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University of Otago Law Theses and Dissertations |
Last Updated: 25 September 2023
It Has My Vote
A Reform of New Zealand’s Electoral Financing Scheme
Laurie Duncan
A dissertation submitted in partial fulfilment of the degree of Bachelor of Laws (Honours) at the University of Otago – Te Whare Wānanga o Otāgo
October 2022
Acknowledgements
To my supervisor, Professor Margaret Briggs, thank you for your support and guidance, your insight into criminal law, helping me navigate the copious law changes and for your feedback on my ideas and drafts.
To my family, for always believing in me. In particular, to Ian for encouraging me to pursue law and to Alison for providing a constant source of inspiration and support.
To Jess and Samantha, thank you for proofreading this dissertation and for all of the conversations, study sessions and laughter we have shared throughout law school.
To all the people I’ve met and friends I’ve made on this journey at Otago, thank you. I will forever treasure the memories made here.
Table of Contents
Introduction
In a democratic system, variety in the political parties and candidates is crucial. All players in the electoral system require access to finances to run their parties and advertising campaigns, both during and outside the election season.1 In New Zealand, the only public resourcing for political campaigning is provided in a nominal broadcast allocation.2 Political financing is otherwise privately funded, meaning donations or loans are provided by members or groups within the public rather than from any pooled public fund or government handout.3 This provides an avenue for political participation through financial contributions. Electoral funding has been a heated topic in New Zealand since its inception and has seen several reforms over the decades.4 However, these reforms have not yet been successful in quashing unwanted behaviours that reduce the transparency.5 These unwanted behaviours have reared their head very noticeably in recent years, with three major political parties in New Zealand receiving criminal charges and undergoing trial.6Electoral financing runs a balancing act between supporting public transparency and political functionality. In a democratic, parliamentary system, these two purposes are crucial. However, they inherently conflict. Public transparency supports accountability and legitimacy of the electoral system whereas political functionality allows parties to operate efficiently and provides access to funding campaigns. Finding the appropriate junction between these purposes is the key focus of this dissertation. Ultimately, this dissertation asks what an effective political financing legislation framework should look like to account for both transparency to the public and financial benefit to political parties.
While it is recognised that New Zealand’s electoral law has several issues, this dissertation will focus on electoral financing. This piece will take a blue skies approach to consider potential options for reform and assess their viability in New Zealand before providing a final recommendation.
1 Christina Holtz-Bacha and Lynda Lee Kaid (eds) “Political Advertising in International Comparison” in The SAGE Handbook of Political Advertising (SAGE Publishing, Thousand Oaks, 2006) 2 at 3.
2 Andrew Geddis “Funding New Zealand’s Election Campaigns: recent stress points and potential responses” (2021) 17(2) PQ 9 at 12.
3 Electoral Act 1993, Part 6A and 6B.
4 Electoral Act 1893; Electoral Act 1993; Electoral Finance Act 2007.
5 Andrew Geddis “Rethinking the funding of New Zealand’s election campaigns” (2007) 3(1) PQ 3 at 3-4.
6 Serious Fraud Office “National Party Donations” (2021) <www.sfo.govt.nz>; Serious Fraud Office “NZ First Foundation & Others” (2020) <www.sfo.govt.nz>; Serious Fraud Office “Labour Party Donations” (2021)
<www.sfo.govt.nz>; New Zealand Herald “Māori Party donations referred to Serious Fraud Office” (28 April
2021) <www.nzherald.co.nz>.
While previous attempts have been made to reform, these have only patched specific holes in the current Electoral Act.7 I submit that patching holes in the current system is no longer enough. The electoral funding system has worn out at the knees and needs to be sized up and replaced. The system must be designed to ensure durability where issues have arisen in the past, and for overall strengthening to deal to issues which are yet to occur in New Zealand (or are known to occur).Due to the public nature of the issues in the current system, a panel has been established to consider New Zealand’s electoral law reform over the next two electoral periods.8 This dissertation’s practical solutions are targeted to provide recommendations for this panel. Electoral funding is an issue beyond simple legal comprehension but has direct implications to the democratic standing of New Zealand. It therefore requires a thorough analysis of the issues being dealt to and the implications of different solutions. This dissertation attempts to start this conversation.
This dissertation is structured as follows:
Chapter I outlines the history of New Zealand’s electoral legislation, recent cases that have highlighted further flaws the electoral financing system and the government departments and processes currently involved. Further, this chapter assesses the key purposes involved in this reform – public transparency and political functionality.
Chapter II discusses the current New Zealand position. I begin by reviewing the Electoral Finance Act, and then outline the Electoral Act’s relevant provisions for political financing, both for donations and loans.
Chapter III sets out the current reform process being undertaken by the Ministry of Justice. This establishes the background of this reform, the options considered and their assessment. It also considers the proposed Electoral Amendment Bill that resulted from this process.
Chapter IV assesses the fraudulent aspects of the political financing scheme. This first addresses whether fraud is the correct term for political financing wrongs and conclude that this is appropriate only where intentional deception occurs. Then, the Crimes Act and the
7 Electoral Amendment Act 2009 (2009 No 1); Electoral Amendment Act 2014 (2014 No 8).
8 Ministry of Justice “Initial Advice on Approach and Timing of Electoral Finance Work” (obtained under the Official Information Act 1982 request to the Ministerial Relations and Services, Ministry of Justice) at 2; Kris Faafoi “Government to review electoral law” (5 October 2021) Beehive <www.beehive.govt.nz>.
Electoral Act are compared and their use in prosecuting electoral financing breaches is assessed.Chapter V assesses three options for reform. First, a new offence schedule which recognises different offending tiers that could be reflected in different offence types, such as strict liability and mens rea provisions. Second, a government funded model of political financing. Finally, a government agency model which would deal to the administrative obligations and distribute financial contributions for political actors.
I ultimately conclude that New Zealand should establish a government agency to handle political financial regulation and distribution. This should occur alongside a reform of the electoral financing offences to create a mens rea offence and strict liability hierarchy.
Electoral financing law has never been more relevant in New Zealand and the fast-flowing waters in this area have meant that I have been unable to cover every element of proposed change. This dissertation was written while several crucial cases in this legal area were undergoing trial. Consequently, there are few primary resources and sparse commentary, meaning much of what follows is my own interpretation.
I Background
A History of Electoral Financing in New Zealand
Currently ranked first equal on the international anticorruption perception index, Aotearoa New Zealand is known for its public accountability.9 New Zealand’s electoral laws play a significant role in ensuring our electoral system is efficient and transparent to the public.10 General electoral laws were transported to New Zealand alongside various legislation imported from the United Kingdom.11 These have seen several major reforms during their journey. For example, New Zealand became the first nation to provide women the right to vote in 1893.12 Further, while not as ground-breaking, New Zealand more recently saw the removal of foreign donors from eligibility to donate more than $50 in December 2019.13 These changes supported two democratic foundations – firstly, that New Zealanders should determine their government as a collective, and secondly, that successful parties represent the people of New Zealand without the interference of external forces.14
The guiding provisions for electoral processes sit within the Electoral Act 1993.15 Prior to the current Act, the Electoral Act 1956 provided far less opportunity for government scrutiny, asking candidates and not parties to disclose their expenditure and donations.16 Even with these flimsy provisions, records for candidates often were not made in practice.17 Despite this, the 1986 Royal Commission on the Electoral System claimed the system “show[ed] no sign of corruption... and no excessive reliance by parties on a few special interest groups”.18
Following this report, the fourth Labour government was re-elected with a high rate of corporate donations – totalling over three million dollars.19 The link between these donations
9 Transparency International “Corruptions Perception Index: New Zealand” (2021) <www.transparency.org>.
13 Electoral Amendment Bill (No 2) 2019 (195-1), cl 5. 14 Ministry of Justice “Initial Advice”, above n 8, at 3. 15 For definitions, see Chapter II B 1 at 16.
