To fund or not — that is the curly question

The events of last week have left a number of talking points for New Zealand politics, not the least being public funding of political parties. The unedifying recording of the National Party leader discussing what might be done with a $100,000 donation said to have been received from a wealthy recent immigrant, raises anew whether it is time to relieve all political parties of the need to raise their own finance.

To be effective, the proposal would need to go further than relieving them of the need. It would need to become illegal for parties to accept donations, otherwise parties that could raise additional funds would do so no matter how much they received from the public purse.

Possibly parties could be permitted to accept private contributions up to a legislated limit but that would invite the sort of deceptive splitting of large donations that is said to be already done to avoid public disclosure of the donor’s identity.

Police are investigating whether that was done with the donation discussed in last week’s disclosure but it was not the first time recently that such an accusation had been made. Whatever the investigation discovers, it might be time to remove the temptation. Would it matter if political parties had to be entirely funded from taxation?

Many would be opposed because they do not like the idea of their taxes going to parties they do not support, and because they like to think political parties are self-supporting organisations independent of the state. It certainly seems healthy that they should be independent, so long as the public knows who is financing them.

But those objecting to the use of their taxes might be surprised to know how heavily parties are already financed from the public purse. The broadcasting grants they receive for advertising in the weeks before a general election are only the most obvious form of public funding. Much greater sums go to parties that get into Parliament. They receive policy research staff, political and media staff, electorate offices and unlimited travel for list and electorate MPs, all provided by taxpayers.

And rightly so. A well-governed democracy depends on political parties. They present voters with organised and disciplined teams of candidates capable of forming stable and effective governments. It is in the public interest that the parties are well informed and capable of helping the public understand and debate important policies and the nation’s condition.

The disadvantage of public funding is that these benefits are not available to parties outside Parliament. It becomes harder for new parties to form and compete with those that have gained a foothold in the system. If the law was to forbid private donations, an exemption or a provision would have to be made for parties not in Parliament and where would that line be drawn?

Exclusive public funding of parties could make the incumbents more comfortable and deprive our politics of some of the challenges, changes and dynamism a democracy needs. It requires careful thought.