Why New Zealand political donations have more than tripled

All parties currently in Parliament, except Te Pāti Māori, have seen significant increases in donations for 2023.

NZ First and the Greens announced donations that were 3.4 times their previous best year. Labour announced 3 times, ACT announced 2.2 times and National announced 2 times.

The six political parties that entered Parliament received nearly $25 million as a whole – the largest total in history and nearly three times the total allocated in 2017.

The $25 million announced is equivalent to a donation of nearly $5 per resident of the country.

How can we, in the midst of a cost of living crisis, invest so much money in an area of ​​life that is widely considered to be relatively unpopular?

Now we know

The truth is that political parties probably aren’t getting a lot more money than they used to. It’s just that they now need to tell us more about what’s going on.

For the first time, political parties must report the value of donations they receive of $1,500 or less, provided the donor is known. Previously, they only had to report the value of anonymous donations of that amount. The new reporting rules have brought to light huge sums of cash donations that had previously been hidden from the public.

Max Lashbrook, a senior research fellow at Victoria University of Wellington, said the change to require reporting of these small donations closed a “confusing loophole” that had left people speculating on how much money was in political parties’ bank accounts to spend on campaigns.

Mr Lashbrook said it also dispelled a misconception. “People always think the playing field is a little bit more level than it appears,” he said. “Because people might think National is way ahead of Labour in terms of large donations, but people always think Labour is doing very well in terms of small donations.”

In fact, the National Party, not Labor, dominated the 2023 small donations rankings. Of National’s $10.3 million in total donations, $4 million came from 44,000 small donations of less than $1500. Labor raised less than $3 million from small donations.

Lashbrook said the new, more complete picture of donations shows there remains an imbalance in fundraising ability between parties on the left and right of the political spectrum.

Overall, the National, ACT and New Zealand First parties that form the coalition government received twice as much in donations as Labour, the Māori Heritage Foundation and the Green Party combined.

What we know about the donor now

In addition to reporting non-anonymous donations of $1,500 or less, parties must now disclose the name of any donor who gives $5,000 or more. Previously, any donation under $15,000 could be anonymous.

This change also changed the face of political party donations.

Firstly, we now know that all Labour MPs donate a portion of their salary directly to the Labour Party.

But the news also appears to have come as a surprise to at least one New Zealand First donor. BusinessNZ was recorded as having donated $6000 to the party last year, but when contacted by RNZ it said it was unaware of the donation.

RNZ understands the “donations” were tickets to a dinner hosted by New Zealand First after it signed the coalition agreement and joined the Government.

A New Zealand First spokesperson said when the ticket price exceeds the cost of the event, the remainder is considered a donation. The party declined to provide information about other guests who attended the dinner. RNZ understands former Labour MP Clayton Cosgrove’s lobbying firm also attended the dinner and recorded a $6000 donation.

New Zealand First is the only party to have accepted corporate donations since the coalition agreement was signed. Aggregate company J Swap donated $11,000 Residential investment company Hero Limited donated $50,000. The party also received $19,999 from property developer Andrew Krukziener.

Since the formation of the Coalition Government, the National Party has received just one donation from the estate of Harold Russell, while the Greens received one donation of $27,000 from artist Martin Basher.

People who spend lavishly spend more

While thousands of donors gave small sums, a handful gave hundreds of thousands of dollars.

The largest donation in 2023 came from a one-off donation from sheet metal worker Warren Lewis. The first-time donor gave $500,000 to the National Party. He told New Zealand Herald He likes what Christopher Luxon has done for the party. It is the largest individual donation the party has received since the estate of Cyril Smith gave $517,970 in 2014.

Other large donations to political parties in 2023 came from Mark Wyborn ($200,000), the Hugh Barr estate ($182,167), Jenny Gibbs ($155,000) and Nicholas Mowbray ($150,000).

Overall, there were 26 donations of $100,000 or more, compared with just two in the 2020 COVID-19 election and seven in 2017 – when Labour finally came to power after three terms of a National-led government.

Some donors gave money to multiple parties, such as the Rank Group and its billionaire director Graeme Hart, who gave $446,000 to the ACT, National and New Zealand First. Previously, the group gave $225,000 to the ACT and National in 2022.

Other donors have also made significant contributions over the years.

Jenny Gibbs has donated more than $700,000 over the past decade. During that time, she has only donated to ACT, a political party closely supported by her ex-husband Alan Gibbs.

