liberation

Issues in New Zealand politics in 2007

It might seem a bit odd to have a blog post about issues in NZ politics in 2007. But every year the European Journal of Political Research publishes a yearbook looking at what’s happened in the previous year in politics of 20+ western democracies. For the past decade or so, this has been written by Jack Vowles, but this year I’ve given it a go because Prof Vowles is no longer in the country. And the latest Political Data Yearbook (Volume 47, Issue 7-8, 2008) has just been published. You can read this in university libraries, and some universities will have online access to it here. But for those that can’t, below is the text that I submitted to the yearbook.  Although it pertains to last year, hopefully what I’ve written is actually a useful context for understanding the current election campaign. The extensive analysis includes discussion of all the major issues from an action-packed policy year involving the ‘anti-smacking’ law, the Electoral Finance Act, extensions and enhancements to KiwiSaver and Working for Families, the terrorism raids, scandals about Air NZ in the middle east, employment and politicisation in the public service, and the charging of Labour MP Phillip Field with corruption and bribery. There was also the rise of John Key and the attempted revitalization of Labour. I argue that although it appears contradictory, political consensus and conflict increased in tandem during 2007. [Read more below]

[political finance] The inequitable allocation of TV advertising

The television election advertising for the political parties have just started screening. Once again, the inequality of the system is made obvious, with those parties that least need the exposure being given the vast bulk of public money to advertise what the public already knows, and those parties that are struggling to get their message heard are marginalised by the Electoral Commission. By choosing to reward Labour and National with a million dollars each and plenty of broadcast time, but only giving a few crumbs to the parties outside Parliament, the Electoral Commission has once again shown why they are part of the problem rather than the solution to issues of political finance and today’s uneven electoral playing field. A truly democratic and fair system would have seen the advertising monies and broadcast time divided up evenly, as it happens in many other countries. Instead our election campaign continues to operate under a cartel model of political finance designed by Labour and National. [Read more below]

Andrew Geddis: Courts will decide 'where the lines fall' on current electoral rules

Another electoral law expert has confirmed that election activity is being thwarted by the uncertainty created by the Electoral Finance Act. Associate Professor Andrew Geddis has recently been appointed by the Government's Expert Panel on electoral law, and already he is declaring the EFA problematic for the current election campaign. In the latest Otago Bulletin (which is the 'fortnightly newsletter for university staff') he is quoted as stating: 'People want to get their election campaigns going, but it is difficult to know where the lines fall and there is no way to know until courts rule on issues which arise from it'. This is yet another significant public statement from a leading authority that signals that the EFA is having a chilling effect on political competition. In this statement, Geddis now seems to be agreeing with those that objected to the EFA on the basis that political outcomes will increasingly be decided by the judicial process rather than the electoral process.

State servants and democracy

There is increasing awareness that the Electoral Finance Act is anti-democratic. However, many other elements of New Zealand’s electoral law are also problematic and need to be addressed. The Electoral Act 1993 and Broadcasting Act 1989 have all sorts of very important rules that decrease electoral participation, democracy, and generally infringe civil liberties. The barriers placed on state servants standing in elections is finally getting some attention. Today’s NZ Herald opinion piece by Pat Baskett entitled Election-time rules for state servants mildly threatening provides a decent flag in the air. Baskett argues that the directions given to state servants (ie teachers, defence personnel, government department workers, police, etc) about standing in elections, joining political parties, expounding a party line, or having a political bumper sticker on your car are rather draconian. [Read more below]

The finances of New Zealand First (draft)

In light of the recent exposé of New Zealand First’s dodgy donations from wealthy businesspeople, it’s worth taking an in depth look at the party’s financial history. Such an examination highlights the many dubious and unusual elements of the party’s operations, the extent to which New Zealand First is merely a fiefdom for its leader, the high secrecy involved, but also the extent to which the party is actually largely reliant on parliamentary funding for its existence. [Read an early draft below]

