Wednesday, 10 September 2008

money and politics

in the last paragraph of her post on the rt hon winston peters, anna states that she doesn't like the idea of political party presidents seeking six figure donations from millionaires. that's all well and good, but the question then arises as to where the money is supposed to come from. i can assure you that it's not possible to raise the kind of money required to mount a serious political campaign by holding cake stalls and selling raffle tickets.

the fact is that participation in political parties has been declining for years. parties on the left have more difficulty in raising funds because they tend not to have members of the business roundtable giving them large sums of money*. but they have to compete with parties on the right, who are awash with such funds. unions do provide some help, but unions don't have anywhere near the kind money that big business has.

the reason that the left has managed to win the last three elections is because they have been working smarter as well as delivering some damn good policies. but these parties still have to come with annual funds to pay for staff, to pay for the functioning of the party and to mount a campaign. a lot of the work within the party is carried out by volunteers, but you still need cash to buy the hoardings, print the leaflets and so on.

i know that significant effort is put into fundraising. i've been involved with the garage sales, the dinners, the art auctions, the membership drives. every team in every region works extremely hard to raise funds to run a decent campaign. but that is not enough to compete effectively.

of course high spending doesn't necessarily win elections. we witnessed that in the waikato earlier this year when ACT party president gary mallett's team was soundly defeated in the WEL energy trust elections. not only did his team spend large amounts on advertising, they were also offering the highest cash rebates to customers while scrapping community grants.

despite that example, we know that spending large amounts of money does make a difference. that's why we have spending caps for local body and national elections. for a national election, the caps are $20,000 per electorate and $10,000 per list candidate. on top of that is the allowance for the spend on the nationwide party campaign. and that cap is only for attributable spending, so it doesn't include, for example, the wages of a campaign manager**.

realistically, there is no other way to come up with these funds without seeking some large donations from those that have serious money. it's even more difficult when you're looking for donors who won't have strings attached, like for example the insurance industry wanting privatisation of ACC.

if we want to prevent large private donors influencing political parties, then we have to find another way to fund them. state-funding is the obvious answer. another possibility is to have corporate donations going into a central funds and being allocated to all parties. in any case, there's no point in criticising parties who are put in the position of having to solicit for funds, yet not advocating for an alternative source of funding.

one thing you can say about labour is that they were honest in disclosing the donations from mr glenn to the party at the time he made them in 2003 and 2004. none of the parties on the right have been made that kind of disclosure. labour is also open about the support received from unions. and they are the only party to publicly publish annual financial statements - copies of these are provided to journalists and all party members at annual conferences. i think it's high time that other parties were equally transparent.

*largely because parties on the left will not take on the privatisation and low-tax agenda favoured by the BRT. even national tries to avoid admitting that they favour such policies.
** not that i know of any candidates on the left who can afford paid campaign managers. i can't say the same for candidates on the right.


Cactus Kate said...

This is the largest load of nonsense ever written on this blog.

GO have a look at how much money the UNIONS fund political parties to the left of centre. The same UNIONS who support, give time off, train and actively promote workers to be MP'S for centre left parties. And suspend then sack anyone with centre right political leanings.

UNIONS are the largest breeding ground for LABOUR politicians.

BRT members are known to also donate to LABOUR.

Don't think any Union has ever donated money to centre eight parties in my knowledge.

Where do you think centre eight parties will get their money from if not from business and wealth people? All their members and supporters are too busy paying taxes to support left leaning bludgers to dip out the sort of money UNIONS do for the left.

Hugh said...

Stargazer, it seems to me that your post is based on the idea that donating capital to a political campaign is undesirable, but donating labour isn't.

Is there really a big difference in somebody donating enough money to pay for a campaign manager, and somebody donating their services as a campaign manager? Particularly considering that, in order to be in a position to donate their services even part-time, they have to be in a financial position that's better than the average kiwi?

In the 1950s and 1960s, when campaigns tended to rely more on the voluntary labour of party activists than money spent on advertising, National had a serious advantage which was partly due to the overall affluence of its supporters, and their consequent greater ability to devote their time to canvassing, door-knocking, maintaining lists of voters, taking people to polling booths, etc etc.

Kate, good to see you posting here. Just an aside on internet etiquette, capitalisation doesn't really reinforce your point.

Carol said...

I agree with stargazer in that the funding of political party/ies seems to be something that can undermine democracy.

It does seem to me that the parties which most strongly support big business are at an advantage here (ie parties on the right wing)> So therefore the funding supplied by unions to left parties seems to be a counter to this. How much money do unions have to donate to parties anyway? I'd like to see some figures, because I find it hard to imagine they have as much money to spare as wealthy corporate businessmen.

