Electoral (Finance Reform and Advance Voting) Amendment Bill Submission

SUBMISSION OF DAVID FARRAR
TO THE ELECTORAL LEGISLATION SELECT COMMITTEE
ON THE ELECTORAL (FINANCE REFORM AND ADVANCE VOTING) AMENDMENT BILL

About the Submitter

1. This submission is made by David Farrar in a personal capacity. I would like to appear before the Committee to speak to my submission.
2. I have over 15 years experience with the Electoral Act.  As a former parliamentary staffer I advised National Prime Ministers and Opposition Leaders on the Act.  I have been an electorate campaign manager and a national campaign staffer, requiring intimate knowledge of the Act. I also have blogged extensively on electoral issues.

   Executive Summary
   

3. I support the Electoral (Finance Reform and Advance Voting) Amendment Bill as it is an improvement upon the status quo.
4. I am disappointed that the bill does not go further in reforming our electoral finance laws. Specifically I believe that the broadcasting allocation needs significant reform, and the electorate spending limits are unacceptably low.
5. However I accept the wisdom of the Government’s position that no major changes from the status quo will be included, without widespread parliamentary agreement. Effectively the Government has given a veto to the Labour Party over what changes were included in the bill.
6. I believe it is highly desirable that there be widespread consensus on electoral laws. They should not be something for an incumbent Government to unilaterally change, as the ultimate prize in a winner takes all regime. For this reason, I somewhat reluctantly accept that there will not be broadcasting reform unless the Labour Party agrees to it – even though National and ACT who both support it could reform it by themselves.
7. It is my hope that the consensual approach taken by the Government, and specifically the Minister of Justice, is adhered to by future Governments. Just as a National-led Government has given the Labour opposition a veto over major reform, the implicit assumption is that a future Labour-led Government will do the same, and we will never be treated to a process such as we saw with the Electoral Finance Act.
8. I obtained cabinet papers relating to this bill from the Ministry of Justice under the Official Information Act. One of the options in those papers was a significant reform package which did reform the broadcasting regime and increase spending limits, but also imposed spending caps on parallel campaigners and lowered the donation disclosure limit.
9. That package is one I believe to be slightly superior to the consensual package that this bill is based on. It would have delivered two extra reforms that broadly speaking those of the right tend to have wanted (higher spending cap, broadcasting reform) and two reforms that broadly the left wanted (lower donation disclosure threshold, parallel campaigner spending cap).
10. I would urge committee members to consider a more significant balanced reform package, if it has concessions from both “sides”. For example while I am strongly against parallel campaigning spending limits, I would be prepared to compromise on that if it meant that the broadcasting regime was reformed to allow parties to buy their own broadcasting.

    Regulated Period
    

11. The proposed S3(B) defines the regulated period as starting the day after the default day, which will be three months before the last possible day an election can be held. There are exceptions for when an election is called early.
12. I believe it was the intention of the Government to avoid the problem of retrospectivity in the current law (which is highly desirable), but the solution they have come up with has consequences that would in most cases dramatically shorten the regulated period. This is because the last possible date an election can be called tends to be six to seven weeks after the previous election.
13. For example the last practical date for the next election is 7 January 2012. This means the regulated period would only start on 8 October 2012, and if the election was at the traditional late November date of 26 November 2011, the regulated period would be 49 days –almost half the normal three months. There was no policy consensus on shortening the regulated period like this.
14. The best solution to the issue of the regulated period would be to have a fixed election date, being the last Saturday in November every third year. This would allow the start of the regulated period to be known well in advance. It would also remove the tactical advantage an incumbent PM has in setting the election date, and stop snap elections on dubious grounds such as in 2002 and 1984.
15. If a fixed election date is not adopted, then I recommend two principles be applied to setting the regulated period. They are:
    (1) The regulated period should never be retrospective
    (2) The regulated period should, where possible, be around three months
16. I can testify with first hand experience the grave difficulties one can have as a campaign manager, when you do not know the start date of the regulated period until you are halfway through it. It is very important it never be retrospective. Now that it seems likely that the regulated period will also apply to the definition of MPs parliamentary advertising, I am hopeful this principle will be accepted.
17. I believe the law should be based on what will be the normal experience – an election held three years after the last election, hence the start of the regulated period should be two years and nine months after the previous election.
18. If an election is held early, then the regulated period should start from the day after the PM announces and gazettes the election date.
19. If for some reason the PM announces the date of the election more than three months before the general election (which may happen to avoid a by-election), then it should start from three months out.
20. Sometimes an election is more than three years past the previous election. This allows elections to move back to their normal November date, after an early election. In these cases the regulated period will be a bit longer than three months.
21. I have attached a table as Appendix A, which shows how long the regulated period was, or would have been, for every election since 1981 under the existing law, the bill, and my proposal. The average number of days in the regulated period under the bill is 64 days. The status quo is 92 days and my proposal 108 days.
22. This proposal can be implemented by amending the proposed S3B(5) so that it reads “default day means the day that is two years and nine months after the last general election”, and deleting S3C.

