Do Political Donations Threaten Aotearoa New Zealand’s Democracy, and Does This Matter?
By Chantelle Van Vuuren
In Aotearoa New Zealand, donations to political parties should face greater scrutiny, as otherwise the nation risks perpetuating the maintenance of the status quo, exacerbating inequality among citizens, and undermining its democracy. Political donations should not be viewed as something charitable but should be recognised as a donor’s investment in ensuring that the political parties receiving this money protect their interests. These donations have significant ramifications and pose a threat to fair elections and desires for a just democracy.
The Issues Political Donations Pose in Aotearoa
Political donations are a form of political lobbying rooted in donors’ desires to obtain support for regulations, laws and policies that are in their interests. They arguably maintain inequity and wealth disparities in Aotearoa, as often the interests of those donating pertain to their desires to receive benefits from implemented policies from political parties, such as tax cuts or the assurance that new taxes, such as a wealth or capital gains tax, are not introduced and implemented. Political donations often incentivise political representatives to maintain the status quo. Consequently, without intervention in the process of political donations, pressing issues, such as climate change, risk aggravation, as supporting the mitigation of these issues tends not to align with the interests of those providing donations.
The Inadequacy of Current Regulations
The inadequacy of the country’s regulation of political donations is concerning and poses a significant threat to the future of democracy in Aotearoa. The current threshold in Aotearoa whereby donors are required to disclose their identities is where $15,000 or more is donated. However, in many other countries within the Organisation for Economic Cooperation and Development (OECD), this sits at $5,000. Additionally, Aotearoa has no limit on donation amounts from identified donors, further illustrating that Aotearoa’s current regulations regarding political donations are inadequate, as affluent individuals can easily use wealth to propel their interests.
Moreover, while the New Zealand Government’s banning of foreign donations above $50 in 2019 was a step in the right direction, the effects of this in safeguarding Aotearoa’s democracy are undermined by the loopholes that remain for foreign donors through enduring avenues of corporate and anonymous donations. One such example is that where people overseas own companies, so long as these companies are registered in Aotearoa, any money they give is not deemed a foreign donation.
Furthermore, the New Zealand Government implemented a ban on foreign donations over $50 on the basis that any influence on the country’s elections should only come from those within it and without financial motivations. Arguably, such a ban should be extended to donations within the country to also exclude the potential for quid pro quo agreements and to prevent the prioritisation of the wealthy minority’s interests over the capacity for Aotearoa’s remaining population to actively engage with the country’s democracy.
Political Donations and Their Impact on Aotearoa’s Democracy
Where democracy speaks to the power of the people, it is not unjustified to have concerns for the future of democracy in Aotearoa, where this power has arguably been usurped to emphasise the power of wealth and advance the interests of those who can afford to donate. Donations to political parties manifest in influence towards Aotearoa’s democracy, with the money donated from affluent individuals and prosperous corporations arguably allowing for the protection of their interests. Excessive donations to political parties and their election campaigns spur public mistrust in elected leaders, with no guarantee that they would not simply act in the interests of their donors once in an appointed capacity. Consequently, one recommendation to mitigate any mistrust and safeguard the country’s democracy could see the disclosure of all donors’ identities above $100 to enable the voting public to accurately assess the motivations of political candidates and parties.
Political Donations and the 2023 General Election
Political donations also often produce an imbalance between resources allocated to the centre-left and the centre-right, ultimately granting an advantage to the political parties who have raised more money and are better resourced, particularly when election campaigns are concerned. For example, well-funded parties have the benefit of being able to promote their proposed policies and election aspirations to a larger voting audience. With Aotearoa’s 2023 general election fast approaching, in light of desires for a fair election and the functioning and preservation of the country’s democracy, political donations and the inequities they produce are of particular concern. In the 18 months leading up to July 2023, the centre-right parties of National, New Zealand First, and ACT amassed approximately $9.64 million in political donations, a figure taken from all donations made to these parties across 2022 and major donations of $20,000 or more made across the first seven months of 2023. In stark contrast, within the same period, the centre-left parties of Labour, Greens, and Te Pāti Māori accumulated approximately $1.81 million. The sheer magnitude of the donations to the centre-right parties and the extent to which these contributions have surpassed donations to other political parties indicate that these donations cannot be ignored and that, consequently, stringent donation limits are necessary to have fair elections in Aotearoa.
Additionally, with recent polling pointing to the National Party being most likely to form Aotearoa’s next government, donations to the party have been high as wealthy businesses and affluent individuals seek to secure access to those who will come into power, to have their interests protected and for any governance to occur in favour of said interests. When politicians make decisions with significant ramifications, where such immense donations have been made, donors’ interests will likely be prioritised. Ultimately, there is a dire need for greater scrutiny of political donations for any political party vying to govern Aotearoa to uncover possible conflicts of interest that could result in private gains for the wealthy few, with this careful examination also necessary for a functioning democracy.
Conclusion
For every person’s influence in Aotearoa’s democracy to carry equal weight, there should be more disclosures of those donating to political parties, tighter limits on the amount affluent individuals can donate, and the prohibiting of corporate donations. Researchers Lisa Marriott and Max Rashbrooke posit several recommendations for the improved regulation of political donations and the thriving of Aotearoa’s democracy, notably that donations face an annual limit of $15,000, that only eligible voters and not organisations can donate, that donors must disclose their identities when they donate over $1,500, and that the Electoral Commission should have greater powers to investigate donation fraud. Political donations should face more stringent regulation to ensure public trust in political processes, avoid corruption, and uphold the integrity of institutions, political representation and participation processes, and Aotearoa’s democracy.
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