[political finance] Listener: EFA is an ass, a dog, and a dead duck

The Electoral Finance Act (EFA) is an ass, a dog, and a dead duck. This is what the Listener says in its editorial this week, which calls for the repeal of this ‘unworkable’ and ‘absurd’ legislation. A number of good points are made. First, it looks increasingly possible that some electorate seats ‘and possibly even the election itself, will be determined not by voters but by the High Court’. The many judicial appeals made under the EFA ‘are unlikely to be resolved before the election, raising the possibility of election night results being overturned later’. Second, in such litigation ‘The small parties, with fewer resources to spend on lawyers, are at a distinct disadvantage’. Third, the Listener recalls an important statement made by the Royal Commission on the Electoral System which seems to have been ignored by political finance reformers – the Commission said it’d be ‘futile to attempt to regulate all expenditure which might, directly or indirectly, affect the electoral chances of any candidate. Measures to control political spending must be confined to what is practicable’. The Listener editorial concludes by correctly pointing out that ‘Fostering a healthy democracy was never the motivation for this piece of law-making. And nor will it be the outcome’.

[Third parties] 13: The rise of anti-third party ideology

Part of the explanation for the disconnection between political parties and third parties such as interest groups or pressure groups can also be found in the rise of anti-interest group ideology in the 1980s and the subsequent marginalisation of groups representing various class interests. [Read more below]

[Third parties] 9: Modern ties and party privatisation

Parallel to decline of the traditional relationships between New Zealand political parties and so-called ‘third parties’, the parties have actually been developing new relationships. It is apparent that many of the modern groups that are aligned to – or have relationships with – parties are actually elite-type organisations that do not represent significant social forces in society. These groups are established to provide a way around state political financing laws, provide intellectual resources, or simply supply legitimacy. They are an attempt to illustrate to voters that a particular party has links with civil society and therefore has support in the community. [Read more below]

[Third parties] 3: Act’s links

Unlike many of the new political parties formed during the 1990s that have been internally-created parties – parties formed by parliamentarians rather than by forces external to Parliament – the Act New Zealand party arrived in part due to the urging of a number of third party organisations, and once in Parliament it has continued to cultivate relationships with civil society organisations [Read more below]

[Third parties] 2: National’s links

Norman Kirk famously described Federated Farmers as ‘the National Party in gumboots’, and Austin Mitchell pointed out that Federated Farmers and National Party branch meetings often appeared to be ‘the same people sitting in different rooms at different times’. However, National’s relationship with organised farming and business interests has definitely dwindled since then. Similarly, although traditionally the party was allied to many powerful institutions in New Zealand society, National’s deep connections with civil society has been replaced by an organisational professionalism. This post looks in detail at the National Party’s various third party linkages over its history. [Read more below]

[political finance] Glenngate 3: Mike Williams’ corporate deals

In 2005, Labour Party President and chief-fundraiser Mike Williams was gloating in the media about Labour's new billionaire financial friend Owen Glenn. Three years later he was handing in his resignation due to his public deception about a political loan from Glenn. Not only has the ‘Glenngate’ scandal raised some fascinating issues about Labour and political finance but also about Mike Williams’ role in helping keep Labour operating as a ‘corporate party’. [Read more below]

[political finance] Glenngate 2: The politics of Owen Glenn

Political parties can be judged by who their known financial backers are. The Labour Party’s biggest financial contributor is the low-profile billionaire Owen Glenn. So just who is Owen Glenn? And what does his rightwing political beliefs say about his choice to back the Labour Party? [Read more below]

[political finance] Glenngate 1: Summary of the scandal

The dust has now settled on the Owen Glenn political finance scandal, which means it’s probably an appropriate time to make some observations and conclusions about Glenn and his involvement with political parties in New Zealand. Future posts will show how this political finance scandal illustrates that the Labour Party is every bit as much of a corporate-sponsored party as National is, and that Labour is hypocritical and self-serving when it comes to the issue of political finance and regulation. This post is the first of five about ‘Glenngate’. This first post attempts to provide a summary of what actually occurred. [Read more below]

