King Annette: Electoral Finance Bill — Second Reading 
King Annette: Electoral Finance Bill — Second Reading 
[Volume:643;Page:13380] 
Hon ANNETTE KING (Minister of Justice) 
: 
 I move  
That the Electoral Finance Bill be now read a second time 
. I believe it is a strong affirmation of the strength of democracy in New Zealand that there has been such considerable public interest in this bill. The Justice and Electoral Committee received written submissions from 575 individuals and organisations and sat for extended hours to ensure that 101 oral submissions could be heard. The committee listened to these submissions and then consulted the Human Rights Commission about changes that advisers had proposed in the departmental report on the bill. 
The bill is now reported back to the House and the report recommends that a number of changes be made. The Government is listening and believes that the committee’s recommendations will meet the concerns raised by a very large number of submitters. I would like to emphasise here that Parliament decided that the committee’s membership should be expanded to include representation from all parties in Parliament. The recommendations therefore reflect the joint views of many parties in this House. The amendments recommended by the committee are supported by the Government. 
This is most important legislation for New Zealand. This bill does not restrict free speech. It simply restricts rights to purchase speech through advertising. This is done to safeguard our democracy by keeping the undue influence of money in politics to a minimum. That is what a level playing field means and the Government believes that most New Zealanders understand and support this principle. The reforms help to bring New Zealand into line with other democracies as a place where every voter can have his or her voice heard fairly regardless of his or her personal circumstances and where every person can hear everyone else’s voice clearly and transparently. I was pleased to note that many of the submissions support the aims of the bill to help promote participation in democracy and to clean up New Zealand’s electoral system and protect it from abuse. I thank the committee for approaching its task in a multipartisan way and for sitting for long hours. 
I now turn to the key recommendations made by the committee. Firstly the committee has recommended that the definition of “election advertisement” in clause 5 be narrowed so that the bill regulates only those who campaign to influence the outcome of a general election. Many submitters said that if this one change was made many of their concerns about the bill would evaporate. Many groups such as the National Council of Women Greenpeace and the Coalition for Open Government have said that the changes made to the bill address their concerns. The product now is legislation that promotes freedom of expression by ensuring that a few wealthy individuals cannot use their money to buy an election and swamp the voice of ordinary New Zealanders. 
The committee has also recommended changes to the regulation of third parties. Key recommendations are an increase in the threshold for registration as a third party and an increase in the total expenditure cap for third parties. Any third party that wishes to engage in election advertising will need to register with the Electoral Commission if it plans to spend more than $12000 during a regulated period. In addition third parties will be able to participate in our electoral system and will be permitted to spend $120000. These are important changes. These new levels represent a reasonable balance between the ability of third parties to participate in the electoral process in an open manner and ensuring that wealthy interests do not exercise disproportionate influence so that a few can use their money to buy an election. Amendments are also recommended to ensure that young people under the age of 18 can be involved in the electoral process through the third party regime. Young people should be encouraged to participate in our democratic processes and I thank the committee for addressing this important issue. 
In respect of the donations regime the committee has also proposed strict new rules on political funding. These are important and far-sighted changes. The overwhelming message in submissions to the committee was that the public want much stricter rules in this area. Ultimately greater transparency about the sources of political funding will lead to increasing public confidence in our democracy. The Government supports the committee’s proposals. First there is to be a ban on anonymous political donations over $1000 made directly to the candidate the party or the third party. This will prevent significant anonymous donations from being made directly to political parties candidates or third parties. Alongside this the committee has recommended that where a person wishes to make an anonymous donation of greater than $1000 to a political party or third party it must be passed through the Electoral Commission to ensure that the donation is truly anonymous. Donations made in this way will be subjected to overall caps. Thirdly a ban on political donations over $1000 from overseas persons has been recommended. This is very important as it means that the influence of foreign money on our electoral processes will be kept to a minimum. Finally the committee has recommended stricter disclosure rules for donations from secret trusts which was a subject raised across a very large number of submissions. 
The committee has not recommended any change to the regulated period proposed in the bill which will run from 1 January where the polling day falls after 31 March in the third year of the electoral term. The Government considers this to be a very important part of the bill as a whole. It will address a significant weakness in the Electoral Act where following the announcement of a general election a 3-month regulated period applies for the 3 months preceding the polling day which effectively creates an incentive for political parties and third parties to undertake significant election activity during the time before the regulated period begins. This effectively allows wealthy individuals to start campaigning long before an election without that expenditure being recorded in a return. The approach in the bill also has the advantage of certainty as it will be clear to all participants when the regulated period commences. Election year is election year and people will know that from 1 January the rules in the bill will apply. 
Many of the concerns and submissions about the regulated period in the bill were closely associated with a broad definition of “election advertisement”. People said that a long regulated period combined with a broad definition of election advertisement might be problematic. The concerns in the submissions are therefore substantially addressed by the committee’s recommendation to narrow the definition of election advertisement and many submitters—the Coalition for Open Government is one example—have publicly recognised that since the bill was reported back. 
In relation to MPs acting in their capacity as MPs I recognise that aspects of the bill as reported back present interpretative and practical challenges. For instance the Electoral Commission and the Chief Electoral Officer both want clarification in the bill of the term “in his or her capacity as a member of Parliament”. There is no doubt that much of what members do is about serving and communicating with the electorate that put them there and not about persuading it to return them to office. The phrase about an MP acting “in his or her capacity as a member of Parliament” is used in other legislation so to define it in this bill may have unintended consequences elsewhere. The select committee attempted to address this issue through its commentary but the general thrust may still be open to interpretative difficulties. None of us want to see the Americanisation of election campaigns where elections become something fought through the courts rather than focused on record policy and leadership. In my view “capacity as a member of Parliament” refers to our participation in the business of the House and electorate and in other representational duties and to our work in our capacity as members of the executive or as Opposition spokespersons to the extent that that interacts with the business of the current Parliament and excludes statements of policy made outside the House that are intended to be enacted by a future Parliament. 
Another issue is the commentary on the inducement to vote. In my view an inducement to vote exists only when a policy statement is tied explicitly by the member to voting the election or an electoral outcome. I certainly expect electoral agencies to consult with Officers of Parliament and issue guidance on the practical applications of this definition. 
The penalties for corrupt practices have also been changed in this bill. Again a strong message came through in the submissions that penalties for serious electoral offending should be much higher. The committee has therefore recommended that a maximum term of imprisonment for a corrupt practice should be increased from 1 year to 2 years and that there should be a maximum fine increase to $100000 for party secretaries and financial agents. 
In conclusion I say that this bill will restore confidence in a fair and transparent electoral process in time for the next election.