16 Electoral Act 1956, s 133-139. Note that all currency provided is in New Zealand dollars unless otherwise stated.
17 Leonid Sirota "Review of In Search of Consensus: New Zealand’s Electoral Act 1956 and its Constitutional Legacy, by Elizabeth McLeay” (2018) 33(2) Australasian Parliamentary Review 174 at 176.
18 Electoral Commission Report of the Royal Commission on the Electoral System 1986, Towards a Better Democracy (Royal Commission, December 1986) at 183.
19 Max Rashbrooke “A brief history of New Zealand donations scandals” (4 March 2020) The Spinoff
<www.thespinoff.co.nz>; Bryce Edwards “Opinion: The money follows Labour again” (16 March 2018) Newsroom <https://www.newsroom.co.nz/>.
and the policies and asset sales implemented by the Labour Government garnered widespread concern.20 This coincided with economic stagnation for the nation and as political party membership decreased, the cost associated with elections increased to fill this membership gap.21 The new Electoral Act considered these issues and required parties disclose and identify the donor for all donations exceeding $10,000.22 While these provisions aimed to provide public disclosure and a check on any undue influence of the government, they were circumvented by both major parties.23 Examples include National channelling large anonymous donations through the Waitemata Trust and Labour through law firms.24 The Electoral Finance Act 2007 was implemented after this, and provided more onerous provisions for advertising and lobbying through financing.25 This will be discussed further in Chapter II.
While the Crimes Act 1961 is sometimes used an alternative to prosecuting electoral offences, the recent decision of R v EF and FG demonstrated that these issues have not been sufficiently dealt with under the Crimes Act.26 R v EF and FG concerned the NZ First Foundation, which was an off-the-books scheme. The Foundation was established to purchase capital assets to create an income stream for the NZ First Party but was instead used to fund the party’s political campaign.27 The NZ First Party’s secretary was never told about this money (totalling almost
$678,000 from 154 payments). Consequently, the donors’ identities were never disclosed to the Electoral Commission (the Commission) nor made publicly available.28 Under the Electoral Act, there are several disclosure requirements for party donations – including identifying donors above a certain threshold and the total number of donations under this threshold.29 Interestingly, the funds provided by the Foundation were determined not to be “donations” under the Electoral Act and the defendants were found not guilty of obtaining by
20 Ron Johnston and Charles Pattie “Money and votes: a New Zealand example” (2008) 27(1) Political Geogr 113 at 114; Lewis Verduyn “NZ Asset Sales Policy Began on Wall Street” (16 January 2012) Scoop Politics
<www.scoop.co.nz>; Rashbrooke “A brief history of New Zealand donations scandals”.
21 Simon Chapple, Cristhian Prieto Duran and Kate Prickett Political donations, party funding and trust in New Zealand: 2017 to 2021 (Victoria University of Wellington, Working Paper 21/14, November 2021) at 4-5.
22 Electoral Act 1993, ss 214F and 214G (amended).
23 Thomas Anderson and Simon Chapple Patterns of political donations in New Zealand under MMP: 1996-2019 (Victoria University of Wellington, Working Paper 20/05, November 2020) at 17 and 28; Rashbrooke “A brief history of New Zealand donations scandals”.
24 Anderson and Chapple Patterns of political donations in New Zealand at 17 and 28; Rashbrooke “A brief history of New Zealand donations scandals”.
25 Electoral Finance Act 2007, s 63-70.
26 R v EF and FG [2022] NZHC 1755 [22 July 2022]; Crimes Act 1961, s 240.
27 R v EF and FG at [22]-[23].
29 Electoral Act 1993, s 207C.
deception under s 240, Crimes Act.30 This was because the accused were held not to be “involved in the administration of the affairs of the party” at the time of receiving the money, despite their roles within NZ First.31 There is no general obligation on any person with knowledge to disclose a donor’s identity. This obligation is instead limited to “a candidate, list candidate, or any person involved in the administration of the affairs of a party”.32The decision in R v EF and FG publicly highlights the issues in the current system. Unfortunately, it also provides guidance for other donors to fund parties without any legal obligations to disclose this information.33 This would also allow parties to receive contributions from overseas persons, despite the legal limitations implemented in 2019.34 Clearly, despite several previous reforms, transparency is still at issue in political financing.
The Crown has since sought leave to appeal this decision. Further, Parliament has introduced a Supplementary Order Paper that amends the “party donation” definition to mean “any donation made to a party or any person(s)” if there are “reasonable grounds to believe that it is intended for the benefit of the party”.35 However, even the author of this amendment recognises that this provides a “narrow and targeted” solution to the donations loophole in the High Court decision.36
It is not enough to regulate political financing that is already declared in the current system as coming directly from the donor or lender. This simplistic approach would ignore the wide array of issues highlighted in past reviews and public commentary. This would also ignore the NZ First Foundation decision regarding funnelling donations through a separate entity, “independent” of the party so that the financers’ identities were not required to be disclosed to the Commission.37 These alternative ways of providing funds to political parties require change, particularly with clarification around what funds require disclosure and are subject to electoral laws.
33 Laurie Duncan “What the NZ First Foundation ‘not guilty’ verdict means for money in politics” (25 July 2022) The Spinoff <www.thespinoff.co.nz>.
34 Electoral Amendment Bill (No 2) 2019, above n 13.
35 Supplementary Order Paper 2022 (236) Electoral Amendment Bill 2022 (152-1), cl 3A.
36 Joshua Riddiford “’Party donation’ to be clarified” (8 September 2022) Capital Letter
37 R v EF and FG at [52] and [56].
The Commission is the governmental department with oversight and enforcement powers over electoral affairs.38 Their role includes guiding people to comply with electoral law, advising political parties’, candidates and third parties on how to comply with electoral law, and advising the government on proposed changes to electoral laws.39
The Serious Fraud Office (SFO) has jurisdiction to investigate and prosecute serious and complex financial bribery and corruption within New Zealand.40 Whilst introduced to deal with the serious financial crime uncovered following the 1987 stock market collapsed, the SFO has retained a steady flow of work for the past three decades.41 Their major cases have included diversion of public funds, investment fraud, and recently, electoral donation frauds.42
Mirroring its United Kingdom counterpart, the structure for SFO investigation teams is based on the Roskill Model.43 This Model formed from the Roskill Committee’s Report on Fraud Trials, which sought to improve the conduct of criminal fraud proceedings to ensure their “just, expeditious and economical disposal” by the Courts.44 Each case is run in a four-step process. Complaints are received (generally from other government departments or members of the public), and if the s 4 criteria that the Director has “reason to suspect an investigation may disclose serious or complex fraud” is passed, a Part 1 enquiry is opened.45 Reported frauds that do not reach this high threshold are often passed to the appropriate agencies (such as Inland Revenue or Immigration New Zealand).46 If the enquiry successfully meets the s 7 criteria of the Director having “reasonable grounds to believe that an offence involving serious or complex fraud may have been committed”, a full (Part 2) investigation is pursued and at the conclusion of the investigation, the decision rests with the Director whether to prosecute.47 Prosecutions are then conducted by the SFO Panel Counsel.48
