Only quite recently (1993, 2009) political funding in New Zealand has become an issue of public policy. Now there is direct and indirect funding by public money as well as a skeleton regulation of income, expenditure and transparency.
Contents
Spending on politics (Routine and campaigns)
As Anglo-Saxon democracies are considered to be campaign-oriented it is frequently expected that their political parties spend most of their money on campaign expenses. However, the split between campaign and routine spending does not always meet such expectations. In New Zealand party headquarters have stepped up their routine activities in recent years and shifted their budgets to cover such expenses. Despite such general development anglophone democracies still rank in the bottom half of political spenders as far as the general level of money expanded for political purposes is concerned.
Regulation
Like a few other established democracies (e.g. Canada and the United Kingdom) New Zealand election law stipulates statutory limits for political spending by individuals, groups or organisations that occurs at election times in order to influence political discourse in general or the outcome of a specific election in particular. In New Zealand spending limits for political parties and candidates (i.e. their campaign spending) do not include some typical election expenses (e.g. opinion polling, travel costs, consultancy fees).
Political contributions by foreign donors are allowed as long as they do not exceed NZD 1,500. There is no other limit to any political contribution made to parties and/ or candidates, either for election campaign or during specific time periods. Donations by government contractors (and possibly by state-owned enterprises) are allowed, too.
Obviously the 'class-conscious' strategies of political funding (business donations and trade union contributions) are a major obstacle to an outright ban of such 'institutional' sources of political funds which, nevertheless, has been enacted in Canada and the United States (where such funding practices also used to be applied in the old days).
Parties and candidates have to file financial reports ('donation statements') that do not cover expenses, just source of revenue. The threshold for the disclosure of donations to party political parties is quite low (NZD 15,000). Moreover, a donor's identity can be concealed in several ways (among them: conduit organisations, 'straw' or 'faceless' donors). Quite tellingly the average reported amount of anonymous donations trebled between 1996 and 2002.
Enforcement
The Electoral Commission of New Zealand (ECNZ), the body that organises elections, is also in charge of collecting and monitoring financial reports by parties and candidates. However, its mandate to investigate, enforce and sanction political finance rules is not very strong. The ECNZ does not carry out investigations and it would only report if the case went to court (after being investigated by the police). Following the 2005 election the ECNZ reported 17 potential offences (some of them relating to campaign finance rules) to the police, which did not prosecute any of the cases. Because the rules (as detailed above) are ridden with loopholes, their enforcement does not significantly influence the real flow of funds into party coffers and out of them. In 2005, both major parties exceeded the statutory spending limits without being sanctioned.