Analysis: Money can’t buy elections, but this week’s political donation disclosures show 16.5 million reasons why it’s really helpful.
While the left outdid the right when it comes to the number of small donations, people power is no match for big business, with the right bloc – particularly National – surging ahead with the help of mega donors.
The figures released by the Electoral Commission on Friday provide the most detailed breakdown of political party donations the public has ever seen.
National’s election year war chest came to $10.4 million, more than double the amount raised by any other political party, and believed to be the most taken by a political party in one year.
While National has always been an effective fundraiser, thanks to businesses with deep pockets favouring the centre-right party, this is a big step up from its previous election year hauls ($2.8m in 2020; $4.58m in 2017; and $3.84m in 2014).
In just the past three years, National has raised a total of $16.5m – not far off the $19m it raised in the previous nine years, showing it’s increasingly attracting more money.
Meanwhile, the Act Party raised $4.26m and NZ First brought in $1.88m.
In total, the now-coalition parties raised $16.52m, compared to the left bloc’s $8.24m.
During the past three years, the right has brought in two-and-a-half times more money than the left. National and Act’s combined fundraising brought in $23.5m during the last election cycle, while Labour and the Greens brought in $9.5m.
In 2023, Labour raised $4.77m; the Greens $3.31m; and Te Pāti Māori raised just $160,749.58 – a sizeable chunk of that from a one-off $50,000 donation from party president John Tamihere.
Right-wing parties’ superior fundraising efforts are nothing new. This trend has been exacerbated by a hollowing-out of party membership, and a reliance on large donations over a steady stream of smaller donations.
But that doesn’t tell the whole story.
In 2023 – following rule changes – donations under $5000 were included in parties’ public disclosures.
This has revealed that while the left – particularly Labour – received the bulk of its election year donations in small amounts, it was nowhere near enough to compete with the right bloc’s big-money donors.
Each election, the Labour Party stresses the point that it’s not quite as hard-up as some may think – it’s fundraising efforts are centred around bringing in small donations from a larger group of people; a more grassroots approach.
For the first time, Kiwis get to see the number on this laid bare.
In 2023, Labour received 53,576 donations under $5000, compared to National’s 43,999, the Greens’ 33,954, Act’s 7163 and NZ First’s 2235.
Among those small donors doing the heavy lifting are Labour Party MPs. While the Green Party’s tithing policy is well known, Labour doesn’t have a set policy on its caucus members donating a portion of their salary.
Labour Party general secretary Rob Salmond tells Newsroom the party has been doing this for years – each year the caucus votes on whether MPs will put their money where their mouths are. The public doesn’t usually see these ‘donations’ in the party’s disclosures, as each of the donations (usually paid fortnightly) fall below the $5000 threshold.
And with the MP pay increase around the corner, left-wing political parties will be in for a little boost.
Despite Labour’s high number of small donations, the value of these donations amounted to just $2.89m, compared to National’s $6m in donations under $5000.
Meanwhile, National received a whopping 48 donations worth $20,000 or more, Act brought in 36 and NZ First received 17. Among National’s haul of mega-donations was a record-breaking $500,000 cheque from building systems business owner Warren Lewis.
Labour received 14 donations worth $20,000 or more, the Greens 15, and Te Pāti Māori just that one big donation from Tamihere.
Despite having a higher number of small donations, it’d take a tidal wave of donors for the left to compete with the right’s haul from fewer, bigger donors.
These figures have experts renewing their calls to cap the amount an individual or business can donate, in an attempt to level the playing field.
Max Rashbrooke, a Victoria University academic who analyses publicly available Electoral Commission data and is co-author of Money for SomethingEditSign, tells Newsroom that while the relationship between political donations and election outcomes is complicated, a series of international studies show “an extra dollar in revenue translates to extra votes”.
Data from the 1996 US senate elections showed both incumbent and challenger advertising had an effect on individual voting behaviour. Other recent US research found that spending on messages targeting voters has a significant effect on their support for candidates. The researcher, Steven Schuster, argues that spending was “especially effective in changing the composition of voters, instead of convincing potential voters to switch their vote”.
Meanwhile, in September 2022, the Economist surveyed recent US data showing that better-than-average fundraising is a strong predictor of better-than-average electoral success, concluding: “Money still matters”.
Using data from all French legislative and UK general elections from 1993 to 2017, researchers found that in both countries, an increase in spending per voter consistently improves candidates’ vote share. Separately, these same researchers found “a strong positive correlation between expenditures and votes” in the United Kingdom.