38 Electoral Act 1993, s 4-9A.
39 Electoral Commission “Our roles and responsibilities” <www.elections.nz>.
40 Serious Fraud Office Act 1990, purpose.
41 Serious Fraud Office “What We Do” <www.sfo.govt.nz>.
42 Serious Fraud Office “What We Do”.
43 Serious Fraud Office “What We Do”.
44 Roderick Munday “The Roskill Report on Fraud Trials” (1986) 45(2) CLJ 175 at 175.
45 Serious Fraud Office Act 1990, s 4; Serious Fraud Office “Legislation” <www.sfo.govt.nz>; See Appendix 1.
46 Serious Fraud Office “What We Don’t Do” <www.sfo.govt.nz>.
47 Serious Fraud Office Act 1990, s 7; Serious Fraud Office “Legislation”; See Appendix 1.
48 Serious Fraud Office Act 1990, s 48.
The SFO recognises that they deal with a relatively small number of frauds, however these cases have a disproportionately high impact. In 2022, of the 981 complaints they received over the previous year, only 22 complaints became Part 1 enquiries and only 11 advanced to a full Part 2 investigation.49 Additionally, there were six prosecutions commenced in the 12 months prior to the report.50 These numbers reflect the high thresholds in the SFO Act, and the SFO’s focus on cases with the biggest impacts on public protection and the perception of corruption in New Zealand.Whilst the SFO only deals with the most serious and complex of frauds, it is these serious cases that gain the most public attention and therefore have the most ability to harm political reputations and increase distrust in governmental processes.51 Hence, this dissertation focuses on the SFO despite the wide array of different governmental bodies that deal with fraud.
B Purposes of Electoral Financing
Electoral financing offending occurs at a breach of any requirements within Part 6A of the Electoral Act. However, offences can be charged under either the correlating criminal provision in the Electoral Act or under a more general fraud provision, such as s 240 of the Crimes Act. The purpose of electoral financing fraud, regardless of the exact charge incurred, has a dual function – first, to ensure public transparency and legitimacy of the electoral system and second, to allow political parties to function efficiently and provide access to funding for campaigns.52 These two conflicting purposes are at the heart of this dissertation discussion.
Providing public transparency to the inner workings and fundings of our nation’s electoral system is crucial for two purposes. First, retaining a high public confidence in the source of political power and second, to creating and retaining public legitimacy in the government of the day. Particularly with New Zealand’s strong reputation for anti-corruption, the awareness and open tract of information aids the public’s assessment of the electoral system as fair. This fairness is evident as the government’s policies are seen to be based on the best interests of the citizens rather than private, undisclosed funds.53
49 Serious Fraud Office Annual Report 2020 (2020).
50 Serious Fraud Office Annual Report 2020.
51 Serious Fraud Office “What We Do”, above n 41.
52 Keith Jackson (ed) The Dilemma of Parliament (Allen & Unwin, Wellington, 1987) at 42.
53 Anderson and Chapple Patterns of political donations in New Zealand under MMP, above n 23, at 14.
One of the hallmarks of a democracy is the lack of corruption in the public sector.54 This is determined by the public trust that both the elected members of Parliament and appointed civil servants carry out their roles without bribery or corruption.55 Therefore, the integrity of our electoral donation system is crucial to our democratic underpinnings. When electoral donations are not recorded or their records are not disclosed, the public cannot determine whether bribery or corruption has taken place.56 Arguably, it is not just a measure of actual bribery or corruption that is crucial for a well-functioning electoral system, but also the public perception that these two traits are absent.Fraud in the electoral system could harm the functioning of our democratic system and undermine trust in our public institutions.57 A representative democracy requires voters have confidence that electoral donations are not providing significant influence over law or policy making.58 To have this confidence and assurance, transparency in the financing process is necessary.59 In New Zealand, under a Mixed-Member Proportional (MMP) electoral system, many political donations are received by unsuccessful or minority parties which suggests that financial donations are insufficient to secure political success without voter support.60 It is rare in New Zealand that a specific financial donation will relate to the exacting of a particular policy or legislative decision. However, there is a more general concern that the reliance on a small group of wealthy individuals and businesses for political funding will orient policy in the direction that suits these funders.61
Political functionality is another essential role of electoral donations. With the downturn of political party membership (and strong union membership) comes the need to pay staff to do what volunteers once would.62 Further, in an increasingly online world, more campaign mediums are required which is seeing the overall cost of media increase.63 Political parties,
54 Matthew S R Palmer “New Zealand Constitutional Culture” (2007) 22 NZULR 565 at 575.
56 Shrabani Saha, Rukmani Gounder, Neil Campbell and J J Su “Democracy and corruption: a complex relationship” (2014) 61 Crime Law Soc Chang 287 at 292.
57 Serious Fraud Office “Safeguarding the Integrity of the Electoral System” <www.sfo.govt.nz>. 58 Saha, Gounder, Campbell and Su “Democracy and corruption: a complex relationship” at 292. 59 Serious Fraud Office “Safeguarding the Integrity of the Electoral System”.
60 Electoral Commission “Party donations and loans by year” <www.elections.nz>; See Appendix 2.
61 Johnston and Pattie “Money and votes: a New Zealand example”, above n 20, at 113-114; Max Rashbrooke Bridges Both Ways: Transforming the openness of New Zealand government (Victoria University of Wellington, Working Paper 17/04, June 2017) at 6; Transparency International New Zealand Integrity Plus 2013 New Zealand National Integrity System Assessment (December 2013) at 244.
62 Johnston and Pattie “Money and votes: a New Zealand example” at 114; Steven Weldon “Downsize My Polity? The Impact of Size on Party Membership and Member Activism” (2006) 12(4) Party Politics 467 at 468.
63 Robin Kolodny and Michael G Hagen “What Drives the Cost of Political Advertising?” in Routledge Handbook of Political Management (Routledge, Oxfordshire, 2010) 210 at 210.
particularly small parties with niche policies, require focused and continued advertising to enter Parliament and retain their member seats.64 Complete transparency and strict onerous rules for electoral funding could have a backfiring effect, as this could investigate individual donations from wealthy individuals or businesses at the expense of neglecting the influence of lobbyists and other indirect forms of political funding.65 Further, electoral funding models and laws are ineffective in isolation, as individual funders could instead move funds in ways that avoid public attention, such as through lobbies and legally independent organisations.66It is in the balancing of these two purposes – transparency and functionality – that we consider what electoral financing legislation should look like. Discussions and debates about electoral rules are inherently political and controversial. Specifically, consensus is not found in the relative weight that should be given to the freedom of expression of political parties (heavily implying a lack of regulation) and the fairness of the political system (heavily implying the insertion and maintenance of regulation).67
While this dissertation will focus on the balance of these two conflicting purposes, other competing factors must be recognised. These factors include preserving the freedom of political expression and association for the wider public, allowing political parties to access financial support to ensure they can have an impact within an MMP electoral system, avoiding political donations from having an improper influence on electoral outcomes, and ensuring the rules are efficient and practical for both electoral system participants and the Commission.68
64 Holtz-Bacha and Kaid “Political Advertising in International Comparison”, above n 1, at 3.
65 Michael Pinto-Duschinsky Background Paper Facts, Sceptical Thoughts and Policy Ideas (OECD, Background Paper, 14-15 November 2013) at 4 and 47.
