Editorial: Private cash must not be driven away

Opinion

It is a shame the country's biggest listed company is to stop making donations to political parties. Other businesses, encouraged by shareholders who see no gain in the practice, are sure to follow Telecom's example. Some parties will take the opportunity to cry poverty. And Labour will see it as added ammunition for a trip down the dead-end street of state-funded parties.

Telecom's decision is more unfortunate because the company represented the acceptable face of corporate donation. Last year, for the first time, it declared what it had donated in an effort to avoid suggestions of policy influence. It also gave without favour, giving $50,000 each to Labour and National, and $10,000 each to five minor parties.

Such openness is admirable. Democracy demands transparency, and all donations should have to be declared. Anonymity fuels rumour and suspicion, even if wads of money given to a party have never guaranteed power.

Legislating against anonymous donations would mean some cash stayed in wallets. Transparency invites attention, as was the case for Telecom, despite its even-handed approach. This, in turn, activated shareholders who clearly felt that company money given on the basis of underpinning a stable democracy was a woolly concept. Far better if the money was used for business development or returned to their pockets.

That is reasonable enough, as is Labour Party president Mike Williams' prediction that it was a sign of things to come. If so, he will see a stronger case for state funding of parties, especially when the drop in corporate cash is stirred in with the Exclusive Brethren's support for the National Party and the general nastiness pervading politics. But such a step would have serious detrimental consequences.

Most fundamentally, it would make Parliament even more of a closed shop. The only possible measure of state funding would be the level of support a party had at the previous election. This would make it extremely difficult for a new party to break into Parliament. The present elite would be confirmed, and that is not a recipe for new ideas and innovation.

To a certain degree, this is occurring now. Most resources provided to parties come from the state through the back door of extensive parliamentary funding. This permeates the system, travelling beyond the walls of Parliament to electorates, where party-paid organisers have given way to electorate agents, paid for by the Parliamentary Service.

Armed with this money, parties depend far less on members for support. But they rely far more on parliamentary representation for their survival. Elections are a time of desperation, especially for minor parties.

It says much about the perils of state funding, even in the current moderate form, that only one new party has made it into Parliament since MMP was introduced. That was Act, which was backed by wealthy individuals. No other party has found a way to contend with the taxpayer-financed resources at the beck and call of MPs.

Act has struggled, even though it has been bankrolled by private donors, the very thing Labour would cite as a justification for state funding.

Telecom's decision is also unfortunate in its timing. In the present climate, it invites a reaction. But state funding of parties would merely encourage even greater public cynicism about MPs, their means and their motives. It is far better to have a transparent process with the emphasis on donations from party members, the public and organisations. That is a more difficult proposition, perhaps, but also a much healthier one.