Catalyst Trust event in Queenstown
July 22 2019 by Max Rashbrooke
If I were in charge of the country for a day, do you know what would be top of my to-do list? Banning massive donations to political parties.
Liberal democracies like New Zealand are, for all their flaws, the best method yet invented for running a country. But they have at least one major weak point, one gap in their protective fence: they can allow very large, and unjustified, levels of economic inequality. We see this in New Zealand, where the wealthiest 1% – that’s around 35,000 adults – own one-fifth of all the country’s assets, while the poorest half of the country have just 2%.
This is a major weak spot for a democracy because, in crude terms, politics is costly. People running political campaigns have to pay for advertising, leaflets, party salaries, travel, and all kinds of other overheads. They need funders. Those who can provide them with funds – typically, wealthy donors – can thus exert significant influence.
We can all recall examples of this. Think about the National MP Maurice Williamson having to resign as a minister after he intervened with police in favour of billionaire donor Donghua Liu. Both political parties openly sell access to politicians for wealthy donors through their Cabinet Club and Presidents Club. The authorities are also investigating claims by the now-independent MP Jamie-Lee Ross that donations can help candidates gain a higher position on National’s list.
Some people would say there isn’t a lot of money in New Zealand politics, compared to what you see in other countries. But that’s irrelevant. The only question is: are the sums given significant in the context of our politics? And they certainly are. In the run-up to the 2014 election, for instance, large donations over $30,000 totalled $12 million to the various political parties – enough to fund all the parties’ advertising campaigns, which came to around $9 million. The sums given are large enough to affect our politics.
And beyond whatever individual favours are done, donations create a more pernicious issue: the interests of political parties become biased not in favour of a specific wealthy donor but in favour of wealthy households in general. Our whole politics becomes subtly reoriented toward the interests of a few.
One solution to this problem, of course, would be to significantly reduce inequalities of income and wealth, so that everyone had a relatively equal chance of giving to a political party and influence was equalised. We should certainly aim to do that. But reducing inequality is a slow, often decades-long process, and we need quicker action.
I think we should take our lead from Canada, which for some years now has barred people from giving more than $1500 a year to any political party. People’s freedom to modestly support their preferred party is preserved, but outsize influence is curbed.
If we did this here, political parties would rapidly run short of money. But there are ways to fill that gap. In the middle of each election cycle, for instance, we could give every voter a $20 ‘democracy voucher’, to give to the party of their choice. That would profoundly equalise influence over politics, and encourage parties to put forward policies benefiting everyone, not just a few. And it would repair a major gap in the fence that we put up around politics to protect it from lopsided influence.
Max Rashbrooke will speak at a Catalyst Trust event in Queenstown on Monday, July 29, at the Hilton Hotel’s Coronet room, 6 – 7:30 PM. The author, journalist and academic focuses on inequality and democracy in NZ and will set out challenges and potential solutions to both. More information and registration details on www.catalystnz.org and our catalystnzQT Facebook page.