68 Ministry of Justice “Potential changes to political donation settings prior to 2023 General Election” (obtained under the Official Information Act 1982 request to the Ministerial Relations and Services, Ministry of Justice) at 4.
II The New Zealand Position
A Electoral Finance Act 2007
The Electoral Finance Act was inherently controversial as it sought to balance public transparency and political functionality. It was finally determined to weigh too heavily on the side of transparency which saw its repeal in 2009, only two years after enactment.69 After increasing concerns that donations bought elections, this Act attempted to prevent wealthy private parties from anonymously buying elections through advertising or lobbying.70 It achieved this by limiting legal spending on “taking a public position on a political matter” to
$12,000 without registering with the Commission, while registered parties could spend up to
$120,000.71 Third parties involved in political advertising were also required to disclose their donors identities, similar to the political party regulations.72 While the then-incumbent Labour Party saw this as an increase in public transparency, political opponents viewed the changes as breaching democratic rights and restricting the civil liberty to spend private money on political campaigns.73 Further, the Law Society criticised this Bill for the implications it brought that ordinary citizens could be criminally liable for publicly engaging in election issues.74 Once repealed, the Government and Opposition worked together and bilaterally supported the Electoral (Finance Reform and Advance Voting) Amendment Bill in 2010.75
B Electoral Act 1993
Specific electoral financing laws now sit within the Electoral Act.76 Currently, New Zealand law requires registered political parties to report to the Commission annually, providing details of donations and donors, and loans and lenders for party funding over certain thresholds.77 There is an additional requirement for parties to maintain accurate records and where the thresholds are not met, a simpler figure of the total number of contributions and their collated amount must be reported.78
69 Electoral Finance Act 2007.
70 Bob Watt (ed) UK Election Law: A Critical Examination (Glasshouse Press, London, 2006) at 183.
71 Electoral Finance Act 2007, s 63.
73 Claire Trevett “Electoral bill ‘backwards step’ – Law Society” (28 September 2007) New Zealand Herald
<https://www.nzherald.co.nz/>.
74 Trevett “Electoral bill ‘backwards step’”. 75 Trevett “Electoral bill ‘backwards step’”. 76 Electoral Act 1993, Part 6A and Part 6B.
77 Electoral Commission “Rules for party donations and loans” <https://elections.nz/>; See Appendix 3.
78 Electoral Commission “Rules for party donations and loans”.
Electoral regulations allow for parties and candidates to receive both donations and loans. Donations are defined separately for candidates and parties but are inclusive of “money or of the equivalent of money or of goods or services or of a combination of those things” that is made to a candidate or party or on their behalf for certain uses outlined in the Act.79 Alternatively, loans are exclusive to lending agreements and exclude market bank loans.80
While donations and loans can be made to both candidates and parties, the regulations for these vary. Generally, candidates have less obligations and a higher threshold to provide reports and disclosures.81 Candidates are defined as meaning a “constituency candidate” and including a list candidate (and in the relevant Parts, those who have declared an intention of becoming a list candidate).82 A party means a political party registered under the Act and includes parties that were registered at any time during the regulated period.83
The Electoral Act has a broad ambit of legislative power. It extends from elections and voting rights to how laws are created and processed.84 Of interest to this dissertation, Part 6A deals to election expenses and donations and Part 6B deals to loans.85 Electoral donations are far more regulated than loans, likely for reasons twofold – they are far more common in New Zealand, and they hold more apparent weight to decision-making than loans which are to be repaid over time. Donations therefore require more public transparency.86
Donations require disclosure by the donor of the donor’s details when the donation alone, or when aggregated with other contributions made on behalf of the same donor, exceed $1,500
85 Electoral Act 1993, Part 6A and 6B; Electoral Amendment Act 2009, above n 7; Electoral Amendment Act 2014, above n 7.
86 Kevin Casas-Zamora (ed) Paying for Democracy: Political Financing and State Funding for Parties (ECPR Press, Colchester, 2005) at 17.
for a New Zealand person or $50 for an overseas person (who does not reside in New Zealand and is not a citizen or registered voter).87 It is an offence to retain donations if the candidate or party secretary has knowledge or reasonable grounds to believe the disclosure requirements have not been complied with.88As overseas donations may not exceed $50, candidate and party secretaries must make reasonable steps to ascertain whether anonymous donations above $50 were donated by or on behalf of an overseas person.89 The value of anonymous donations exceeding the value of
$1,500 for New Zealand persons or $50 for suspected overseas persons must be paid to the Commission.90 It is an offence to conceal the identity of an anonymous donor for candidate donations exceeding $1,500 or to circumvent the anonymous or overseas donation regulations.91 Separately, there is a specific offence of corrupt practice relating to splitting party donations or contributions.92
Provision is made for donations protected from disclosure. These are donations supplied by a New Zealand person exceeding $1,500 without disclosure of their personal identifying details to the party and the general public.93 These donations must be made via the Commission and be accompanied with a statement specifying the donor’s details. Instead of a monetary cap on donations protected from disclosure, the maximum amount allowed is 10 per cent of a candidate’s or 15 per cent of a party’s maximum amount of election expenses.94 Other than to an authorised person (as listed in the Act), it is an offence to disclose any identifying details of a donor or potential donor.95
Sufficient and accurate records must also be held by all candidates and party secretaries and failing to do so without reasonable excuse is an offence.96 Both candidates and parties have to file returns with the Commission. Candidates must disclose details of the donor for donations exceeding $1,500 from New Zealand donors and $50 from overseas donors and the date and amount of donations exceeding the anonymous maximums.97 Similarly, party secretaries must
87 Electoral Act 1993, ss 207 and 207C.
88 Sections 207C(4) and (5). 89 Sections S207K and 207JA. 90 Section 207I.
91 Sections 207G, 207H, 207J and 207L.
94 Electoral Act 1993, s 208B; Electoral Commission “Donations protected from disclosure” <www.elections.nz>.
95 Electoral Act 1993, s 208F. 96 Sections 207M and 207N. 97 Section 209.
disclose details of the donors for donations exceeding $15,000 from New Zealand donors and the date and amount of donations exceeding the anonymous maximums.98It is an offence to file these returns late, to fail to file, or to file a return that is false in any material particular.99 These returns may then be published by the Commission.100
As previously noted, loans are far less regulated than donations. Parties are only able to enter into loans with the party secretary’s authorisation and must keep accurate records.101 The disclosure of the number of loans and total aggregated amount is only required for amounts exceeding $1,500 and specific information regarding the donor is only required for amounts exceeding $15,000.102 The filing of returns is only required if the loan amount exceeds $30,000 and the criminal offences stemming from loans are limited to the late filing of returns, incorrect holding of records or entering loans that circumvent the Act.103 Candidates, however, have no regulations requiring a disclosure of loans or maximum loan amount.104
If it appears that any offence has been committed under Part 6A in which there is a public interest, the Commission has the duty to report the facts on which this belief was formed to the New Zealand Police.105 This can then be escalated to Crown Law or the Serious Fraud Office should the offence be found significant enough.106 Penalties and punishment for electoral offences are established generally for “corrupt and illegal practices” under s 224 and are otherwise provided for other offences in the specific provision.107
99 Sections 209B and 210D. 100 Sections 209E and 201F. 101 Sections 213 and 214B.
103 Sections 214, 214A, 214B and 214G.
105 Electoral Act 1993, s 205P.
106 New Zealand Police and Serious Fraud Office Memorandum of Understanding between New Zealand Police and Serious Fraud Office (2011) at 10.
