What a (revealing) travesty

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.

justice donationsThis 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.

25 thoughts on “What a (revealing) travesty

  1. I’m with Prof Brady in that it puts parties and candidates and their overseas backers on notice. Surely urgency was by Little to give the SC a kick up the backside. The shenanigans on the considerations of foreign interference being deliberate delay tactics, I assume – although perhaps they are just plain old dysfunctional. Also, I think the bill does something to limit the opportunity for false statements in election related adverts. Another area where something is better than nothing. What I haven’t read anywhere is what the penalties for infringements under the provisions of the Bill/Act are (if any!).

    And I’d far rather that no donations could be used for election campaign purposes (say in the 8 months leading up to an election) – thus making our election campaigns fully publicly funded. Fully transparent, far more accountability and there would be a greater need to convince the electorate based on policy, as opposed to purchase of the highest paid ad agency.

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    • I presume the penalties are just the same as under the existing Electoral Act (given that in effect the bill just reduces the threshold from $1500 to $50).

      I”m much more sceptical of the merits of public funding.

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      • I’m also sceptical of public funding of political parties, since often such models are designed by incumbents to benefit and protect the status quo ante – their powerful position.

        I do however have some attraction for the voucher option my colleague Max Rashbrooke has proposed. If every enrolled voter was given (say) a voucher of say $10 per election to give to any registered political party of their choice, we could eliminate much money in politics, barring a standard and disclosed party membership fee, no anonymity of donations over a low threshold (say $200 per year) and a low cap of (say) $1000 per year maximum donation.

        Donations could also be defined to include the gross purchase price of any service from a political party, including a ticket to dine with, or a painting by, the PM.

        I also agree that only resident and citizen individuals, not institutions – corporates, trusts, trade unions, NGOs, whatever – should have the right to donate, as only they have the right to vote.

        Vouchers would cost us about $10 million per year, which is not much, and would be a small price to pay to eliminate many of the more egregious forms of money in our politics.

        Liked by 1 person

      • THanks Simon. I’ve long been tantalised by the voucher idea – akin to N European church taxes (where you opt for the church you pay it to) – but haven’t looked into Max’s plan closely to know how it would work in detail. I suppose my unease is still about how it would treat new movements/parties, esp if (say) the individual voucher allocation decision was made near the middle of an electoral term (as you might want to provide some planning certainty for existing parties). I’ve not been uneasy with Bob Jones, Gareth Morgan or Kim Dotcom throwing lots of personal money at a new party – part of the process of seeing if you can get traction and acquire a significant base level of public support.

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      • Citizens only
        Forget the non-citizen residents
        Too many transients (international students) (fruit pickers)
        Too many passport-shoppers who leave the minute they get citizenship

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      • of course the transitories would generally not be eligible for the electoral role and thus would be unable to donate.

        That said, I would favour a citizen-only franchise (it featured elsewhere in my submission).

        Liked by 1 person

      • There is currently 3 classes of NZ citizens.

        The Maori NZ citizen who have access to the Treaty of Waitangi annual $400 million in race based social welfare.

        The NZ citizen who can bring parents to NZ.

        The NZ citizen who can’t bring parents to NZ.

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  2. Yours is the only commentary on this I’ve seen that actually looked at the RIA, cited it, and revealed the extent of the ‘problem’ this will fix. I’m appalled at the waste of Parliamentary time and the cynical acceptance of it by both major parties. He may be a stuffed shirt, but at least David Seymour has the courage to act on his convictions (no pun intended).

    Assuming a 40 hour working week for MPs and a mean salary of $180k, each hour of Parliament’s time is worth $10,380. Six hours of Parliament’s time to pass this Bill will cost the taxpayer $62k, to prevent up to $5400 in donations per year.

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    • What a waste of time effort to distract the public that the Labour/NZFirst/Greens government is one of the most corrupt governments we have ever had. All China has to do is slow down our primary products at the Chinese border and our Maori Iwi and Maori MPs will bend a knee and beg with almost all of their $60 billion of assets invested in primary industries. No need for Chinese interference with monetary donations.

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      • This Labour government is wholly dependent on the 7 Maori electoral seats who represent Maori Iwi whose $60 billion assets is dependent on the 1.5 billion Chinese consumer market. Chinese consumption of milk, lamb, beef, wine, fish and other primary produce and Chinese tourists on a increasing scale with a FTA gift from China means that billions of dollars of donations already occur each and everyday that interfere with our political independence. Who is worried about a few thousand dollars in party donations?

        Liked by 1 person

  3. My gosh. Just listened to Simon Bridges’ interview on Morning Report. The will to power is strong in that man. Principles apparently not so much. It really is tragic to observe him being at best so cavalier, and at worst so cynical, about issues going to the heart of the public’s long-run trust in our systems of government. He does us all, not least his own supporters, a disservice. And brings his party low.

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    • $50 threshold for compliance is really a joke. I fell out of my chair laughing. In accounting we class that amount as rounding errors.

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  4. This bill is worse than nothing. Among other things it is a cynical attempt to divert attention from New Zealand First’s woes. All it does is reduce the ceiling on foreign donations from $1500 to $50. So what? It does nothing to address the far larger donations made through New Zealand registered companies. Political donations should be restricted to New Zealand citizens as should the right to vote. But neither major party will go along with that because they both do well out of the current system which has allowed large amounts of Chinese Communist Party funding into New Zealand. This bill is a fraud and those responsible are utterly shameless.

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  5. …but don’t ban foreign (resident and permanent resident) voters… NEVER do that… because then foreign spies might not be elected to “our” parliament… It’s a joke… it’s going to end VERY badly indeed, but saying “told you so” will not be particularly satisfying in the middle of the Second No Zealand Wars…

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  6. I was surprised to see Prof Anne-Marie Brady’s comment too. This law is nothing more than a smokescreen, designed to be added to Ardern’s quick-fire “what we have achieved” social media spiel for use in election campaigning next year.
    To my chagrin (but hardly surprise) even RNZ reported the proposed law change as: “The government will be banning foreign donations to political parties and candidates” when it does nothing approaching that.
    Not least, it won’t prevent foreigners donating as much as they like to setups such as the NZ First Foundation or to National’s equivalent.
    I am beginning to think this govt has a deep strain of cynicism camouflaged by Ardern’s “butter wouldn’t melt in her mouth” image.

    Liked by 3 people

  7. One real problem is the way the powers that be control what is discussed and how. I have followed important issues and seen them buried at RNZ. In the US they have congressional enquiries where congressmen ask searching questions. I’ll bet Michael could come up with a lot of questions for the politicians to be grilled on?

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    • IRD operates “payday” filing for 2,000,000 employees, every week, right on time

      Shouldn’t be too difficult to publish the details of all donations above $50 within 2 days

      Liked by 1 person

      • IRD? More like 2 million employers having 1 or more staff processing payday filing every week right on time under threat of penalties for late filing.

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  8. Check out the party donations for 2018. Not an election year. National have received 7 donations over $15000 from 4 donors totalling $95,000. The party has received $646,000 of donations under $15000. What is not shown is how many of the $646k were for $14,999

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  9. […] And finally, we have the welcome news that New Zealand has revised its laws on donations to political parties with the effect of limiting foreign donations to no more than NZ$50. But the changes may amount to less than meets the eye. The new legislation reportedly does nothing to limit party donations from foreign business entities domiciled in New Zealand, or money channelled through New Zealand citizens. Redoubtable Kiwi blogger Michael Reddell says: […]

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