[political finance] EPMU and Labour

A Labour Party-affiliated trade union, the EPMU, Is attempting to register as a ‘third party’ under the Electoral Finance Act (EFA), even though it isn’t required to and isn’t necessarily eligible to. This raises some interesting questions about the relationship between unions and the Labour Party, and about further problems with the EFA. [Read more below]

[political finance] Another example of backdoor state funding

Within Parliament it’s commonly known that the staff employed by the Parliamentary Service are routinely involved in carrying out party political work. This is one of the many ways in which the main political parties have managed to create an elaborate system of backdoor state funding. For many years all the parties in Parliament have operated in a cartel-like arrangement whereby none of them publicise the rule-breaking of the others. Over the last couple of years this arrangement has broken down, and in the weekend we saw the latest example: National released to the media an email sent last week by Tim Barnett’s Office Manager, Lynne Renouf. The email discussed the upcoming party selection for the South Dunedin electorate, and was according to the NZ Herald, ‘politically inflammatory’. The newspaper claimed in a story entitled Embarrassing public service email blunder, that  ‘The case has drawn accusations the public service has strayed from its strict obligation of neutrality.  As office manager for Barnett, Renouf is hired and paid for by Parliamentary Services and is not meant to be engaged in any overt political involvement’. Renouf was previous an electorate office worker for 15 years for ex-Mana MP Graham Kelly.

[political finance] Anti-Labour website shut down

ePolitics meets political finance in the case of Andrew Moore’s Don’t Vote Labour website being shut down after the Electoral Commission informed Moore that he stood to be fined up to $10,000 if he continued to publish it without providing his personal details. In stark contrast, the Commission has also publicly stated that political party websites don’t necessarily need to comply with the same rules. The shutting down of this anti-Labour website is the first case under the EFA that shows just how ridiculous and anti-democratic the EFA is. [Read more below]

[political finance] “Money doesn’t talk”

The latest Listener magazine business column by David W Young deals with the issue of the ‘influence of big business on politics’ and the question of to what extent business donations influence parties and governments - see Money doesn't talk. Young argues (along very similar lines to previous posts on this blog) that business influence on politics occurs through a number of mechanisms, but that political finance is not a significant cause of this influence. Young is also kind enough to refer to me in his column! [Read more below]

National tries to be squeaky clean; the Greens want to believe otherwise

The National Party has announced that it will not be endorsing any third party anti-Government advertising campaigns. Their announcement is mainly in response to the appearance of a marginal campaign group entitled 'Give NZ a Fair Go'. National’s statement is somewhat of a damp squid in the sense that National is simply announcing that they will be doing what they always do – which is not to endorse other interest groups or campaigns. Political parties generally don’t. But what the statement does point to is just how ultra careful and open the National Party are attempting to be. National’s campaign course is clearly all about safety. This year’s general election is their election to lose. So they won’t be taking any risks at all, and they’ll be doing everything they can to appear squeaky clean. No party – especially National – will want to be seen as being involved in anything untoward or covert. They’ll play the game by the book. And they’ll do their best to disassociate themselves from anyone seen as extremist. Instead of a bitter campaign – I think the parties will be falling over each other to be seen as nice. Negative advertising may actually play a more limited role than in other recent elections. I was briefly interviewed about this on Radio NZ National this morning. You can listen to the MP3 podcast of that here – I’m about half way through the item. For an alternative view read the Greens’ Russel Norman’s attempt to make logic fit his view that National will indeed be associating themselves with religious extremists. The post suggests that the Greens are stuck in 2005 and have failed to actually comprehend the huge damage that the Exclusive Brethren campaign had for National.