And in Australia, think tank the Grattan Institute found that during the past five federal elections, the party with the biggest war chest tended to form government.
A similar connection could be made in New Zealand: In 2017, National received $4.58m in donations and 44.45 percent of the vote, compared to Labour’s $1.61m and 36.9 percent.
Last year’s election followed the same path.
Of course, there isn’t always a direct link. In 2020, the Nats raised $2.8m (a significant drop compared to the party’s efforts on other recent elections) compared with Labour’s $1.51m.
But Jacinda Ardern’s popularity, off the back of the heady early days of the Covid-19 pandemic, gave Labour a significant (and unusual) advantage over National and Judith Collins during that election.
“It’s not much good having a weak candidate, and a weak party, with a weak message, and lots of money. But if you have a good candidate, and a good party, with a strong message, then money can make a real difference,” Rashbrooke says.
Donation caps and disclosure rules are a perennial bugbear of political academics, anti-corruption campaigners, and almost anyone who doesn’t belong to a political party likely to make it into power.
There are questions around whether money buys access (most experts say ‘yes’, while politicians insist Aotearoa is an equal opportunity system where all constituents can get a meeting with their local MP). There have been issues with donations from overseas, party spending limits, the influence of third-party groups, and donations protected from disclosure.
But without a high-profile scandal, there’s often very little political appetite to make changes.
The release of last year’s figures show the way the left raises its money and the level of donations its core voters can afford cannot compete with the deep pockets of the right. Some form of intervention or rule change will likely be the only way to level the playing field.
When political parties are trying to squeeze everything they can from every dollar, one large donation can have a disproportionate effect on the election outcome. Especially if that donation is worth $500,000.
In election years, party money is used for obvious things like hoardings and flyers, but it’s also used for expensive (but crucial) polling, campaign strategists, policy experts, social media advertising, and the experts that design parties’ online campaigns – think Lever Communications and Topham Guerin.
There is now a cap on what parties can spend during an election year, and a requirement to lay out how that money is spent, but some costs aren’t covered by the disclosure rules, such as spending on polling or wages.
Party insiders have suggested that while the Electoral Commission documents show Labour out-spent National during last year’s election ($3.51m versus $2.55m) those figures don’t capture everything National actually spent – a quirk of the country’s donation disclosure regime.
Rashbrooke and his colleague Lisa Marriott recommend a $15,000 cap per year per donor, while the Independent Electoral Review Panel, which released its final report earlier this yearEditSign, recommends a $30,000 cap per person per electoral cycle.
“There’s an intellectual consensus about where the limit should be. The problem is we don’t have any political will to move on that,” Rashbrooke says.
The fun bits
Act
- Act’s return includes a $13,875 donation from Sean Colgan, the businessman who loaned Act leader David Seymour a plane, dubbed Flying Pinky, which he used as an election campaign gimmick;
- Pavlovich Coachlines, which provided the large pink bus Act used, gave $18,000. Bernard Pavlovich made separate financial donations totalling $6000;
- Controversial sailor Sir Russell Coutts gave $11,000, and Wellington-based Caniwi Capital founder Troy Bowker gave $15,000. Bowker’s name made it to the headlines when it was revealed former Labour MP Stuart Nash provided the donor with priviledged Cabinet information;
- Already-disclosed donations from rich listers include: Graeme Hart, Trevor Farmer, Align Farm Investments, Peter Huljich’s Christopher and Banks, Murray Chandler, David Richwhite and Neale Underdownl;
- Its largest donation was from regular Act backer, Dame Jenny Gibbs ($155,000).
Freedom NZ
- Far-right Freedoms NZ received $66,000 in donations from Brian Tamaki’s Vision NZ, when the fringe right-wing parties planned to come together under the Freedoms NZ umbrella;
- Separately, Tamaki donated $15,000.
The Green Party
- The Greens recorded regular tithes from MPs, with most giving close to $20,000, while the co-leaders gave close to $30,000;
- NBR richlister, Murray Holdaway, donated $10,500;
- Titanic and Avatar director James Cameron and actor Suzy Cameron jointly gave $50,000;
- Mark Todd and Phillip Mills, who also donated to Labour, gave $20,000 and $50,000 respectively;
- South Island knitting company, Weft, gave $100,000;
- The Greens recorded three overseas donations. Michael Myer, head of Australian pumped hydro company Sunshine Hydro, donated $175 – in accordance with the new overseas donation laws, the party returned $125 of the donation.
