27 Jul 2022

Govt seeks advice on changing party donation laws

8:36 am on 27 July 2022

The government is seeking urgent advice on immediate changes to the electoral law on donations to political parties.

Kiri Allan

Justice Minister Kiri Allan is expediting advice on the electoral law to see if it can be tightened up in time for the 2023 election. Photo: RNZ / Samuel Rillstone

It follows the New Zealand First Foundation case, which ended in an acquittal that shows shadow entities can bankroll parties without having to identify donors.

One legal expert has called on the government to fix the loophole before next year's general election, but the prime minister doubted there would be enough time.

Justice Minister Kiri Allan is now expediting official advice on the electoral law to see if it can be tightened up in time for Election 2023.

"I'm definitely taking a very close look at this because transparency is key," Allan said.

"What we do know though is that whatever reforms we make in this area we don't want to make a brash job of it. It needs to be done right so that's essentially the guts of the advice that I'm seeking right now."

The government already has a bill before the House, the Electoral Amendment Act 2022, to strengthen electoral law, like lowering the dollar threshold at which donations have to be declared.

Critics have argued this is a prime vehicle to redefine what constitutes a 'party donation' to ensure political parties can't be bankrolled by secret donors.

Last month, the High Court heard evidence money was flowing into the New Zealand First Foundation at a time the New Zealand First Party was broke.

Some of the money was used to pay for campaign expenses for the 2017 Election, which saw Winston Peters emerge as kingmaker and pick Labour to form a government.

Prime Minister Jacinda Ardern grimaced yesterday, when asked if she's reflected on whether the opposition to a capital gains tax may have been bought.

"It reinforces for me the importance of transparency in our system, which we are working very hard to ensure we improve," she said.

"There's lots of things that I reflect on in politics and will continue to do so but for me I've got to take the lessons and make sure that we do our bit to improve the system."

ACT Party leader David Seymour said if Winston Peters didn't know about $750,000 worth of money flowing into the foundation he owes everyone an explanation.

"I can tell you, if someone wants to give $750,000 to the ACT Party I would be aware of it. It beggars belief that Winston Peters wasn't and I think he should front and explain what went on."

It wasn't clear from last month's trial exactly how much Peters knew about the foundation's activities.

He was never called to answer questions but now says he was aware money was flowing into the foundation.

"Of course, I was and at no point did I not say that. What I said though was that what we have done has been strictly to abide by the law and there's no loophole in the law."

Legal experts disagree with Peters' assessment and it's now up to officials advising the Justice Minister to report back on any quick fixes on electoral law.

It may be some weeks before the Serious Fraud Office decides if it will appeal the decision in the New Zealand First Foundation case.