[political finance] State intervention in the democratic process: the case for less, not more

With the introduction of the Electoral Finance Act (EFA) it’s timely to examine the implications of the shift toward greater state regulation of politics. In this draft article I put forward the case against a highly regulated political process in New Zealand, that the EFA should be repealed, and why the state’s intervention in the democratic process should be reduced. I welcome any constructive feedback on this draft.

[political finance] Jane Clifton: Money does not ‘buy elections’ in NZ

Jane Clifton’s political column in this week's Listener is a must-read for anyone interested in determining whether the so-called undue influence of money in politics makes the Electoral Finance Bill necessary. Clifton puts forward a very similar case to my blog post on Political finance and inequality in NZ, which challenges the simplistic assumption that economic inequality in New Zealand translates directly to political inequality. [Read more below]

[political finance] Listener: ‘One law for MPs Bill’ is ‘blatantly unfair’

This week’s Listener editorial brands Labour’s Appropriation (Continuation of Interim Meaning of Funding for Parliamentary Purposes) Bill as the ‘One law for MPs Bill’, and strongly criticizes the proposed legislation for being ‘blatantly unfair’. The editorial says that despite the bill’s tedious title, and combined with the ‘anti-democratic’ Electoral Finance Bill, it will have a profound impact on elections by allowing incumbent political parties and MPs to have a huge advantage over any challengers. Essentially the ruling parties will face different spending rules to any challengers and will effectively have a ‘legalised advantage’. The Government is criticized for trying to rush through the legislation, and concludes that ‘the public deserve better’.

[political finance] NZ’s biggest election funding problem gets worse

The misuse of parliamentary funds by political parties is the biggest political finance problem in New Zealand. Yet the Government has just increased this funding by $1.7m and has decided to relax the rules on how the parties can misuse the money. It’s a shame therefore that most of the current debate on political finance focuses simply on the (draconian) Electoral Finance Bill, while this more serious issue of 'backdoor state funding of parties' is totally marginalized from the debate. [Read more below]

[political finance] Political finance and inequality in New Zealand

We live in a very unequal society, but are inequalities of political party funding a major influence on this? Moreover, does ‘money buy elections’? The answers to these questions have important implications for the state’s regulation of political activity. This blog post evaluates different sources of political party funding, its influence on New Zealand parliamentary politics, and cautions against taking for granted some of the common understandings of political finance in New Zealand. While business interests have been able to exert an incredibly strong influence over politics during the last 25 years, this leverage is better understood by a structural analysis of economic power than by arguments about the direct influence of the wealthy over political parties. The political power of wealth does not exert itself effectively via the direct purchase of political influence in the party system, but by the structural role of business in the national economy. To the extent that money is directly important in the party system, it is actually backdoor parliamentary state funding that is having the most influence on political configurations. [Read more below]

[political finance] Horse-trading electoral reform nearly complete

The public is finally about to get to see what party finance reforms are to implemented by Labour as a result of its horse-trading with the Greens, NZ First, and United Future. The Government has continued its backroom dealings - against popular and political opposition - to try and sew up a majority in order to push through changes to electoral rules that will advantage the Labour Party and disadvantage its opposition.

Newsroom reports that the smaller parties have been brought off with concessions relating to the process of allocating election broadcast funding. Unsurprisingly, the minor parties have never been happy that the Electoral Commision coopts National and Labour representatives into the decision-making process when it divides up the cash for parties at election time. This is of course incredibly unfair and undemocratic. But it's not the only unfair and undemocratic part of the process - the funds are divided up in a very inequitable way that rewards the big parties and reinforces the status quo. So even if the membership of Commission changes, it'd be interesting to see if the minor parties are willing to go along with the generally unjust method they use. They minor parties have certainly been willing to go along with Labour's generally very poor approach to this highly important area, so I don't have much hope for them showing much independence or principle on the bigger issues.