    Meaning of election advertisement
    

23. I propose two amendments to the exclusions from election advertisements in s3A(2).
24. I propose that s3A(2)(b) have the word “solely” replaced by primarily” in relation to the purpose of a news item being for informing, enlightening or entertaining readers. A test of “solely” is too restrictive and could result in newspaper editorials being classified as election advertisements.
25. I also propose that s3A(2)(e) have the words “on a non-commercial basis” deleted. The intent of the section is to exempt people such as bloggers from being required to register as a promoter for merely stating their personal views. The test of “personal political views” is sufficient in my opinion to exclude someone being paid to promote someone else’s views. The additional requirement of non-commercial is not defined, and could catch a blogger such as myself who receives a modest amount of advertising income through their blog

    Candidate’s Election Expenses
    

26. The limit on candidate election expenses should be set high enough so that a candidate can effectively communicate to the voters in their electorate, and low enough to stop a candidate from being able to gain an unfair advantage through dominating the local media.
27. My experience in 2005 is that the limit of $20,300 is far too low to allow a candidate to do even basic communications with the voters. It is less than 50c per adult in the electorate. Excluding GST it will be only $17,650 or around 40c per adult – not even enough to send a single direct mail letter.
28. This is hugely disadvantageous to candidates standing against incumbent MPs, as the incumbent has the benefit of parliamentary profile and resources.
29. I would urge the committee to ask officials to obtain specialist advice on what would constitute a reasonable electorate campaign for three months. For example it could be two direct mail letters, two unaddressed pamphlets, six quarter page ads in community newspapers, 50 hoardings, and one billboard. The spending limit should be set based on empirical costings at a level to allow the agreed upon activities. That limit should then be inflation and population adjusted.
30. If the committee is not wanting to empirically cost what an electorate campaign should consist of, at a minimum I would ask that the limit be increased to take account of inflation since 1993. That would move the limit to $29,000.

    Party’s Election Expenses
    

31. I note the limit for political parties has also not increased significantly since the early 1990s, despite inflation of 27% and population growth of 14%.
32. I support the proposal to inflation adjust the limit going forward. I believe it would be prudent to also population adjust it. Campaign costs do increase with population.
33. I also believe that it would be beneficial to increase it to take account of the inflation and growth since 1994. This would suggest a limit for a party contesting all electorates of $3.5 million.

    Liability for political parties
    

34. I would ask the committee to consider allowing political parties to be held liable for breaches of the Act, not just individuals such as party secretaries.
35. The current law has, in my opinion, encouraged disregard for the law, by making sure those liable are kept in the dark about certain bank accounts and trust funds. We saw this reported in 2008 with regards to the NZ First Party where the poor old party secretary was in the gun for donations and transactions she knew nothing about.

    Donations
    

36. I am pleased to see the requirements for parties to disclose their total amount of donations, in bands, as this will give greater transparency. I was one of those who proposed this during the policy review.
37. It would be desirable to make clear in the proposed s6A that the “total amounts” to be disclosed in bands are the total amount of money donated, not the total amount of donations made.
38. The current law on donations was only put in place in 2008, and has yet to go through a full electoral cycle. I think it would be premature to make conclusions on its adequacy or inadequacy until we have the benefit of a full cycle to review. It would be useful to have a full review after the 2011 election.

    Parallel Campaigners
    

39. The requirement for those who spend over $12,000 on election advertisements to register with the Electoral Commission is a useful transparency measure. The Electoral Commission should ensure it has full contact details of an individual representing the promoter, including their full name, address and phone number.
40. I do not believe there needs to be a spending cap on promoters. Apart from the fact it would be trivial to get around, it may actually encourage higher spending campaigns as a cap can become a target – as it has for political parties.
41. The public, assisted by the media, have shown themselves very capable of deciding how much value to place on an expensive advertising campaign funded by particular individuals or groups.
42. Sometimes there may be sound public policy reasons for a promoter to spend a lot of money on election advertising. If for example a political party passed a law confiscating property off a group of citizens. They may have had the Government rob them of $100 million of assets. They should be entitled to spend say $200,000 to campaign against the party that did that.
43. Take another scenario. What if the Crown confiscated land or property rights off an Iwi, as they have done in the past. That Iwi might want to campaign against the party in Government which stole their land or property rights. Do we believe it would be a good thing to prevent an Iwi from campaigning against a party that legislated away its rights?

    General
    

44. I was one of the “overseas experts and interested parties” who met in Wellington on 14 May 2010 to consider improvements to the bill. A joint submission was filed on our behalf by Andrew Geddis. I endorse the recommendations made in that submission..
45. I think the process lading to this bill has been excellent, with both a discussion paper and a proposal paper, and then a bill. I would urge this to become the standard process for future electoral finance reform.
46. While not a major focus of mine, I do support the provisions allow advance voting without needing to justify why.

In summary I urge the Electoral Legislation Committee to recommend the Electoral (Finance Reform and Advance Voting) Amendment Bill be passed, with amendments as proposed.

David Farrar