Politicians must pick up pace on donations reform

It's clear that New Zealand’s laws governing political donations need change - but any overhaul before the 2020 election will require politicians to pick up the pace, Sam Sachdeva writes.

In one sense, the news of a National MP’s apparent involvement in a $150,000 donation from a Chinese-owned company could be seen as unremarkable.

After all, both the contribution and its source - the Inner Mongolia Rider Horse Industry NZ, owned by Chinese citizen Lin Lang - were made public well before the 2017 election, while there is no suggestion that Todd McClay or his party has breached any law.

But the NZ Herald’s reporting on the issue is illuminating, not for the revelation of any illegal activity but in shining a light on what can - and should - qualify as a legal donation in New Zealand politics.

At a time when foreign interference in domestic politics is a topic of both worldwide interest and a parliamentary inquiry here at home, allowing foreign-owned but New Zealand-domiciled businesses to fund parties without significant safeguards is an obvious loophole in need of closure.

As Prime Minister Jacinda Ardern said when asked about the issue, such donations would seem to many to be against the spirit of the law.

Senior National MP and electoral reform spokesman Nick Smith has also called for change, saying in January that only New Zealand citizens or permanent residents should be able to donate to political parties or candidates.

Of course, there is a bigger donations issue looming over National - the allegations levelled by ousted MP Jami-Lee Ross against his party and leader Simon Bridges over donations organised by Auckland businessman Zhang Yikun.

Bridges and National have denied the allegations, but with the Serious Fraud Office looking into the claims the party will be under the spotlight for some time yet.

While Labour does not appear to have received any donations of a similar nature in recent years, its hands are not entirely clean either.

As reported by Stuff before the last election, the party has received tens of thousands of dollars through the auction of art at over-inflated prices, naming the artist as the donor rather than the person forking out the money - something which also seems to breach the spirit if not the letter of the law.

A parliamentary inquiry into foreign interference has been dogged by dysfunction since it launched last year. Photo: Lynn Grieveson.

That change is needed seems clear - exactly what change, and when, is another matter altogether.

Parliament’s justice committee is carrying out an inquiry into foreign interference into New Zealand’s electoral processes but has seemed dogged by dysfunction, onto its sixth chair in less than four months and with little to show about a year after it began its work.

Justice Minister Andrew Little has indicated he is willing to move without the committee if it continues to drag its feet, while on National’s side Smith has raised the idea of working with Little on a bipartisan basis to speed up reforms.

The alternative, heading into a national election with numerous holes in our laws pointed out but nothing done to patch them up, seems unpalatable to say the least.

MPs received a reminder of the stakes when New Zealand’s spy agency heads appeared before the foreign interference inquiry for a second time, asked to provide more information on their investigation processes and what mechanisms could be put in place to prevent interference.

NZSIS director Rebecca Kitteridge suggested a ban on foreign donations would not by itself prevent interference, but that it could be part of more stringent disclosure requirements to help intelligence officials trace donations.

Kitteridge and her GCSB counterpart Andrew Hampton seemed reluctant to provide much more policy advice on changes, but the most intriguing questions and answers would have taken place behind closed doors.

Bringing donations out into the open before 2020, however, will require more urgency than politicians have shown so far.

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