[political finance] Freakonomics: money does not buy elections

The bestselling economics book, Freakonomics by Steven Levitt and Stephen Dubner has a section on the quickly diminishing marginal returns of election campaign spending. In this, they disprove the widely-held truism that 'money buys elections'. First they admit that there is a correlation between money and politics: those candidates or parties that spend the most often win. But they dispute the commonly held assumption that the spending causes the win. Instead they point out that anticipated win - or possible win - will often attract the campaign money. When candidates obtain large amounts of money it is usually because they are seen to be the best candidate or the one mostly likely to win. Based on Levitt's study of campaign spending by the same candidates against the same competitors over decades of US congressional elections, it was found that 'the amount of money spent by the candidates hardly matters at all. A winning candidate can cut his spending in half and lose only 1% of the vote. Meanwhile, a losing candidate who doubles his spending can expect to shift the vote in his favor by only that same 1%'. The Freakonomics authors conclude that campaign spending has a very small impact on election outcomes, regardless of who does the spending.

Auckland - party finance reform public forum

The CTU is hosting another public forum on reforming party finance laws, this time in Auckland. See the details below. Essentially the CTU is playing the part of advocate for reform, and the invited speakers at the forum are therefore like-minded. It's good that this type of public debate is being promoted. But I also think that the CTU et al need to be challenged in these forums about some of the reform ideas that they're being associated with. And the way that the debate is being formulated by the CTU as Us Vs Them is a false one based around a strange idea that political parties like Labour represent ordinary New Zealanders Vs National which represents the corporates.
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The Hollow Men: Our Democracy or Theirs?  Auckland Forum: May 1 2007
Is our democracy “rule by the people” or rule by the corporate funders?  How do we restore integrity and transparency to election campaign funding? What needs to change so ordinary New Zealanders feel they have an equal say in our political system? Speakers include Nicky Hager, journalist and author of 'The Hollow Men', Dr Raymond Miller, Head of Department, Political Studies, University of Auckland and Laila Harré, union leader and commentator.  There will plenty of time for questions and comment.
Tuesday May 1 2007, 7.30pm
University of Auckland, Lower Lecture Theatre, City Campus, Princes St
visit http://union.org.nz/event/hollowmenMay07

[political finance] Myth 16: NZ parties are controlled by their members

The significant expenditure involved in New Zealand politics is strongly related to the professionalisation of the parliamentary parties. The employees of the parties in Parliament now have significant influence over the parties – many of whom are not even party members of activists. Arguably these state funded professionals have much more influence than any party donors – and certainly more influence than party members and activists. This blog post argues that instead of worrying about growing expenditure on billboards, pamphlets, and advertising, those seeking a stronger democracy and political parties should be concerned about the professionalisation of the NZ party system. [Read much more below]

[political finance] Myth 15: Prohibitions on broadcast advertising levels the electoral playing field

In New Zealand, the state strongly regulates broadcast advertising by political parties, with both registered and unregistered parties being prohibited from purchasing any advertising on television and radio at election time, apart from that which is allocated to them by the Electoral Commission. Officially, the broadcast advertising ban is intended to inhibit parties from ‘buying’ electoral success, but in practice it advantages the larger parties who receive substantially more public funding for broadcast advertising than the smaller parties. [Read more below]

[political finance] Myth 14: State funding promotes democracy and strong parties

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]

[political finance] Myth 13: Parties are prevented from using parliamentary resources for electioneering

Politicians often say that their political parties are prevented from misusing parliamentary resources by the existence of the Parliamentary Service monitoring taxpayer funds. However the rules are actually incredibly and deliberately loose and vague. This is because the Parliamentary Service is controlled by the same parties that it supposedly monitors. The true role of the Parliamentary service is ‘corruption management’ in assisting parties make use of 'backdoor state funding'. This is, quite simply, a case of ‘poacher as gamekeeper’. [Read more below]

[political finance] Myth 12: Parliamentary resources are not used for organising the parties