III Current Reform
A Current Reform – Background
Since the last comprehensive review in 2010, academics and political commentators alike have recognised issues with New Zealand’s electoral finance regime.108 Some issues highlighted include avoidance of disclosure of donors through third parties donation channels, donations made below the disclosure threshold, splitting donations between multiple individuals and disguising donations as loans or non-monetary donations such as goods, expertise and services.109 New Zealand’s existing law on donations and their disclosure have been regarded as a potential “paper tiger”, with a strong exterior appearance, but a weak and ineffectual interior.110 This was explained by legal academic Andrew Geddis:111
If those involved in election campaigns... conclude that a failure to follow the rules around party funding is unlikely to be detected and not punished even if it is, then those rules come to lose their efficacy.
On the back of these academic commentaries, the three key constraints or vulnerabilities recognised by the Ministry of Justice (the Ministry) were:112
Following the recent allegations and charges laid, these issues have garnered significant attention in the media and public discourse, with calls for reform to be focused on transparency and enforcement.114 Initial advice prepared for the Minister provided insights into the approach taken to the electoral finance work in March 2021.115 Due to the constitutional importance of electoral financing laws, the Ministry had a crucial focus on public consultation and party support from across the political spectrum. The proposed timeline allowed sufficient time for consultation with public and parties, and for all involved actors to understand the new rules
108 Geddis “Funding New Zealand’s Election Campaigns”, above n 2, at 9.
109 Ministry of Justice “Initial Advice”, above n 8, at 5.
110 Geddis “Funding New Zealand’s Election Campaigns” at 12.
112 Ministry of Justice “Potential changes”, above n 66, at 5-6.
114 Geddis “Funding New Zealand’s Election Campaigns” at 12; Ministry of Justice “Initial Advice” at 5.
and change tack before the 2023 General Election campaigns began.116 The advice recognised that regulated political finance is foundational for the public trust in our electoral system, and ultimately, is a key pillar of democracy.117The Ministry also assessed whether to introduce a ban on anonymous donations.118 This ban would shift the scales from privacy towards transparency. However, removing this option entirely would encroach on the donor’s individual privacy and their privacy surrounding political affiliations.119 This could breach the secrecy of the ballot and discourage political participation.120
While targeting political financing, the advice also highlighted that the Government has agreed to a comprehensive electoral law review over the next two parliamentary terms.121 This review would delve into systemic issues with New Zealand’s current electoral law such as regulation of election advertising and the balance between private and state funding.122 This review would also assess the need for changes to non-individual donations going forward.123
Before examining options, the Ministry surveyed 1,000 New Zealanders on potential political financing changes.124 Those surveyed were asked for their perspective on donor characteristics, donation amounts and caps, disclosure and reporting rules and thresholds, and how and when this money should be used.125 Approximately three quarters of respondents felt only New Zealand voters should be able to make political donations rather than foreign-owned businesses.126 Unequivocally, respondents thought political parties should be required to disclose all finances – with 84.4 per cent supporting total disclosure.127 Results were more mixed on the maximum amounts for donations and whether anonymous donations should be retained.128
117 Ministry of Justice “Initial Advice” at 2.
120 At 9; Chapple, Prieto Duran and Prickett Political donations, party funding and trust in New Zealand, above n 21, at 6.
121 Ministry of Justice “Initial Advice” at 2; Kris Faafoi “Government to review electoral law”, above n 8.
123 Ministry of Justice “Potential changes” at 9-10.
125 Ministry of Justice “Key Elements of Framework” (obtained under the Official Information Act 1982 request to the Ministerial Relations and Services, Ministry of Justice) at 1.
B Current Reform: the approaches assessed and the recommendations
The Ministry assessed the key themes to be addressed in the pre-2023 General Election reform and found they should focus on transparency, donation thresholds and definitions, and compliance and reporting.129 These themes led five approaches to be outlined for targeted change in political financing.130
Retaining the status quo and focusing on education to enforce the current system would allow time for a more thorough investigation of the issues before implementing change.131 However, this soft response would signal that the government is unwilling to identify and deal with the root of the issues stemming from the current electoral processes and regulations.132
(b) Ensuring transparency and accountability
Prioritising transparency in legislation would provide assurance that election rule-breakers would be publicly recognised.133 This should strengthen public trust and confidence in New Zealand’s electoral system.134 Provided parties and candidates are transparent with voters about funding processes, they would be allowed flexibility to choose how they are funded.135 Transparency measures could include mandatory comprehensive reporting of all contributions or increased reporting frequency to a real-time, monthly, or quarterly basis. Alternatively, it could be mandated that all donations are first paid to the Commission for onward transmission to parties.136 Increasing transparency requirements would strengthen accountability. However, a decrease in anonymity could decrease donor participation and political financing.137 This approach may increase the administrative burden on parties or the Commission without
129 Ministry of Justice “Assessment of Options” (obtained under the Official Information Act 1982 request to the Ministerial Relations and Services, Ministry of Justice) at 1.
136 Ministry of Justice “Electoral Research” (obtained under the Official Information Act 1982 request to the Ministerial Relations and Services, Ministry of Justice) at 36; See Chapter V C at 49 for further discussion.
137 Ministry of Justice “Assessment of Options” at 3; Chapple, Prieto Duran and Prickett Political donations, party funding and trust in New Zealand at 6; Report of the Royal Commission on the Electoral System 1986, above n 18, at 217.
addressing some crucial transparency issues – such as donations masked by trusts or third parties.138(c) Restrictions on certain types of donors or lenders
Changing restrictions on donor or lender identity would increase transparency through regulating who and how electoral processes can be financially influenced.139 There are several options for how these restrictions could be increased, including restricting or banning donations from companies, legal persons with Government connections, or anonymous donations.140
These restrictions would clamp down on the breadth of persons – whether natural or bodies corporate – who would be eligible to provide political financing. Each would strengthen accountability and increase transparency to varying levels and limit disproportionate influence.141 Further, this approach directly addresses hidden donations – restricting donations through companies or anonymous parties reduces financers’ ability to channel their funds through parties.142 This supports transparency at the cost of political functionality – donations from corporate bodies would be reduced or eliminated which could result in a funding shortfall.143 Removing non-individuals from eligibility to donate would bar them from democratic participation, potentially giving rise to issues under the New Zealand Bill of Rights Act 1990 (NZBORA) through infringement on democratic rights and freedoms as non- individuals would be prevented from democratic participation.144
Donations of any one person could be capped through maximum limits for donations to a single political party, whether cash or in-kind.145 This would limit the influence of a single donor through political financing and would provide greater clarity and consistency with the electoral financing process to aid compliance.146 These limits would likely differ for individual and corporate donors.147 Donation caps would support accountability to voters as political parties and candidates could not rely on a few large donations, but would need a broader base for
138 Ministry of Justice “Assessment of Options” at 3.
140 Ministry of Justice “Electoral Research” at 29-31. 141 Ministry of Justice “Assessment of Options” at 5. 142 At 5.
143 At 5; Report of the Royal Commission on the Electoral System 1986 at 217.
144 Ministry of Justice “Assessment of Options” at 5; Chapple, Prieto Duran and Prickett Political donations, party funding and trust in New Zealand at 6.
