December 6, 2010 11:00am by David Farrar

Political Donations

A lengthy article on political donations by Jenni McManus in the Dom Post:

Corporate donations – once the financial lifeblood of political parties – have slumped significantly since tough new electoral rules were enacted in 2007.

Not necessarily. Donations over the disclosure limit of $10,000 have slumped, but that does not mean total donations have decreased. The law about to be passed by Parliament will shed some light on this, as it will require reporting of total donations in bands, not just those over $10,000.

Labour’s subsequent law change introduced new rules and a $120,000 cap on such third-party spending.

It also laid down a new disclosure regime for individual and corporate donations, and for anonymous and foreign donors.

For New Zealanders, anything above $10,000 had to be disclosed in the party’s annual return. Multiple donations from a single person or entity above $20,000 had to be reported within 10 days of receipt.

The $10,000 disclosure limit predates the EFA. That has been the law for many years.

So what do corporates hope to gain from donations? And what are they promised for their money? Very little, it seems, in a country the size of New Zealand when big payments to political parties confer no right to dictate policy – or even to be part of the policy- making process.

A large party will spend around $5 million in election year. So a $10,000 donation is just 0.2% of total income. This is why I think $10,000 is a good level for disclosure – it is impossible to think of policies being purchased at such a level.

It’s all about influence and access, says one National Party insider. “They think they become a ‘mate’ of the politicians – that they get on the government’s speed-dial. It puffs them up – gives them a vignette into a secret world, makes them feel part of an inner circle.

“But nothing is explicit. It’s a sort of code among the rich that if you give money, John [Key] is more likely to take your call.”

This type of donor is part of a small, select group. “It’s not your factory owner in South Auckland.”

The insider says it is “complete crap” that Kiwi MPs can be bought: “But the business community wants to be heard and [donations] are a way of ensuring this.”

And for many donors, it is supporting a party’s policies, because they think they are good for New Zealand and/or their business.

John Key and his wife are regular diners at Antoine’s, an exclusive Parnell restaurant owned by National Party supporter Tony Astle.

Astle says Antoine’s donated $105,000 in June this year to the Nats because he “hated the Labour government of the past nine years” and had never been slow in coming forward to express this view.

“It almost ruined by business,” he says. “I was very optimistic about the National Party and that’s why I organised a fundraising dinner for them. It was my opportunity to do something.

A damn generous donation.