Not only are parliamentary resources used for electioneering purposes, but they are also used to help run the parties’ extra-parliamentary organisations. In order to take advantage of the many lucrative forms of state resources available, the functions of the party organisation or their national offices are now increasingly carried out both in Parliament and MP electorate offices. [Read more below]

[political finance] Myth 11: Parliamentary resources are not routinely used for party political purposes

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]

[political finance] Listener editorial: 'the best government taxpayers’ money can buy'

The Listener's latest editorial on party finance reform - Cheque, mate? - displays a great deal of common sense. It sensibly discusses the three main areas of contention: third party campaigning, state funding, and the process of reform. [Read  more below]

[political finance] Myth 10: NZ parties are not state funded

It is not commonly realised that the most important source of resources for political parties is now the state. The vast bulk of the resources provided to political parties come via the backdoor of parliamentary funding. MPs receive resources intended to permit them to carry out their legislative duties and serve their constituents – activities such as research, paying for office expenses, consultation with the public and so forth – but much of this is used for partisan political purposes, electioneering, and organising their parties. This blog post details the considerable resources that the parliamentary parties receive from the state (not including direct state funding in the form of Electoral Commission money, which will be discussed  in . Additional posts will show that these resources are not simply used for parliamentary functions, but are in fact strongly utilized for party political activity. [Read much more below]

[political finance] Myth 9: Regulating political activity is effective

One of the biggest myths about party finance reform is the idea that regulating party activity actually works. Instead, however, the interventions of the state into party affairs are very prone to failure. This is because it is in the interests of at least some parties to evade the rules, and they inevitably find legal means to do so. According to electoral law expert, Michael Pinto-Duschinsky, ‘In country after country, the introduction of new regulations has been followed by the development of new loopholes and new methods of financing politics that escape existing rules’ (Pinto-Duschinsky, 1998).  So in order to evaluate the appropriateness of further state regulations it is important to ascertain their effectiveness of such rules in achieving their stated objectives. The problem is that state intervention becomes a ridiculous chase to plug up the inevitable loopholes that arise from every rule the state introduces [Read more below]

[political finance] Myth 8: The Labour Party is dependent on union money

Despite rhetoric and out-dated tales to the contrary, the Labour Party obtains only very limited funding from the few trade unions still affiliated to it. Therefore when the then general secretary of the Labour Party, Rob Allen, was asked in 1999, about the degree of dependence the party has on union funding, he replied that the party was ‘Virtually not dependent at all. The income from unions is a very tiny, tiny proportion of funds – almost insignificant’ (Allen, 1999). The bigger picture is that there has been a reduction in the traditional class pattern of donor-party relations: the Labour Party is no longer reliant on trade unions and party members for its financial resources, just as the National Party no longer has a near-monopoly on business funding. Obviously there has been an increasing homogeneity of party finance that few commentators acknowledge. [Read more below]

[political finance] Myth 7: Huge amounts of money are spent by political parties

The money spent by New Zealand political parties is often remarked upon as being increasingly extravagant. Although it is true that financial resources are becoming increasingly central to the functioning of NZ political parties, it also needs to be noted that the amounts are still relatively low in New Zealand. For example, despite the centrality of advertising and its ever-increasing employment, political parties still spend fairly small amounts of money on advertisements relative to their commercial counterparts. Disregarding money donated to the parties’ election campaign funds, the overall picture is that the main two parties have routine incomes of about $2m, while most of the smaller parties have something less than half or a quarter of this amount. Those figures cannot be considered high. For instance, with a budget of about $2.5m, the Labour Party probably spends about the same as a small primary school. In comparison, the three main German parties have incomes of about NZ$240m, NZ$210m and NZ$40m even without counting state funding (Linton, 1994: p.22). [Read more below]

[political finance] Myth 6: Greater party finance means more votes

After I blogged last week that Money is no guarantee of political success, Kiwiblog then also carried out some analysis of Spending and Votes. I'm hoping to do some some further analysis of the correlation between votes and party expenditure in New Zealand, but in the meantime, here's some previous analysis I carried out on this subject. [Read more below]