145 Ministry of Justice “Assessment of Options” at 7.
147 Ministry of Justice “Electoral Research” at 32-33.
financial support.148 Reducing the amount that a donor could provide would support an equal playing field in the parties’ financial statuses and increase both public trust in the electoral system and transparency.149 Unfortunately, this approach could also provide a potential reduction in donations leading to a political funding shortfall, while also disregarding the issue of hidden donations.150(e) Fostering a culture of integrity and ensuring compliance and review
The final approach suggested a focus on compliance, reporting and review and would attempt to increase public trust and confidence through education and compliance.151 Several options to increase compliance and review were assessed, including requiring annual audited financial accounts from parties and empowering a public organisation to act as a regulator and examine financial statements and enforce political finance regulations.152 These would each see greater consistency in the political financing process and streamline the system to increase compliance support.153 However, this would result in an increased administrative burden – both in implementation and enforcement.154
Each of these approaches clearly have their advantages and disadvantages and their impact must be considered against the legislative status quo.
The ultimate recommendations focused on disclosure and reporting. The suggested changes were:155
150 Ministry of Justice “Assessment of Options” at 7; Report of the Royal Commission on the Electoral System 1986 at 217.
151 Ministry of Justice “Assessment of Options” at 8.
152 Ministry of Justice “Electoral Research” at 36-37; See Chapter V C at 49 for further discussion.
153 Ministry of Justice “Assessment of Options” at 8.
155 Ministry of Justice “Proposed changes to political donation rules in our electoral law” (25 January 2022) Justice
<www.consultations.justice.govt.nz>; See Appendix 6.
These recommendations, except recommendation three, are tied together by the key purposes of transparency, accountability and consistency.156 Recommendation three attempts to reduce administrative complexity and the incentive to split donations to be under the threshold.157 The prioritisation of transparency comes at the cost of donor privacy. Reducing the thresholds decreases the ability for donor anonymity, however, donors still have the ability to provide non-disclosed funds via the Commission under the protected disclosure regime.158 Additionally, the changes that would increase reporting requirements could compound issues surrounding unnecessary compliance complexity.159
C Electoral Amendment Bill
These recommendations by the Ministry, alongside recommendations from the Commission and public pressure have resulted in the introduction of the Electoral Amendment Bill (the Bill) on 20 July 2022.160 This Bill provides for several changes to the Electoral Act to support the process and participation in electoral financing in New Zealand.161
Interestingly, several of these amendments were already provided in the Electoral Amendment (Strengthening Democracy) Bill which was introduced earlier in the year, but was defeated at the first reading on 21 September 2022.162 This earlier Member’s Bill provided for seven areas of reform, including lowering the voting age from 18 to 16 years, restoring suffrage to previously disenfranchised New Zealand prisoners, and more relevantly for this dissertation: “strengthening transparency and safeguards on donations and parties to candidates”.163 These amended several thresholds and introduced further requirements for disclosure in the electoral
156 Ministry of Justice “Potential changes”, above n 68, at 7.
158 At 8; Electoral Commission “Donations protected from disclosure”, above n 94.
159 Ministry of Justice “Potential changes” at 8.
160 Electoral (Strengthening Democracy) Amendment Bill 2022 (131-1).
161 Electoral Amendment Bill 2022 (152-1), explanatory note. 162 Electoral (Strengthening Democracy) Amendment Bill 2022. 163 Explanatory note.
donation and loan frameworks.164 This Bill likely failed due to the nature of the other areas for reform, noted above, which are inherently bold and contentious.165
The more recent Electoral Amendment Bill seeks to strengthen transparency, increase public confidence in political parties’ funding and maintain trust in the electoral system.166 It attempts to do this while minimising the additional compliance burden on political parties.167 This is achieved through lowering thresholds for disclosure and increasing reporting requirements.168
This Electoral Amendment Bill, if passed, would see the donation threshold for public disclosure reduce from $15,000 to $5,000.169 It would also amend the reporting requirements for donations contributed by the same donor to be disclosed within 10 working days from
$30,000 to $20,000 and only require this timely disclosure within general election years.170 This Bill also introduces several new requirements. It requires parties report donations under
$1,500 that are not made anonymously.171 It requires a return detailing the total amount of party
donations (both monetary and in-kind).172 It requires parties disclose their financial statements and it requires candidates to publicly report on loans received relating to their campaign.173
Interestingly, although these changes and the Electoral Amendment (Strengthening Democracy) Bill both discuss electoral amendments, their proposed amendments of the Electoral Act differ.174 The earlier Member’s Bill went far further for transparency, and provided a donations cap for candidates, repealing the ability to make donations protected from disclosure and restricted loan requirements to New Zealand persons with a maximum limit.175 However, this transparency would likely have come at a cost to political functionality – with increased administrative burden and reduced incentives for contributors to donate or loan to political parties.
165 Make It 16 “Member’s Bill Containing Change to Voting Age Not to be Considered by Select Committee” (22 September 2022) Scoop Politics <www.scoop.co.nz>.
166 Electoral Amendment Bill 2022 (152-1), explanatory note.
174 Electoral (Strengthening Democracy) Amendment Bill 2022; Electoral Amendment Bill 2022.
175 Electoral (Strengthening Democracy) Amendment Bill 2022, cls 27, 31 and 35.
The changes in both of these Acts were determined on a tight timeframe to enable them to come into force before the political campaign for the 2023 General Election. However, this has meant the changes do not seek to fill many of the wider gaps that the Ministry outlined in their assessment of the current law.Notably, the proposed laws under the Electoral Amendment Bill do not directly assist Ministry’s approaches three (restrictions on certain types of donors or lenders), four (applying limits), or five (fostering a culture of integrity and ensuring compliance and review). While these do increase public transparency, they are minor changes to a generally flawed system. Significant further reform is required for an evident change in the public trust in the electoral system to be recognised.
Unfortunately, this Bill is unlikely to be sufficient to deal with the issues in the current political financing process that were highlighted in this review.176 Tinkering with the legislation as it currently stands provides a band-aid to a gaping wound that requires more radical intervention. Further, editing the defects in this way provides the incumbent government the power to determine which direction the legislation will sway. Legislating political financing is inherently political.
For example, the current Bill proposes to reduce the donation threshold for parties from
$15,000 to $5,000.177 While this is a small win for public transparency, the political functionality impact will be felt differently along the political spectrum.178 This reduction will have a larger practical impact on more right-leaning parties in New Zealand. These parties have historically been the receivers of larger donations and therefore their donors’ identities, and therefore their donations are more likely to be respectively disclosed and reduced.179
Consequently, this particular proposed change has indicated the end of bipartisan support on the donations regime since the introduction of the Electoral Finance Act in 2005.180 The power of the incumbent also suggests that with government changes, these donation thresholds could
176 Ministry of Justice “Potential changes” above n 68, at 5-6.
177 Electoral Amendment (Strengthening Democracy) Bill 2022, cl 4(1).
178 Andrea Vance “National says political donations reform will have ‘chilling effect’ on NZ elections” (20 June 2022) Stuff <www.stuff.co.nz>.
