Late yesterday morning, the government announced that it was going to ram through all its stages under urgency, the Electoral Amendment Bill (No. 2). By the time you are reading this, the bill may already have been passed into law.
The goal of the legislation appears to be to suggest, at least to those who don’t follow politics closely, that the government is “doing something”. The Minister’s press release announcing the bill is headed “Government to ban foreign donations”, but in fact it does nothing of the sort.
The Explanatory Note on the bill is more honest, that the law is more about signal than substance
The Bill makes several changes to the Electoral Act 1993 to send a clear signal that only those who are part of New Zealand’s democracy, and who live in, or have a strong connection to, this country, should participate in our electoral system.
But although the heading of very next section sound promising, again the substance outs
Ban on donations from overseas persons
The Bill amends the Electoral Act 1993 to restrict donations from overseas persons to political parties and candidates, to reduce the risk of foreign money influencing the election process.
The changes are being applied only to parliamentary elections, not local elections.
The Bill bans candidates and parties from accepting donations over $50 from an overseas person in any form.
The definition of an overseas person in the Electoral Act 1993 is not being changed. The ban applies to donations from—
- an individual who resides outside New Zealand and is neither a New Zealand citizen nor registered as an elector:
a body corporate incorporated outside of New Zealand:
an unincorporated body that has its head office or principal place of business outside New Zealand.
So if there is any (serious) signal at all, it is that local body elections don’t matter (there are no still restrictions at all on foreign donations to local body campaigns, even though we know that, for example, prominent candidates in Auckland have been associating closely with PRC United Front individuals/entities, or that – for example – Southland mayor Gary Tong was being courted by close regime-affiliate Yikun Zhang).
The other “signals” are rather more implied:
- first, since the foreign donations limit is being lowered from $1500 to $50, but the anonymous donations limit is being left at $1500, any foreigner who really wants to make a $500 donation should just do so anonymously. This was an issue the Ministry of Justice highlighted in its (not very good) RIS, but the government chose not to act on, and
- second, none of this intended to be serious at all, just theatre.
How do I justify that second point? Well, check out this table from the RIS.
This just isn’t where the (foreign) money is. All “foreign donations” – as the law is drawn at present, and will be when the bill is passed – averaged just under $5400 per annum across almost all our political parties. Those are derisory sums of money, rightly tightly limited. The new law will, almost certainly, reduce the derisory sums under this heading to almost zero.
So where is the foreign money? First, and we know this from political party returns – they aren’t really hiding it, even if they won’t engage on it – is donations from foreign-controlled companies operating in New Zealand. There have been two particularly prominent examples highlighted in recent years: donations to the National Party from Inner Mongolian Horse, and one from another Chinese billionaire’s company that was facilitated by Todd McClay and Jami-Lee Ross (the latter told us again all about the transaction in his Second Reading speech last night). It isn’t a new discovery that this avenue is open. Some call it a “loophole”, but it looks a lot more like a design feature – ie even if not envisaged when the law was originally drafted, all parties in Parliament have been content to leave the definition of “overseas person” unchanged, in full knowledge of how the provision was being used.
That would have been easy to fix, if the government had been interested in doing so. It clearly wasn’t. It is where a lot of money has been in the past, and if they argue things need to change before next year’s election, this is what they could – quite readily- have changed.
And the second, of course, much harder to deal with: funds donated by people who are now New Zealand citizens, but who have close associations with foreign regimes, notably the heinous CCP regime in the PRC. I’ve seen people talk about the risk of foreign regimes directly channelling funds to such individuals and them passing the money on under their own (New Zealand citizen) name. Perhaps, but things don’t need to be that direct to be highly troubling. Reciprocity is a real thing, whether or not anything is ever written down. I’m not sure what the law can do about this particular risk, but political parties can. Political parties can choose to do the right thing, and declare – and take seriously – a determination not to take money from, or solicit it from, people – even registered electors – who are known to have close associations with foreign regimes, perhaps especially with such troubling regimes as the PRC (or the Soviet Union in days gone by, for example). But there is no sign of such a willingness to commit, to self-restrain, from any of the parties in Parliament. None.
Thus, I heard National MP Nicola Willis give a decent speech last night in the second reading debate, that seemed to suggest she thought there were real issues and problems that needed addressing. But there was no sign from her – or any of her colleagues – that they were willing to commit to a different model of behaviour. Nothing from the Prime Minister either, even though she has previously been critical of some of donations that have flowed to National. She’s the Prime Minister. She could legislate, she could set an example. Instead, we just have political theatre, while avoiding the real issues.
(The Opposition leader, of course, is quite as bad here – albeit out of office. Listen to his trainwreck interview with Kim Hill on Morning Report this morning, where he tries to avoid even acknowledging any sort of serious issue.)
And then, of course, there is the process – ramming this law through under urgency, with no select committee submissions, hearings, or deliberation. Things weren’t even done quite that badly with the gun control legislation earlier in the year. Hardly any law should ever be passed that way, and certainly no electoral laws. But what is also remarkable is that looking through the Minister’s press release, the Explanatory Note, the RIS, and Hansard records of the debate last night, I could see no substantive justification from anyone on the government side for this extreme urgency. The bill won’t even come into effect until 1 January – so they could readily have had even a week at a Select Committee, a week for people to think through the details carefully. It is a travesty of a process.
