KEY POINTS:
What the Electoral Finance Bill does
The bill tightens the law governing the way money is raised and spent on elections. It affects political parties, individual candidates and non-party groups (third parties) such as Forest & Bird and individuals outside Parliament who want to participate in democratic
debate relating to the election process.
Current rules
* Spending limits on political parties are imposed three months before an election.
* The cost of advertising by third parties/non-parliamentary interest groups in support of a party is counted against the party's expenses.
* The cost of attack advertising by third parties is not counted against any party's expenses and is limitless.
* A candidate can spend no more than $20,000 in an electorate and a party can spend no more than $1 million or, if contesting all seats, can spend no more that $2.4 million in the three months before an election.
* Donations of over $10,000 to parties or over $1000 to a candidate must be declared. Donations through trusts are not deemed to be anonymous.
The bill
* Stretches regulated period to start on January 1 of election year.
* Widens definition of election advertising to virtually any view expressed.
* Requires third parties to apply for registration to Chief Electoral Officer if they plan to spend more than $5000 nationally and limits spending to $60,000 nationally or $2000 in an electorate.
* Requires groups who advertise politically but intend to spend less than $5000 to sign a statutory declaration.
* Introduces anonymous donation limits to non-party groups but not to political parties and requires all non-parties to forfeit anonymous donations over $500.
* Non-parties required to declare all donations over $500.
* No major change to political party donations law: requires donations to parties over $10,000 to be disclosed and to candidates of more than $1000.
* Requires donations to parties of more than $20,000 by the same source cumulatively in one year to be declared.
What was taken out
The policy paper that the Cabinet approved this year was substantially different from the bill that was introduced to Parliament in July.
* It limited anonymous donations, including to $5000, and banned political donations from foreign sources except expatriate New Zealanders.
* It lowered the threshold of donations requiring disclosure from $10,000 to $5000 for political parties and from $1000 to $500 for candidates.
* It set out a formula for state funding of political parties ($2 for each party vote received up to 20 per cent of the total party vote, and $1 after that to a cap of 30 per cent) that would have given Labour and National $1.14 million each for next year's election.
Labour could not find enough votes for the state-funding provision. So it dropped the provisions for greater transparency of political donations but placed restrictions on donations to non-party players that will register as third parties.
Probable changes to the bill
* The definition of advertising will not be so sweeping but any publicity produced by a government department could be exempted from the definition.
* Some limits on anonymous and trust donations to parties may be introduced, may be a maximum amount, or a maximum percentage, but nothing like as major as the transparency provisions taken out of the final draft.
* Spending caps on registered non-political third parties in the regulated period will be lifted.
* Statutory declarations for low-spending lobbyists dropped.
What's wrong with the bill
It rewrites election laws in a partisan way.
New Zealand does not have a written constitution. It has a series of acts and conventions which make up our unwritten constitution. Electoral law is part of this, so it is usually changed in a bipartisan process - but not this time.
It expands the regulated spending period to almost a year.
The regulated period on free speech would expand from three months before an election to start on January 1 of election year - almost a third of the election cycle.
It doesn't apply the same rules fairly.
The bill imposes new anonymous donation disclosure requirements on interest groups - but not political parties.
It could push some interest groups out of politics altogether.
A complicated compliance regime is imposed on interest groups that want to participate in elections. This may put them off participating at all.
It tilts the playing field in favour of the Government.
The tighter restrictions on candidates' spending, seen in conjunction with the easing of parliamentary spending on communication, give sitting MPs an advantage.