Significant and urgent reform of New Zealand’s electoral laws is needed in order to restore and protect the health of our democracy, and address the decline in public trust in the political system and citizen engagement with the political process.

Current electoral laws are failing to uphold the fundamental democratic principle that every citizen should have equal political power, with an equal ability to contribute to and influence political outcomes. The Opportunities Party submits that the Independent Electoral Review should focus on three key areas:

1. The excessively high and undemocratic MMP threshold, which fails to deliver a truly representative electoral system;
2. The significant and harmful role money plays in our political system, which undermines public trust and legitimacy of Government, and erodes a fair competition for power; and
3. The disproportionate and unjustifiable advantages incumbents enjoy, which the Electoral Commission fails to mitigate.

 

LOWER THE MMP THRESHOLD

Our electoral system undermines the sacred democratic principle that every vote counts.  225,182 people, or 7.9% of voters are not represented in the current Parliament because they voted for parties who did not make the threshold. In 2020, the party vote needed to get over the threshold was approximately 144,000 votes, or a minimum of 6 seats. That is both arbitrary and overly high. New Zealand’s democracy needs to provide greater representation, by reducing the threshold or removing it entirely.

It is undemocratic for any notion of a “wasted” vote, and reform is needed to increase the proportionate representation democracy requires, and the public expects and deserves.

The threshold distorts voters’ choices by causing them to vote for parties, not because they are their first choice, but because the party they prefer has little chance of reaching that threshold (Electoral Commission, 2012).

It is a damning failure of the current system and its prohibitive entry criteria that no new political party has made it into Parliament without having its origins in a pre-existing Parliamentary party.

The current threshold does not strike an appropriate balance between the need for proportionate representation and concerns about ensuring stable Government and its continuance is unjustified. Small parties in Parliament have not had a destabilising effect. There are repeated examples of coalition Governments over the past 25+ years under MMP that have included parties with very few seats, including in the 2008 Government, 1 United Future seat; 2011 Government had 1 ACT seat and 1 United Future seat; and in 2014, 2 Māori seats, 1 ACT seat and 1 United Future seat. 

There is therefore no basis to argue that by allowing small parties to enter Parliament there will be any destabilising effect. Instead, the threshold has disenfranchised voters, and convinced them to vote for a winning horse, instead of parties they most prefer. There is even less justification to argue that the threshold is necessary to exclude certain views. It is undemocratic to support a system that excludes parties because they have views that some dislike. The Independent Electoral Review cannot support such a position if it is committed to its Terms of Reference, that require it to make recommendations that ensure New Zealand’s electoral laws are (inter alia) fair and produce a representative Parliament, with a legitimate electoral system. If a party receives enough votes sufficient to fill a seat in Parliament, that is enough. There is nothing legitimate about excluding votes based upon an unjustifiable threshold.

If the Independent Electoral Review chooses to continue with the undemocratic threshold, it needs to be reduced significantly, and should be no more than 3%. Anything higher will only serve to maintain the status quo, and will perpetually exclude political challengers, locking New Zealand into a path where power is constantly swapped between the same groups.

Furthermore, the current system produces illogical and inconsistent outcomes. A glaring example was that a party earning 3.85% of the party vote received 4 seats (because it won an electorate seat) while a party winning 4.1% of the party vote received no seats (as occurred in 2008). Such situations prevent equitable and fair outcomes and the coat-tailing provisions should be removed.

The MMP threshold must be lowered to 3% or removed entirely to ensure a fairer and more representative electoral system.  Concerns around instability with a lower threshold are not supported by evidence. The coat-tailing provisions need to be removed to restore the core principles of equity and fairness our electoral system is meant to be based on.  

 

THE ROLE OF MONEY IN POLITICAL CAMPAIGNS

The consequences of economic inequalities on citizens

There are insufficient restrictions on the significant role money plays in political campaigns.

New Zealand’s electoral rules fail to mitigate against political inequalities caused by the unequal financial resources between citizens, and enable the significant wealth of private corporate interests and lobbyists to have a large influence, that ordinary citizens cannot compete with.

There are no limits on the amount of money a party or candidate can receive, or the amount any individual group can donate (excluding foreign/anonymous donations). There are simply reporting requirements for donations above the defined levels, and inadequate spending limits only apply to a short 3-month period prior to an election.

Unlimited private funding to politicians provides significantly more influence to wealthy donors who have a greater capacity to donate and influence political outcomes, and determine who will govern the country, than ordinary citizens.

Research from Stats NZ in 2016 found that over a third of respondents (and 47% of Māori) considered the public has little to no public influence on government decisions, and they were also found to be more likely to disengage from politics and be non-voters. Public trust and engagement in our democratic system is therefore in real danger.

 

Proposed Reform

Caps on political and campaign donations are needed. The lower the limit, the more citizens will genuinely have the equal political power they are entitled to have in a truly democratic system. This would also prevent parties or candidates being overly reliant, and therefore more susceptible to the undue influence of, a smaller number of large donors.

