September 29, 2022

Greater transparency ensured for political party donations

  • Amendment clarifies definition of ‘party donation’ in Elections Act 1993
  • Adds an offense for failing to comply with the existing obligation to convey a political donation to the intended recipient
  • The change will not apply to ongoing legal proceedings
  • The government is introducing some amendments to the Electoral Amendment Bill to ensure greater transparency around political donations, following the New Zealand First Foundation High Court case.

    The High Court recently determined that a person who receives a donation must be involved in “the governance and management of all Party affairs” for it to be considered a “Party donation”.

    This paved the way for third parties not involved in the governance and management of a political party to receive donations for the benefit of the party without having to declare it.

    “These amendments remove any ambiguity about what a donation to a political party is supposed to be,” Justice Minister Kiri Allan said.

    “The amendment clarifies that a donation to a party is when a person makes a donation to a political party or any other person with the intention that the donation will be for the benefit of the party.

    “The change confirms the original intent of the bill to improve transparency and disclosure of political donations.

    “Without this change, an opportunity may exist for political parties to structure their financial affairs in a way that allows them to legally avoid having to disclose their political donations.

    “It is important to fix this before the 2023 general election. Donations are a legitimate form of political participation, but it is also important that there is transparency and that the public knows who is making significant donations to parties. policies,” said Kiri Allan.

    The amendments also add an offense to the Act. Currently, the Act requires anyone to whom a candidate and party donation is sent to forward it to the candidate or party secretary within 10 business days. However, if they fail to do so, there is no corresponding offense in the Act.

    The maximum fine for which a person is liable under this new offense is $40,000. A full defense is available to any accused person if they can show they had a “reasonable excuse” for non-compliance. It is consistent with other statutory offenses for similar behavior.

    “These amendments provide a narrow and targeted solution to the flaw identified in the recent High Court decision,” Kiri Allan said.

    “There will be an opportunity for comments and submissions. I asked the special committee to consider reopening submissions on the bill, to ensure that the changes do not have unintended consequences. The government encourages experts in the field of electoral law and political parties to engage in this process.

    The amendments were presented in a Supplementary Order Paper which the Justice Committee will consider as part of its study of the bill.

    The committee must report the bill to the House of Representatives by December 5. The bill is expected to be enacted in time for the 2023 general election.

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