[political finance] Myth 5: Academic studies show money makes a big difference in politics

Is money really as essential to New Zealand politics as is commonly assumed? Proponents of reform often speak as if there is credible evidence to show that money has a huge impact on the outcome of elections. There appears to be very little evidence in the party literature to show that the greater expenditures of money produces greater electoral success. The effectiveness of advertising for political parties is especially questionable. [Read more below]

[political finance] Myth 4: Poor parties like the Alliance cannot succeed in politics

Proponents of state funding for political parties and the regulation of parties claim that a level playing field needs to be created so that poor parties are not disadvantaged. They assume that the more money a party has, the more likely it is to succeed in politics. The story of the Alliance suggests that such a correlation is incorrect. The Alliance's rise and fall suggests that if any correlations exist between money and politics, it is actually this: the more wealthy a party becomes - the less political success it obtains! This is because the Alliance was most successful when it had virtually no financial resources, and quickly declined as an electoral force in proportion to its gain of significant funding. [Read more below]

Myth 3: Corporate parties like Act can buy their way into power

Since the introduction of MMP there has only been one new party to enter Parliament - the Act party. Every other minor party established has been established by an existing parliamentarian. No doubt Act's success was aided by its possession of huge amounts of financial resources. But its election to Parliament probably had more to do with the simple fact that its political programme represented the ideological outlook and economic interests of a small but significant minority of voters. Act's steady electoral decline since 1996, however, actually indicates that money can't buy power. The story of Act shows that a well-funded corporate party can spend as much money as it likes, but if the tide is going out on your brand of discredited politics, money can't save you. [Read more below]

[political finance] Myth 2: Corporate funding doesn't go to the Labour Party

Whenever business donations to political parties are discussed in the current debate about party finance reform, it is assumed that these donations generally only go to parties such as National and Act. It seems that few people are aware that Labour obtains a very large proportion of business donations. In fact in recent years, the Labour Party has been the most well resourced party in New Zealand. [Read much more below]

[political finance] Myth 1: Enormous business donations in NZ politics

In the debate about reforming the system of party finance in New Zealand, there is often an assumption made that business is a significant actor in party politics or that some political parties are surviving only on the largesse of such corporations. In some ways this was once the case in NZ politics, but it's decreasingly the case. This posting argues that business intervention in politics is not as significant as the proponents of reform suggest. Certainly, National and Labour have both reported less interest from big business in making donations. [Read much more below]

[political finance] Debunking myths about political finance in NZ

I am about to start a series of blog postings on liberation based around the current party finance reform debate in New Zealand. These will take the form of examining Party Finance Myths  in which I want to debunk some myths about party finance and introduce or promote into the debate some little known or discussed issues relating to party finance in NZ. The postings will very much be ‘works in progress’, as I’ll continue to alter those postings with further information as it comes to my attention. Much of the information for these postings will come from my 2003 PhD thesis Political Parties in New Zealand: A Study of Ideological and Organisational Transformation. Some of the information is therefore a bit out of date, but I hope to update the facts and arguments over the following weeks and months.

[political finance] Money is no guarantee for political success

Party finance law reform - such as that currently proposed in New Zealand - is normally based upon the idea that the influence of money in politics can be used to 'buy elections'. But the fact is that there is very mixed evidence on the usefulness of money in elections. In this regard, the Economist has commented this week on the fact that the 2008 US presidential primary is shaping up to be easily the most expensive in history, by suggesting that how much money matters is not exactly clear:

Money is not a guarantee of success nor is lack of it a guarantee of failure. Phil Gramm and Steve Forbes have both proved that truckloads of money do not necessarily translate into political momentum. And Bill Clinton proved that you can win the presidency without being the big money candidate. Howard Dean has gone one better and proved both that you can succeed without money and fail with it. He came from nowhere to dominate the money primary in 2004. But his $40m treasure chest did not prevent him from imploding during the Iowa primaries.