Also, this discussion does indicate there should be transparency in funding of political parties.

Money from Unions, in effect comes from a load of workers. And the workers usually have some choice in belonging to the union, providing them with money and supporting the unions support of political parties. In comparison money from businessmen looks to be more to get a government to work in the favour of a small number of wealthy individuals.

It looks to me that, even with the union providing funds, these funding arrangements benefit the corporates and parties that support policies that most benefit corporates.

And both Labour and National benefit from this arrangement more than some of the small parties. Hard for them to get in on the game and provide alternatives.

Carol said...

Oh, and from a feminist perspective, all the money swishing around seems to be more in the hands of men, especially a small amount of powerful men. So it doesn't look that democratic from a feminist perspective either.

Much more transparency needed here, and restrictions on campaign funding - too much spent on presenting images and propaganda, while less focus is given to clarifying policies and their implications for all sections of the electorate, including diverse demographic groups of women.

stargazer said...

hugh, the donation of labour that i've personally seen is mostly by people who hold day jobs and who do all their voluntary contribution in the evening and on weekends. the exception would be those who are retired, who do have a bit more time to spare. there may be the odd stay-at-home mum or dad, but don't tell me they don't have a full-time job already. so that doesn't make them wealthy at all. many campaign managers have to continue with their day jobs but will use annual leave during the campaign. as do candidates, who will use annual leave and unpaid leave to stand - yes, even when they work for a "UNION", kate.

kate, i'm sure unions would be willing to donate to centre "eight" (??) parties if such parties promoted policies like flexible working hours, compulsory meal breaks, annual increases in minimum wages, paid parental leave, 4 weeks annual leave, multi-employer collective agreements etc etc etc ie policies that benefitted employees and ensured fair working conditions and decent wages.

as for paying taxes, all employees pay taxes. it is the wealthy who are more able to arrange their affairs to minimise the amount of tax they have to pay. it's the wealthy that can afford to set up trusts and complicated financial arrangements, and shift money from here to there so that they pay much less than they would otherwise be required to. you don't find many cleaners, teachers, nurses etc able to do that. and i speak from experience because i'm a chartered accountant and that's what i see all day.

in fact, if all our self-employed people declared all of their income and paid taxes fairly on it, we could have had a top tax rate of 25% in this country. all of us employees are subsidising those business people who offer "GST discounts" by taking cash payments which they don't declare to the IRD.

and since when is belonging to a "UNION" any kind of bad thing. it's great that some labour politicians come from unions. they are able to bring the perspective of the working class to parliament and ensure that those with the least power in society actually get some decent representation.

homepaddock said...

"i'm sure unions would be willing to donate to centre "eight" (??) parties if such parties promoted policies that benefitted employees and ensured fair working conditions and decent wages."

Does that mean it's okay to buy policies you approve of?

David Farrar analysed dollars spent per vote over several elections and found that more money doesn't = more votes:

Hugh said...

The fact that people are working during periods of annual leave, or on weekends or after work, doesn't change the fact that it's easier to donate time when you're well off.

If you're poor, you're much more likely to work at a demanding job that leaves you physically or mentally exhausted and requires you to spend much more time recuperating, making volunteerism a much less attractive prospect. Similarly, if you have to spend a lot of time cooking for your family, you're less able to cook for a bake sale.

This obviously doesn't apply to everybody, but I'll emphasize this again - we already know what an electoral campaign driven primarily by volunteer labour looks like, since we had it throughout the 1950s and 1960s, and it unquestionably favours the right wing parties.

stargazer said...

home paddock, one issue is around transparency and openness. unions are open about the policies they advocate and the support they provide to which parties. affiliation is public. compare this to donors of cash or labour on the right - we have no idea who's donating how much, with what agenda attached.

secondly, unions will never be able to provide sufficient funds to run a nationwide campaign for a major political party. therefore, the parties they support will need to seek funding elsewhere. hence people like owen glenn.

but if you don't agree with unions supporting political parties, that's fine. put all parties on an equal footing by providing state funding. that way, no sector gets to influence the political process through cash donations.

hugh, in theory you may be right. but in practice, i see lots of donated labour from people who really can not be classified as wealthy in any way.

Hugh said...

Stargazer, I'm not saying poor people will never donate their labour or won't do so in significant numbers. I'm saying that if those with money were significantly restricting from donating it, they'd just start volunteering instead - and in greater numbers.

Anna said...

