and extending these resources while at the same time pretending to be deeply rooted in civil society lays parties open to the resentment of voters who prefer their parties to be genuinely representative and thrive off the voluntary elements of civil society and not the compulsory elements of the state.