Gym owner Phillip Mills first donated to the Greens in 2008. Since then, his donations have been split between the Greens ($330,000) and Labor ($272,500).

Trevor Farmer is a recent donor. Like Hart, his donations were made in 2022 and 2023, to National, ACT and New Zealand First.

All donors support only parties on one side of the political spectrum.

Mr Lashbrook said the days of corporate donations to both sides of the political spectrum were “gone”. In the past, Westpac, Lion Nathan, Fletcher Building, Contact Energy and Todd Corporation donated equal amounts to Labour and National.

He said donors can’t claim they are “helping democracy” if they only give to one side of the political spectrum, something he’s heard people say about large donations. “If they believed in democracy, they would give to both sides.”

one His completed research He interviewed eight large donors who revealed they supported political parties that aligned with their political stance. While they denied making donations to influence politicians, they admitted that large donations helped them gain opportunities. “One donor said bluntly that if you donate, you have a greater chance of meeting with a minister.”

One of the recommendations is Independent review of the electoral system The proposal, released in November, would cap the amount an individual can donate to any single political party. It proposes a cap of $30,000 over a three-year election cycle.

This limit is higher than in Canada and Ireland, where donations are capped at $2,000 and $4,400, respectively.

Lashbrook said limiting the amount wealthy donors could give would incentivise political parties to raise money differently. Parties needed to reach out to the broad masses of New Zealanders rather than currying favour with a small number of wealthy people. “I think a well-functioning political finance system is based on a large number of people donating small amounts of money.”

The Independent Electoral Review noted that some political parties had expressed concerns that this would significantly reduce the money they raise.

Rushbrook believes lavish spending has increased in the run-up to the 2023 election due to dissatisfaction with Labour’s handling of the coronavirus pandemic.

“They are against so-called Fortress New Zealand policies, policies designed to protect the public from coronavirus… Someone close to the National Party told me a few years ago that it had never been easier to raise big money for the National Party from the business community.”

Who does the company support?

In 2023, business donations went to the National Party. The party received 51 donations totaling more than $1.2 million. It was followed by ACT with nearly $500,000, and New Zealand First in third with $275,500.

National’s largest donation came from private equity firm Christopher and Banks, which gave $200,000. After the Newsroom incident, the party returned another $200,000 from Alpha Laboratories. story Connect the directors of the company with an immigrant hotel.

The ACT’s largest commercial donation came from the Rank Group at $104,000, with its billionaire director Graeme Hart giving a further $100,000 personally.

Rank Group also made the largest commercial donation ($110,000) to New Zealand First.

Two businesses donated to the Green Party: Weft Knitting Company ($100,000) and Clarity Cloudworks ($10,350).

The Labour Party does not receive any donations from business.

Lashbrook believes that companies should be banned from donating to political parties. “Donating to political parties is a privilege we should reserve for voters.” He believes this will increase transparency.

“It’s not always clear where the money actually comes from, who actually gives money to a political party and what influence they might be seeking can be murky.”

It also makes it difficult to split so-called gift-splitting, where large donations are broken down into smaller amounts and given through individual companies or trusts at the reportable level.

Other jurisdictions, such as Canada and several European countries, restrict donations to registered voters only.

Mr Rushbrook said unions should also be banned from donating to political parties.

“Frankly I think the unions are at a low ebb at the moment and would be happy to no longer have to give money to the Labour Party and be able to spend it on their own purposes.”

The union donated $335,000 to the Labor Party and $10,000 to the Greens. The union also donated to Labor candidates, donating a total of $42,760 to nine candidates.

Lashbrook suggested that if unions wanted to support political parties, they could suggest their members pay membership dues to the party, or volunteer.

Industry affiliations of top donors

Matching the names of individual donors with company directories shows that those interested in the property market give more, as do those in the finance industry. For the National Party, those working in manufacturing or retail also rank high, thanks largely to a $500,000 donation from Warren Lewis.

For both Labor and the Greens, it is the membership that helps prop up the coffers.

Support the party

Candidates and former politicians accounted for a large portion of the 2023 donations, adding more than $1 million to the total. The Greens’ tithing practice was well known, but the reduction of the disclosure amount from $15,000 to $5,000 exposed a similar practice by Labor. Party members and former MPs contributed $612,181 to Labor’s total donations.

The Greens donated a total of $218,274, National donated $145,490 and NZ First donated $65,578. ACT’s Karen Chhour was the only politician to donate to the party, giving $5200. The largest one-off donation from a member to the party was $50,000 from John Tamihere to Te Pāti Māori.