Three ways to reduce the influence of big donors on politics

I did a blog post a few weeks ago about the donations the Road Transport Trust (essentially, the lobby group for the trucking industry) made to political parties and candidates in the 2011 election campaign.

I said that I wasn’t too concerned about these donations because, in general, most political parties and candidates in New Zealand are simply not in the business of selling policy for money. I also said that high donors probably don’t exercise a worrying level of influence over our politicians.

A string of scandals

Since then, I must confess, there’s been a disturbing string of stories about high donors to political parties allegedly receiving favors and/or access to MPs and/or promises of influence over policy in exchange for money.

First, there was Kim Dotcom and John Banks promising to be his “very good friend”. Then there were the various unanswered questions over why Shane Jones granted William Yan citizenship.

Finally,  Louis Crimp’s massive donations to the ACT party and reports of his recent conversation with John Banks (presumably not something Banks has time for with all his constituents) painted a disturbing picture of the influence wealthy NZers may have over our politicians and politics.

Perhaps those donations from the Road Transport Forum are more sinister than I thought? Certainly, these scandals generally contribute to a perception that all politicians are the same – corrupt and venal.

I still don’t think this is the case but I do think New Zealand’s electoral system might be driving us in a direction where very wealthy individuals and companies will have more influence over our politics than we like.

Why? Well, because we are asking (or, to look at it another way, allowing) our political parties to raise a great deal of money to spend on election campaigns in a relatively short period of time.

In the last election Labour and its candidates spent $3.6 million. Of that $1.2 million was their public broadcasting allocation but they must still have raised $2.5 million.

National spent over $4.4 million, so minus the broadcasting allocation they raised $3.25 million.

Two other political parties, the Green Party and the Conservatives, spent over $1 million each.

These are not insignificant sums of money, and they would not be easy to raise for any party, particularly if you received almost no funding from high donors.

The quickest way to raise a million dollars is not to get 10,000 donors to give you $100 each – instead it’s to get 100 donors to give you $10,000 each. Of course, personally, I don’t know 100 people who would give me $10,000 but some political parties obviously do…

It’s not acceptable and it’s not excusable for politicians or political parties to make cozy deals with high donors in which they offer them more access to senior MPs or even explicitly promise to introduce policies that benefit them. But it is, perhaps, understandable why they do it under the current system.

Clearly, the growing influence of wealthy individuals and donors in NZ politics is a bad thing if you care about democracy. It’s also a bad thing if you are interested in promoting sustainable transport options because, sadly, there are not so many incredibly wealthy cyclists or public transport companies out there.

In terms of fixing this situation, obviously tighter rules around disclosure of donations would help, but there are three other things I can think of that might help.

1) Lower the threshold for electoral spending

Right now the threshold for electoral spending is higher than ever before. The electoral spending limits for National and Labour in the last election were over $5 million each.

Personally, I see no reason why the threshold needs to be this high. I agree that, yes, political parties do need a certain budget to communicate their policies effectively to the public in election year.

But $5 million? You could virtually cover the country in leaflets, letters, billboards, and advertisments.

I also don’t see that this massive advertising spend adds to New Zealand’s democracy. It certainly doesn’t seem to have inspired New Zealanders to engage with politics in 2011. In fact, we had the lowest election turn out in the last 100 years.

2. Bulk fund political parties.

It is the norm in many countries (including Australia and many countries in Europe) that political parties are funded for a significant proportion of their election costs from the state.

Obviously, New Zealand has this in terms of the allocation for public broadcasting but this is much lower (as a proportion of total electoral expenses) than what you might find in many other countries and it is limited to this one purpose.

This option is not very likely to be popular with the public: People don’t like the idea of giving politicians or political parties more money. But as Andrew Geddis puts it (PDF):

“Simply put, if the New Zealand public wants to avoid its political parties being dependent upon a few large-scale donors to fund their activities, or even skirting the legal rules in order to obtain the money they need to operate, then it will need to provide the necessary funding through general tax revenue.”

I don’t know if that’s entirely fair – some political parties do still fundraise in a principled way, but there’s certainly an element of truth in it.

3. Extend the Parliamentary term to 4 years

Elections are by far the biggest cost that political parties accrue. A four year term would mean parties would incur the major expense of an election much less often. It would also give them more time in between to raise the funds to pay for it.

I actually think a four year term would be good for a lot of other reasons as well, for example, meaning politicians and political parties would put more energy into governing and less into electioneering.

What do you think? Are you concerned about corruption? Do you think the donations National and Labour and their candidates received from the Road Transport Trust might influence their policies? What do you think the solutions are?