There have been various attempts to suggest that the problem here was really the Justice select committee, which has been dragging its feet on reporting back on its inquiry into foreign interference. If only they’d reported, it is suggested, such a rushed and limited bill might not have been necessary.
But that sort of story doesn’t stack up at all. First, even though the Committee is split equally between government and Opposition members, Labour provides the chair, and a good chair would be able to facilitate the process, and build coalitions. In fact, we are now (so it is reported) onto the sixth chair for this particular inquiry, and many of the members now on the Committee weren’t members when much of the evidence was heard. And it is only nine months or so since Labour was backing their chair (Raymond Huo) in his stated desired to prevent any public submissions at all, quite content that government departments could provide all that was needed.
More importantly, the government is supposed to govern and to lead. All the issues around donations – including foreign donations – have been known for a long time now. And it is not as if the Justice Committee (with its endlessly rotating membership) has any specialist expertise on these issues, or access to policy and operational advice not open to the government itself. The government is far better equipped to act, if it wanted to. But it is chosen not to until now, and now it is just engaged in insubstantial trivia – grabbing a few headlines, but not changing anything. They could have had a bill in the House six months ago, with time for proper select committee consideration, outlawing donations (for central and local government campaigns) from anyone but registered New Zealand electors, and with full and near-immediate disclosure. But they consciously chose not to. And if, perchance, Labour wanted to act – seems unlikely – but didn’t think it could the numbers, it was a great opportunity for some Prime Ministerial leadership, to embarrass other parties into acting, and to set an example with the new and better limitations Labour would adopt for its own fundraising.
But we’ve had none of that. Either the Prime Minister wasn’t capable of such leadership or wasn’t interested in displaying it. Either should be a concern. She runs the government.
There was a few good speeches in the debates last night, but in the end only one member – ACT’s David Seymour – was actually willing to oppose this piece of theatre. Perhaps political parties were reluctant to be wedged – being seen to oppose a bill that (appears) to limit foreign influence – but I doubt that really explains much. It probably suits National quite as much as Labour – even allowing that they are serious about their process concerns around urgency – to be seen to have “something done”, even as nothing much substantive changes.
Outside political parties, I guess views can differ. I noticed Professor Anne-Marie Brady welcoming the bill (she was responding to my lament that Jami-Lee Ross had made a forceful speech about the bill avoiding all the real issues, yet voting for it)
I disagree with on that. It is probably worse than nothing because (a) the donations it will actually restrict are derisory in total value (see above), and (b) because it tries to fob off the public with a sense of “something being done”, even as the real issue are almost entirely avoided. The public typically has a limited attention span for such issues, and this will have people who’ve had only a half an ear to the issue nodding along with the “at last something is being done”). But the CCP, the PRC Embassy, those regime-affilated business people – resident here or abroad – will know that nothing real has been done at all. And in the entire parliamentary debate – that I’ve read or heard – the elephant in the room, the CCP/PRC, is not even mentioned. So at least one more election will pass with the ability to raise large amounts from PRC-affiliated sources will go on, even as the true character of the regime becomes more and more apparent. (Of course, any restrictions should apply to all foreign donations, but no serious observer supposes that the biggest issues at present are around the PRC).
Perhaps we will eventually see the Justice Committee’s report on foreign interference issues. Simon Bridges implied this morning that it won’t be much longer delayed, although suggesting that there are likely to be two different reports. But it seems highly unlikely we will be much further ahead. The Committee has no personnel or expertise or analysis not already open to the government – in fact, the RIS on today’s bill had the Ministry of Justice noting that they had paid attention to the submissions – and there is no figure of any real stature (no Andrew Hastie, for example, in the Australian context) on the Committee, let alone chairing it.
Bu then there are no figures of any real stature leading our politics. Today’s bill, today’s process, demonstrates that again.
My own submission to the select committee inquiry is here. That submission included
There are some specific legislative initiatives that would be desirable to help (at the margin) safeguard the integrity of our political system:
• All donations of cash or materials to parties or campaigns, whether central or local, should be disclosed in near real-time (within a couple of days of the donation),
• Only natural persons should be able to donate to election campaigns or parties,
• The only people able to donate should be those eligible to be on the relevant electoral roll,
However, I summarised
But useful as such changes might be, they would be of second or third order importance in dealing with the biggest “foreign interference” issue New Zealand currently faces – the subservience and deference to the interests and preferences of the People’s Republic of China, a regime whose values, interests, and practices and inimical to most New Zealanders. Legislation can’t fix that problem, which is one of attitudes, cast of minds, and priorities among members of Parliament and political parties. Unless you – members of Parliament and your party officials – choose to change, legislative reform is likely to be little more than a distraction, designed to suggest to the public that the issue is being taken seriously, while the elephant in the room is simply ignored. It is your choice.
Today’s legislation is just such a distraction.