This proposal is an integral feature of Canada’s electoral system. Political donations are limited to citizens only, which removes the disproportionate influence by corporations, lobbyists or interest groups. Low donations limits are also placed on the amount of money a citizen can contribute to a party, candidate and third party (which in 2022 are approximately $2,100NZD per year).

Donations caps need to be set at a level within the reach of the average citizen, and The Opportunities Party submits this should be in line with the Canadian model.

Restoring legitimacy in our democratic process must override the business interests and business models of the major parties in New Zealand, who have for too long benefited from loose and unrestricted electoral finance laws.

Donations caps are needed to restore political equality among citizens, and between citizens and private lobbyists and corporate interests. Similar to Canada, these should be set to levels reasonably within the reach for the average citizen.

 

BARRIERS TO FREE AND FAIR ELECTIONS

Financial disparities undermine political competition  

New Zealand’s electoral process should also ensure a fair competition for power between candidates and parties. Instead we have an uneven playing field between challengers and incumbents. Financial disparities between political parties undermines fair competition for political power, and prevents all parties from having the same opportunities to share their messages with the public. The advantages for parties with greater funding increase exponentially, when some can afford for example, to hire full-time staff, pay consultants and spend more on political advertising.

The financial imbalance between political parties is stark. With National reporting over $1 million in funding for 2021, roughly $400,000 of which came from donations over $15,000, and Act reported over half of their funding was from donations over $5,000, with one individual giving Act $125,000 during that 12-month period alone, and the vast majority of Greens funding was from donations of over $15,000 (Electoral Commission, 2021). At the same time parties such as the Māori Party and The Opportunities Party reported less than $15,000 combined (Electoral Commission, 2021). These large donations to the major parties are not amounts ordinary citizens can compete with, and skew competition between political challengers.

As an aside, it is extremely concerning that parties are not required to report every donation received, and therefore it is impossible to have a full and transparent account of the financial position of political parties. This should be very troubling for the Independent Electoral Review, and a change to require all income to be recorded is simple and necessary.

Weak attempts to limit spending for the three months before an election come with a number of exceptions (such as surveys/opinion polling, travel and some labour). Therefore those parties with significant funds can continue to spend above the upper limits, reinforcing the advantage of their superior financial position.

Insufficient spending limits provide parties that receive significant donations from wealthy individuals with an improper advantage over their competition. Spending limits need to be reviewed and extended to meaningfully mitigate against such inequality.

All income to political parties should be reported.

 

Incumbent advantage: funding

The above issues are concerning before even taking into consideration access to Parliamentary Services funding by incumbents.  This funding is frequently used for electoral advertising under a very thin veil to appear to meet the criteria for “parliamentary purposes” (but simply used to grow support on social media).  The advantages of having full time support staff, paid travel, research, and offices to name a few, are privileges that are not only out of reach for challengers outside of Parliament, but highlight plainly the different starting points political competitors are entering the arena from.    

Of greater significance, is the statutory criteria for the Electoral Commission to determine the allocation of broadcasting spending.  The criteria for the broadcasting allocation strongly reinforce the incumbent advantage, being predominantly based upon previous success.  It is inevitable then that their decisions heavily favour parties that are already in power and enjoying the benefits of Parliamentary privileges.                                                                                 

The Electoral Commission should be required to reduce the differences in allocation as between parties.  Providing some parties with 10 times the funding of others is a disproportionate advantage, and given the fundamental importance of free and fair political competition, it is difficult to justify the current approach continuing.

 

Incumbent advantage: access to public

The Electoral Commission fails to administer the electoral system impartially, efficiently and effectively, and should provide far greater oversight to ensure its objectives are met.

The Electoral Commission should not have stepped back and allowed the media to play gatekeepers of New Zealand’s democracy. That is the responsibility of the Electoral Commission. In particular, it has allowed media networks to arbitrarily create their own criteria on which political parties the public should hear from in televised debates. That is a complete dereliction of its duty to ensure impartial and fair elections. The Electoral Commission should step in to provide fair opportunity for all political parties to be heard by the public. At the very least, the criteria should be a matter for the Electoral Commission, and not unaccountable media.

The Electoral Commission also plays an inadequate role when it comes to local debates – which are both a critical and influential function of political campaigns. Community groups should not be allowed to exclude some challengers from public debates, and therefore exclude from access to the public, despite the Electoral Commission confirming those challengers meet the criteria to be a registered political party/candidate. That again should be a matter the Electoral Commission should be required to oversee closely, and end the distorted public perception that only those parties in power should retain that power.

Parliamentary Services funding needs to be restricted, and calculated towards both donations received by the party, and spending limits for costs incurred. 

The Electoral Commission should take responsibility for ensuring free and fair elections, which requires the Justice Committee to propose changes to the criteria that determines the allocation of broadcasting funding. 

Direct the Electoral Commission end arbitrary and exclusionary practices by mainstream media (and community groups) that provide incumbent parties with significantly greater representation and access to the public.