I think it's possible to run effective campaigns with big spending, although big spending must surely help or parties wouldn't do it.

I was in the Alliance for some years, and unsurprisingly we had no millionaire backers. We still mounted some effective campaigns at times. They were incredibly labour intensive, though. We folded letters and stuffed them in envelopes by hand, when other parties hired kids to do the delivery work for them, for example. When the party was in its best form, people were happy to do this - we felt motivated by the feeling that we were defending important social principles.

You note, stargazer, that mass political participation has gone by the wayside, meaning wealthy donors are more important. You're right - but I think we should be fighting this trend, not capitulating to it.

stargazer said...

absolutely, anna. hence the EFA, but when labour tried to raise state-funding 18 months ago, there was such a backlash in the media and from other parties that they couldn't go ahead with it. i'm not saying that we should capitulate at all. what i'm saying is that if we don't provide alternative funding models liek state-funding, we have no option but to capitulate.

Hugh said...

The chief question mark over state funding is, does one pay all parties equally? And if not, where does one put the cut-off point (or the gradiation points) - and how does one prevent those points from promoting a pre-existing party system?

How about a more radical idea - don't allow parties to spend any money on advertising? This would not only require them to rely on volunteer labour, but on face-to-face meetings. This might overly advantage parties with good speech-makers (which is not necessarily the same thing as competent administrators) and unecessarily clog up public places. But other than those, I don't see a downside.

Anna said...

Are there any effective models for curbing political spending in other countries?

Something which I think has made the spending thing worse is the proliferation of media in the last 20 or so years, including the introduction of the internet. I'm not suggesting we turn back the clock, but when NZ had only 2 TV channels (or one, if you go back further), reaching the voting public was a pretty straightforward matter. Practically everyone in the country watched the leaders' debates, the same documentaries, the same news, etc. This also had a kind of unifying effect on the public I think - it made certain things topical, because almost everyone was aware of them. There's clearly some downsides to this in terms of potential censorship, lack of access to diversity of info and views, etc.

Hugh said...

Notably, anna, twenty years ago we had an extremely rigid two party system, and I think the difficulty of third parties (or fourth parties, if we give a partial exception to Social Credit) in accessing that state-controlled media market played a fairly important role in maintaining that system.

Anna said...

Fair comment, Hugh. The diversifying of the media and introduction of MMP are (arguably) part of the same trend, to some extent - the movement away from heavy state intervention/regulation. And that's been both good and bad.

stargazer said...

How about a more radical idea - don't allow parties to spend any money on advertising? This would not only require them to rely on volunteer labour, but on face-to-face meetings.

but hugh, how will anyone know if the face-to-face meetings are on if you don't... advertise them!

Hugh said...

If all parties could do was hold meetings, there'd be so many of them you'd find it quite hard to miss them unless you were a night shift worker.

Carol said...

But then there's the sick, disabled, elderly, single parents at home with children etc etc.

However, I think more public meetings is a great idea. And more proper debates of the issues on TV, rather than some game show type short q & a.

Hugh said...

You're right Carol, I guess it's not practical after all.

The basic problem as I see it is that in a democracy, information needs to flow from parties to voters, and in a capitalist system, the movement of information carries a cost.

It's obviously not fair to ask the voters to pay the cost, but by asking the parties to pay that cost we're requiring them to be money-making institutions as well as policy think tanks.

Unfortunately, having the state provide a basic level of funding basically puts the cost back on the voters once again, and risks shutting out outsider parties undemocratically.

Carol said...

But it's not just information that needs to flow from politicians to voters, Hugh. There needs to be channels for public debate and critique. That shouldn't be so expensive. eg like happens here?

The problem is that electioneering has gone into the mode of advertising of consumer society: expensive billboards, TV ads etc that will appeal to the emotions as much as the mind. And a focus on the politics of personality as presented via the media, rather than a strong focus on the policies and capabilities of the pollies.

A focus on how things are said, more than on what's said.

Hugh said...

Carol, when you talk about 'channels for debate and critique', who should these channels flow between? Between voters and other voters, or between voters and candidates? If it's the former, I don't think there's anything the government can meaningfully do. If it's the latter, I don't think voters will have much luck trying to change politician's minds - if you don't like their opinions, vote for somebody else.

I don't think it's possible for the government to try to control how things are said without moving into censorship. And really, it's difficult to control the standard of debate without excluding some issues. from consideration To some people blaming New Zealand's problems on Asian and Pacifika immigrants is a valid concern, to others it's gutter politics.

Carol said...

Good questions, Hugh. Not an easy answer. But,I think both politicians and the media could encouraged more considered and open debate, in the way they present and discuss issues.