179 Vance “National says political donations reform will have ‘chilling effect’”; Electoral Commission “Party donations and loans by year”, above n 60; See Appendix 2.
180 Claire Trevett “Political donations: National, Act cry foul over Government changes to donations rules, Greens want a cap” (27 June 2022) NZ Herald <www.nzherald.co.nz>.
also change.181 This is the natural corollary of parliamentary supremacy in New Zealand. But public transparency should not be an issue for certain parties to support and others to bypass. To combat these issues of the inherent political tension in electoral financing and the unjustifiably narrow scope of reform, this area of the law requires a wider assessment than simply reassessing the thresholds and definitions within the current legislative framework.
181 OECD “Embracing continuous change in government”, in Government at a Glance 2017 (OECD Publishing, Paris, 2007) 31 at 32.
IV Labelling Electoral Deception
It is clear the New Zealand’s political financing scheme has come a long way since its inception, but more change is inevitable if we wish to retain our anti-corruption perception. In determining what changes should be made, an assessment must first consider the wrongs being committed. While it might be non-contentious that evading disclosure is a wrongful act, it is not yet clear what label should be attributed to this wrongful act. Labelling criminal actions appropriately is a fundamental principle of the criminal law and it allows for appropriate understanding of personal actions and social accountability.182 It is the fraud provision under the Crimes Act that is currently being used for prosecuting electoral financing breaches.183 This section will ask whether fraud is the correct term for these actions of political donations going awry.
A Use of fraud terminology in political financing
When, counter to the Act’s requirements, political donations are not disclosed or are split to be beneath the disclosure thresholds, it is clear that a wrong has been committed.184 Although the legal wrong is of the most relevance to this discussion, the wrongfulness of these acts goes beyond the mere fact that they run counter to legislation and also considers wider, moral wrongdoing.185 There must be a consideration of how to label this wrong.186
Although the concept of fraud has deep roots in legal history, it has quite varying definitions and uses depending on the context – both the legal area being discussed and the social context of the time.187 Four of the most common occurrences of fraud in New Zealand legislation and general use of the term will be discussed to determine whether the wrong related to political financing can be adequately described as a fraud. These four fraudulent occurrences are
182 Andrew P Simester, Neil Boister and Warren Brookbanks (eds) Principles of Criminal Law (5th ed, Thomson Reuters, New Zealand, 2019) at 39; Andrew Ashworth and Jeremy Horder (eds) Principles of Criminal Law (7th ed, Oxford University Press, Oxford, 2013) at 27.
183 Crimes Act, s 240. R v EF and FG, above n 26, at [77].
185 Andrew Phang “Of legal history, jurisprudence and insanity – ‘wrong or contrary to law’ in section 84 of the penal code re-considered” (1995) Singap J Leg 315 at 315-341.
186 Simester, Boister and Brookbanks Principles of Criminal Law at 39.
187 Controller and Auditor-General “Good Practice: Discouraging Fraud: The Basics” (2022)
criminal (obtaining or causing loss by deception),188 property fraud,189 benefit fraud,190 and immigration fraud.191
These four different legislative uses of fraud share the involvement of an “intentional deception” of another.192 This usually results in the fraudulent party obtaining a benefit – whether that be control over property (including land), financial gain (including social security benefits) or access to a certain status (such as protected person status or a passport).193 Despite the common use of the term “fraud” in both legislation and social use, none of these Acts provides a definition.194
The closest to a statutory definition of “fraud” is the Crimes Act definition of “deception”.195 This fraud provision was developed to capture behaviour that did not fit the narrower definition of “theft” and instead provided a wider encapsulation for this legal wrong to be prosecuted.196 Within the Crimes Act 1961, the exhaustive definition for ‘deception’ has three categories, outlined below:197
a) A false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and—
- knows that it is false in a material particular; or
This requires both that there is an intention to deceive any other person, as well as either knowledge or recklessness as to whether the representation is false in a material particular.198
b) An omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it.
189 Land Transfer Act 2017, s 6.
190 Social Security Act 2018, s 209(1).
191 Immigration Act 2009, s 204.
192 Crimes Act 1961, s 240; Land Transfer Act 2017, s 6; Social Security Act 2018, 209(1); Immigration Act 2009,
s 204.
193 Land Transfer Act 2017, s 6; Social Security Act 2018, s 209(1); Immigration Act 2009, s 204.
194 Crimes Act 1961, s 240; Land Transfer Act 2017, s 6; Social Security Act 2018, 209(1); Immigration Act 2009,
s 204.
196 Julia Tolmie, Kris Gledhill, Fleur Te Aho and Khylee Quince (eds) Criminal Law in Aotearoa New Zealand
(Lexis Nexis, Wellington, 2022) at 441.
197 Crimes Act 1961, s 240 (emphasis added).
198 Section 240 (emphasis added).
This requires there is an obligation to disclose a material particular.199 These obligations are clearly set out in the Electoral Act for those involved in the administration of party finances.200 This is not mutually exclusive of a false representation as some circumstances may give rise to claims under either subsection.201
These are likely to cover situations where no representation (whether direct or indirect) is made.203 For example, an ongoing “stratagem” after the initial representation that continues to deceive another.204 This stratagem limb has been used in several recent political cases including R v EF and FG.205
General definitions of fraud can also aid the determination of what fraud is in a legal sense. The Oxford dictionary provides the literal definition to be “a type of dishonesty, calculated to obtain advantage, generally financial advantage, by some wrongful means (usually a tort or crime)”.206 The Office of the Attorney-General explains that “fraud is an intentional act... involving the use of deception to obtain an unjust or illegal advantage”.207 Corruption goes further and is “the abuse of entrusted power for private gain”.208 Corruption is a type of fraud that should be especially avoided in the electoral system. This is because it involves the abuse of power, which would provide for decreased trust in the government and, more practically, the undue influence it provides to a select number of individuals would reduce or withhold our democratic mandate.209 Corruption, more than just an element of fraud, has been used to imply moral turpitude.210 While fraud has several definitions, it is the element of dishonesty that is consistent. Fraud labelling does not always indicate extreme criminality but can vary in severity and perceived harm.
199 Tolmie, Gledhill, Te Aho and Quince Criminal Law in Aotearoa New Zealand at 441.
200 Electoral Act 1993, Part 6A and 6B.
201 Tolmie, Gledhill, Te Aho and Quince Criminal Law in Aotearoa New Zealand at 442.
202 Crimes Act 1961, s 240(2)(c) (emphasis added).
203 Tolmie, Gledhill, Te Aho and Quince Criminal Law in Aotearoa New Zealand at 442.
204 R v O’Brien [2019] NZCA 83, (2019) 29 CRNZ 75.
205 R v EF and FG, above n 26, at [40].
206 Oxford English Dictionary (2nd ed, 1989) Fraud.
207 Controller and Auditor-General, above 187.
208 Controller and Auditor-General.
209 Mai Chen (ed) Public Law Toolbox: Solving Problems with Government (2nd ed, Lexis Nexis, Wellington, 2014) at 965.
The “fraud” label imports criminality and could consequently be considered inappropriate in many political financing cases. Fraud involves calculated dishonesty, using wrongful means to obtain an advantage.211 Although political financing fraud often lacks specific victims, I will illustrate that there is still a net harm to society. I will use the example of the donations that are split between individuals to bring them under the financial thresholds set out in the Electoral Act.
