Political donation laws: Justice Minister Kris Faafoi unveils electoral law reform

Justice Minister Kris Faafoi has unveiled plans to tighten political donations rules before the 2023 election and a wider review of election rules – including the length of the Parliamentary term – before the 2026 election.

Faafoi set out his plan for an independent review this morning, saying it was time for a thorough look at how MMP was working for the country rather than piecemeal changes.

It follows a Government promise to re-consider electoral laws, including the laws relating to donations and their disclosure, and some aspects of the MMP system.

The independent review panel will report back in late 2023 but no changes would be made before the 2026 election. It would look at issues including the length of the Parliamentary term, the voting age, and funding of political parties.

Faafoi also signalled some separate changes ahead of the 2023 election, including changes to donations rules.

“We are looking at improving the transparency of political donations to make it easier to see where the money is coming from.”

Another earlier change could include making it easier for voters to switch between the Māori and the General rolls – something Labour had committed it before the election, and in its cooperation agreement with the Green Party.

The independent panel would also look at proposed changes that have been recommended in the past by the Electoral Commission: the current five per cent threshold – the amount of support a political party must reach to get into Parliament – and the so-called coat-tailing rule that allows an MP who wins an electorate seat to bring in other MPs on the list, even if the party falls short of five per cent.

It would allow look at the ratio of list seats and electorate seats, and the overhang provision.

However, the review panel would not consider whether to scrap the MMP system, the future of the Māori electorates, local electoral laws, or any major constitutional change such as the path to becoming a republic.

Under the Electoral Act, measures such as changing the term of Parliament, the voting age, or the MMP voting system require either a public referendum or for at least 75 per cent of Parliament to support it.

Faafoi said he would consult with other parliamentary parties and the Justice and Electoral Select Committee before finalising the terms of reference for the review.

Earlier this year, Prime Minister Jacinda Ardern highlighted the donations rules as an area for potential change after the Serious Fraud Office began investigating donations made to several political parties.

Donations that have been probed by the SFO now include the Labour Party, National, the Māori Party, NZ First, and to the mayoral campaigns of both Christchurch Mayor Lianne Dalziel and Auckland Mayor Phil Goff.

Charges have been laid in the cases of the donations to National, Labour and the NZ First Foundation. Dalziel was cleared of any wrongdoing last December, while the investigation into Goff’s donations continues.

Ardern said back in April that while some of those issues had not implicated the parties themselves, it highlighted that the law needed to be looked at.

“I think that still is incumbent on us to go away and say this isn’t a good environment for anyone – for any political party, but also not for New Zealanders. They want to have confidence in the system so let’s look at the law.”

Changes repeatedly recommended by the Electoral Commission over the years have included the five per cent threshold – the amount of support a political party must reach to get into Parliament.

Another frequent target of critics of the current system is around the coat-tailing rule: a provision that allows an MP who wins an electorate seat to bring in other MPs on the list, even if the party falls short of five per cent.

Currently, that only applies to the Māori Party – it got 1.2 per cent support in the 2020 election but Deborah Ngarewa-Packer secured a list spot after her fellow co-leader Rawiri Waititi won back the Waiariki electorate.

The length of the Parliamentary term is another issue that is frequently raised.

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