Cactus Kate said...


I capitalised the word "union" as in a post about funding political parties and money the writer didn't mention the word in any context at all so it needed to be emphasised.

Given the torrent of abuse usually posted on this blog (mostly sexual), I would like to think the female owners of the blog could handle it without needing a male numpty like yourself to protect them from the horrid nasty CAPS.

This post authored without covering Union donations and gifts to political parties is rather like talking about the most popular icecream flavours and forgetting vanilla isn't it??

Stargazer - An "e" is next to "r". I was tired while making the comment as unlike many on the left, I had been working an already full day from 8am til midnight my time. I'm sure you knew what I was saying.

You have proven precisely what I have said in your answer here.

While it's not ok and somehow evil for big business to donate to parties who already (remember) espouse lower taxes, freedom and ease of doing business -

it's ok in your mind for Unions to donate if the parties "promoted policies like flexible working hours, compulsory meal breaks, annual increases in minimum wages, paid parental leave, 4 weeks annual leave, multi-employer collective agreements etc et"

Sounds like you belong at the (double) Standard.

Anna said...

You raise an interesting point re unions, Kate, but your suggestion that people on the left don't work hard is a bit on the nose.

What did you mean by the torrent of sexual abuse?

Hugh said...


I can assure you I'm not trying to protect anybody from anything, let alone the caps lock key. It's just that to me, caps lock is the typewritten equivalent of shouting, so it comes off as rather jarring. In my experience general blog/forum etiquette tends to frown on it, but if that's not the case here, I withdraw and apologise.

stargazer said...

kate, i mentioned unions in para 2 in the context of them being an alternative source of funding to the BRT. and i'd say again that unions don't have anywhere near the kind of funds that BRT members have.

the point of this post is that political parties are forced to go to big money donors if they want to be able to run a credible campaign, and it was in response to comments made by anna.

i'll repeat the comments i made to home paddock. at least what the unions are doing is open and transparent, and their agenda is open and transparent. not so with donors to national and ACT. that is the main problem i have with big business funding (well, also the fact that their policies do not benefit the majority of nz'ers, but that's not a funding issue).

and i also said i'm quite happy for both unions and big business to keep out of funding political parties, as long as we have an alternative funding model in place.

re the typo, because you did it twice, i thought it was deliberate. sorry.

homepaddock said...

Open and transparent? A union donates to the Labour Party which gives money to the union for "education" and the union donates the the party ...

We can see it happening but that doesn't make it right.

If Kate's comment about people on the left not working is on the nose so is Hugh's that if you're poor you're more likely to work at a demanding job.

For the record I think hard work crosses the spectrum.

Hugh said...

Homepaddock, I wasn't trying to say that the wealthy are personally lazy, simply that generally jobs that involve hard physical labour aren't high paying.

If you have an alternative explanation for the historically higher levels of volunteerism among the supporters of conservative parties, then I'd be really interested to hear it.

Julie said...

Cactus Kate said:
"I capitalised the word "union" as in a post about funding political parties and money the writer didn't mention the word in any context at all so it needed to be emphasised."

Yet, as Anjum (stargazer) points out, she did mention union donations in the original post, in the very second paragraph, when she wrote:
"unions do provide some help, but unions don't have anywhere near the kind money that big business has."

Hardly ignoring the role of union donations, but the original post was indeed mainly about other sources of income for parties, namely corporate donations.

I quite like the idea someone mentioned up thread of all the corporate citizen type donations (the ones where the business says "we want to support the democratic process therefore we give to the democratic institutions of political parties") are pooled and shared. How would you do that sharing fairly? Dunno. Not like the broadcasting money anyway.

It seems to me that any funding system we have shouldn't just reflect polling or seats, because then it simply further entrenches those who are in and those who are out.

Ok, I really am off to bed now.

Carol said...

Hugh, on cheap ways of stimulating public participation in debating and spreading info for elections: there are some pleasing signs of grass roots action for the up-coming election, coordinated online.

there's vote with both eyes open, that provides posters for download (in compliance with the new electoral law),

and The Standard has an online hub, encouraging people to do their own organising.

I'm not sure how much this will filter thru to the large part of the population who don't follow political debate online, though.

I am thinking of participating in some way. That is I can ever shake this cold & get my energy back. This leftie came down with my first cold in years, with the first time I've had off in years of long hours of work (mostly 6 or 7 days a week).

Julie said...

Get well soon Carol! And thanks for the campaigny links. I hope to see some of that material outside of the imaginary world sometime soon.