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A new amendment to the Electoral Act promises to close the loophole exposed in the recent court case on the NZ First Foundation, which allowed an entity at arms-length from the NZ First party to take donations without disclosing the donors.
Justice minister Kiri Allan announced the changes to the Electoral Amendment Bill this morning. She said they are designed to ensure "greater transparency around political donations" in wake of the court case.
In July, the High Court in Auckland acquitted two people charged over donations received by the NZ First Foundation that were not disclosed as party donations.
The court ruling said that was because the donations were never passed on to the party, so did not meet the definition of being a "party donation" under electoral law.
Last month, the Serious Fraud Office sought leave to appeal the decision.
"The Deputy-Solicitor General consented to a leave application being brought and today, Crown Law filed a Notice for Leave to Appeal with the Court of Appeal," an August 19 SFO press statement said.
"No further comment will be made while the matter is before the court."
Allan, who told the Herald last month she would address the matter, today said the loophole had enabled third parties not involved in a political party's governance and management to receive donations for the party without having to declare it.
The amendment clarified the definition of a party donation to be "when a person donates to a political party or any other person with the intention that the donation is for the benefit of the party".
"The change backs up the [Electoral Amendment Bill's] original purpose of improving the transparency and disclosure of political donations," Allan said.
"Without this change, an opportunity could exist for political parties to structure their financial affairs in a way that allows them to legally avoid having to disclose their political donations."
A report on the Bill to the House was due by December 5. Photo / Mark Mitchell
A maximum fine of $40,000 was also proposed for people who did not "transmit" a candidate or party donation to said candidate or party within 10 working days.
Those charged with the offence could argue they had a "reasonable excuse" that led to non-compliance.
Allan said she had asked the bill's select committee to consider re-opening submissions and encouraged electoral law experts and political parties to provide input.
With a report on the bill due to the House by December 5, Allan said it was necessary to close the loophole prior to next year's general election.
"Donations are a legitimate form of political participation, but it's also important that there is transparency and for the public to know who is making significant donations to political parties."
Green Party electoral reform spokesperson Golriz Ghahraman welcomed the amendment but said it should go further.
"The law still protects donations from disclosure if they are given to the Electoral Commission first. When this happens, the commission is able to hand over the donations - regardless of the amount - anonymously to political parties," she said.
"My Strengthening Democracy Bill would close this loophole - and if the Government doesn't support it at first reading then we'll look to close the remaining loopholes by tabling an amendment to the Government's bill."
Ghahraman's bill, which was yet to make it to the House, included lowering the disclosure threshold for donations to $1000 and putting a $35,000 cap on annual donations.
Labour had been lukewarm on the bill, noting that its own electoral law reforms had already implemented or would consider implementing many of the changes Ghahraman has proposed. It has restored some prisoner voting rights and banned overseas donations over $50.