Labour
- The party’s largest donation came from Dunedin librarian Islay Little, who gave $110,442 in instalments
- Former Prime Minister and Labour leader Dame Jacinda Ardern made regular donations worth $13,954;
- Current leader Chris Hipkins donated $22,790, while deputy Carmel Sepuloni donated $14,336.82. The rest of the caucus donated between $5000 and $12,000;
- Artist Dick Frizzell gave $13,850 – likely the donation of an artwork for the party’s fundraising auction;
- Property developer Mark Todd gave $50,000; and gym entrepreneur Phillip Mills gave $50,000;
- Former MP Pete Hodgson donated $24,912;
- Former Prime Minister Helen Clark gave $11,200.
National
- National returned its second-largest donation – worth $200,000 – the day after a Newsroom story, which linked the donor to a migrant hostel investigation that subsequently found no breaches;
- National’s largest donation was $500,000 from Auckland businessman Warren Lewis, which was disclosed in June. Its second largest was from Graeme Hart’s Rank Group ($150,000);
- National’s donation disclosures read like the who’s who of richlisters, including: Richard Balcombe-Langridge ($14,740); Brett Russell ($11,620); shipping magnate Mark Ching ($13,500), businessman Garth Barfoot ($20,000); BBQ Factory founder Roger Richwhite ($10,000); prominent Auckland restaurateur and one-time mayoral hopeful Leo Molloy ($18,950); businessman and philanthropist Walter Yovich ($20,000); Xero founder Rod Drury ($13,500); former Fisher & Paykel chief executive John Bongard ($18,410); and former cricketer Greg Loveridge ($15,800);
- The late philanthropist Richard Izard, who died earlier this year, donated $11,829, and the estate of former politician and sportsman Harold Russell gave $8600;
- AJR Finance, whose director has links to a quarrying company that was among those sent letters about the Government’s proposed fast-track consenting process, gave $20,000. The company also donated $55,000 to NZ First;
- Bayley Corporation gave $7200; Fletcher Building gave $7200; Forsyth Barr gave $7200; Gibbston Valley Wines donated $13,082;
- Former MP Hamish Walker donated $11,600;
- Hamilton-based Montana Catering donated $17,848.80 across nine instalments. The company is one of the businesses with a contract for the Ka Ora, Ka Ako school lunch programme
- National also took in $363,000 as donations protected from disclosure – donations which are sent to the Electoral Commission to pass on to the parties without telling them who the donors are. $130,000 of that came from one source. The total amount in undisclosed donations a party is allowed to receive is $373,520
NZ First
- NZ First received $200,000 from richlister property developer Mark Wyborn, across three instalments – the party’s highest donation.
- A total of $182,167 came from the estate of Hugh Barr, an environmentalist and tramper who died in 2021;
- Vlad Barbalich, a Wellington property developer who formerly supported and helped fund defunct political party Democracy NZ, gave $145,000;
- Billionaire Graeme Hart’s Rank Group Limited contributed $110,000 in two separate donations;
- Andrew Krukziener, of Krukziener Properties, donated $19,999 in December after NZ First returned to Government. Given his donation was under $20,000, it wasn’t publicly disclosed when it was donated (during election year);
- Former Labour minister Clayton Cosgrove donated $6000 through his company, Cosgrove and Partners Ltd;
- NZ First also recorded two loans last year: $180,000 from Shane Jones’ partner, Dot Jones; and $75,000 from MP Mark Patterson and his partner, Jude;
NZ Loyal
- All of Liz Gunn’s party’s donations over $5000 came from one woman: Lesley Adriaens. The Christchurch woman donated four times, totalling $11,666.83.
Te Pāti Māori
- Te Pāti was a standout in that its donations decreased compared to last election. Its largest single donation came from party president John Tamihere ($15,000).
TOP
- TOP received donations from just two donors: Aucklander David Mahon ($5278.46) and TOP’s Lower Hutt candidate Ben Wylie-van Eerd ($6098.20).
Vision NZ
- Brian Tamaki’s Vision NZ received a $10,000 donation from Raymond “Tiny” Deane. A Sunday expose revealed Deane’s security firm was knowingly employing people with gang affiliations, and using threatening and intimidating behaviour towards emergency housing tenants. He has since been fined and barred from working in security management.
The post Political donations: people power no match for big business appeared first on Newsroom.