And just in case you think this view is just the rantings of the rightwing Economist magazine, note the recent Guardian article entitled Money isn't everything by Ben Whitford, who argues that although the configurations of money in politics (and the US primaries in particular) can tell us a lot, ultimately 'there's more to the money primary than just the bottom line'. He says:

Money tells us a few specific things about candidates: how effective a political machine they can assemble, what kind of popular support they have, whether they're capable of mounting a serious campaign. But at the end of the day, despite the hype, elections come down to votes: it doesn't matter how rich a candidate is if they don't have the charisma and broad political appeal to back it up.

Hillary Clinton's staggering US$36m in the 'money primary'

Hillary Clinton is proving to be the favourite presidential nominee of American millionaire and billionaires. She has just announced that her fundraising in the first quarter of 2007 has netted her US$26m to add to her existed $10m in campaign funds. This figure easily breaks all previous records - it's three times the previous record for any Democrat or Republican politician. Republican contenders have the following amounts: Mitt Romney $20m, Rudy Giuliani $15m, and John McCain $13m. A WSWS article says all these enormous figures 'are an expression of the hammerlock which wealthy corporate interests enjoy over the US two-party political system'.

[political finance] The public debate on reforming party finance rules begins

A new coalition has formed to push for tough party finance law reform. It's taken on the name of a group formed in 1979: the Coalition for Open Government (COG). Their formation is to be welcomed, even if their initial key policies if enacted would possibly lead to less open government and an even less politically diverse party system. [Read more below]

[political finance] Electoral Law horse trading and cartel building

Although the public know little about it, the Labour Party is doing the classic horse-trading over substantial amendments to the Electoral Act that the Government is about to introduce to Parliament. The changes, which could be passed under urgency to avoid widespread public debate, will award all the parties with legislation that suits their political interests. Essentially Labour is quietly building up a cartel of parties to support its moves, which are likely to involve significantly increased state funding for the parties, limits on donations to parties, and restrictions on third party political campaigning.

At the moment Labour is building up a majority - or 'cartel' - in the House by negotiating with NZ First, United Future, the Progressives and the Greens. They have left out the Maori Party, Act and National, who are feeling aggrieved, as the usual process for electoral alterations is to seek a broader cartel of parties so that they would all agree on the benefits. It is highly significant - and unusual - that none of the parties in the new cartel have been willing to talk to the media about the upcoming legislation and negotiations.

The behind-the-scene horse trading is likely to involve Labour buying off the small parties by considering changes to the allocation process for election advertising. The Electoral Commission currently includes Labour and National representatives in deciding how to dole out the cash, and it normally leads to highly contentious divisions of the state funding.  Meanwhile, the Auditor-General Kevin Brady has said he expects a sweeping review of parliamentary state funding. I imagine this is unlikely to happen, and if it does it will be merely be done in way to ensure that more funding rather than less is made available to the parties in Parliament.

[political finance] The farce of democracy on the Representation Commission

If you want an example of how electoral law and regulations are normally the result of party political self-interest (rather than fairness or democracy), look no further than how Labour and National continue the farce whereby they take seats on electoral agencies such as the Representation Commission - see this press release from Electoral Commission. After each census, this body meets to review and alter the electorate boundaries. National and Labour have made the rules such as that no other party is on the Commission. [Read more below]

[political finance] Party finance reform in the UK - more of the same

Party politics in the UK is about to undergo a 'radical overhaul' of its system of party finance, but the mechanisms used will be just 'more of the same'. These reforms could have significant influence on the NZ system, which in parallel shares many of the problems and weaknesses of the UK system and is also facing imminent reform. Some analysis of the proposed UK reforms is therefore of some importance to NZ - and shows that, as usual, reform is being directed in a way that will once again simply favour party hierarchies and make party politics even more divorced from civil society. [READ MORE BELOW]