There are two potential parties being deceived when this action occurs. First, the Commission is being deceived as they are not provided accurate records, particularly donation amounts and identities of donors, which is required under the Electoral Act.212 Second, the public are being deceived as they are being provided an exhaustive list of donations, which does not include these funders. Without any greater transparency, there is no reason for the public to look behind the veil to understand who is funding our political parties, and indirectly, our Parliament.
The wrong committed could be recognised as a benefit to the donors or lenders as they are not publicly disclosed. Contributors can keep their identities hidden from the public eye and therefore not be held accountable or scrutinised for their political affiliations. Alternatively, a benefit could be attributed to the political party as they are able to receive and use these financial contributions for their own purposes without any public accountability as to who they are from or whether there is any link between these payments and their policy decisions. Further, the gains of keeping the contributor’s identity hidden means more donors (particularly those with a more private nature or more public identity) are likely to be more inclined to provide political financing.
While this wrong does not directly harm or cause loss to any person, it cannot be said that no harm has occurred. The fact that the donors themselves are not deceived is not the issue. By intentionally deceiving the Commission, and indirectly, the public, harm has been done to the
211 Oxford English Dictionary (2nd ed, 1989) Fraud.
212 Electoral Act 1993, s 209-210F.
democratic mandate of New Zealand and the trust that people have in our electoral system (and its high standards against corruption, whether actual or apparent).
Therefore, the wrongs regarding political financing are apt to be dealt with under the umbrella term of fraud. However, this does not necessarily require that political financing be dealt with on the same offending level as criminal fraud. Instead, a legislative distinction could be made. This could separate fraud in an electoral context and provide for a more nuanced approach with separate labelling, legislative elements, and penalties. “Fraud” does not necessarily denote high-level criminal dealing; however, it does suggest a high degree of mens rea, with intentional deception. Therefore, to align with the criminal law principle of fair labelling, where no intention exists, but elements are instead met by a lack of due care, offences cannot fairly be labelled fraudulent.213
B Comparison of Offences in Electoral Act 1993 and Crimes Act 1961
This section will compare the offences that are available for political financing wrongs and assess which of these are currently used by the prosecutorial bodies for this electoral offending. The Electoral Act has several specific electoral financing offences; however, these offences are seldom used for prosecution.214 Instead, in several recent cases, s 240 of the Crimes Act has been used as a catch-all provision for any action which could not easily be fitted into another criminal provision.215
The Electoral Act sets out specific rules and regulations for election expenses and donations (Part 6A), loans (Part 6B), and corrupt and illegal practices (Part 7). Part 6A is further broken down into six subparts: election expenses of candidates, election expenses of parties, general provisions relating to donations, donations protected from disclosure, disclosure of candidates’ donations and disclosure of parties’ donations.216 This focus on electoral financing provides for specific offences. For example:217
207LA Offence relating to splitting party donation or contribution to party donation
213 Ashworth and Horder Principles of Criminal Law, above n 182, at 27.
214 My research has not identified any cases where the specific offences have been prosecuted.
(1) A person is guilty of a corrupt practice who directs or procures... 2 or more bodies corporate to split between the bodies corporate a party donation in order to conceal the total amount of the donation and avoid the donation’s inclusion by the party secretary in the return of party donations...
While donation splitting goes entirely against the Electoral Act’s purpose and the limits set for both donors and lenders, this is the only offence relating to splitting funding and has several difficult and limiting requirements.218 Notably, the individual must direct or procure, this must involve body corporates (and is not inclusive of individuals), it must be related to party donations (which requires meeting the definition of “party donation” and does not include breaches for candidates or loans) and it must have the specific purpose being to conceal the donation from the party’s return.219 The punishment for this is imprisonment not exceeding two years or a maximum of $100,000 dependent on the person charged.220 This offence, like many Electoral Act offences, is highly specific – making it both difficult to satisfy the criteria and even harder to successfully prosecute.
Following the repeal of the Electoral Finance Act, the Electoral Act 1993 was the only Act that provided a direct remedy for electoral financing breaches. Despite these specific provisions, several recent cases of political donation fraud have used s 240 of the Crimes Act including the cases of National Party Donations and NZ First Foundation & Others.221 As the National case, in addition to the Labour Party Donations Case were undergoing trial at the writing of this dissertation, there was limited publicly available information regarding the use of these charges in the context of electoral financing fraud.
The offence used was:222
240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right, —
221 Crimes Act, s 240; Serious Fraud Office “National Party Donations”, above n 6; Serious Fraud Office “NZ First Foundation & Others”, above n 6; Serious Fraud Office “Labour Party Donations”, above n 6.
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
This offence has far wider terms than the specific Electoral Act provisions as it was constructed more broadly to deal with property wrongs that fell outside of theft.223 This broad scope allows for reliance as a fall back when other sections do not appear to directly apply.224 Section 240(1)(c) requires that the defendant by deception (defined in previous section) and without claim of right, obtains possession or control over property (inclusive of money) or any benefit (such as receiving funding or keeping contributors identities private) either directly or indirectly.225
These two Acts are instrumental to the regulation and enforcement of political financing.226 The Electoral Act has specific offences which were implemented for the particular purpose of regulating electoral donations and loans, however these are seldom used for prosecution.227 However, political financing fraud has been slipping through gaps in the Electoral Act for as long as this Act has been in force and has required patching each time another hole was shown to publicly surface. Further, the fact that the Crimes Act has been used to regulate political financing brings to issue why we have Electoral Act provisions and why they are being avoided at the enforcement level.228 This leads to the question of whether the Crimes Act is appropriate for use in electoral financing issues and how an alternative could be successfully implemented and practically enforced to ensure the system is transparent to the public, while still allowing for political functionality.
The Solicitor-General’s Prosecution Guidelines set out recommendations to assist in determining whether criminal charges should be commenced and what charges should be
223 Tolmie, Gledhill, Te Aho and Quince Criminal Law in Aotearoa New Zealand, above n 196, at 438.
224 R v EF and FG, above n 26, at [77].
226 Crimes Act 1961; Electoral Act 1993.
filed.229 All public and Crown prosecutions are to be conducted within these guidelines, including those under the SFO.230 Regarding the choice of charges:231
8.1 The nature and number of the charges filed should adequately reflect the criminality of the defendant’s conduct as disclosed by the facts to be alleged at trial...
While the choice of charges is largely at the prosecutor’s discretion, the decision to prosecute requires two tests to be met – the evidential test and the public interest test.232 In electoral offending cases, particularly where the defendant is involved in a political party, the public interest is not contentious.233 Instead, the consideration of whether the evidence is likely to establish a reasonable prospect of conviction requires strong assessment in determining which charges should be applied.234 This requires a consideration of whether the individual is identifiable, whether there is credible evidence which the prosecution can adduce and whether a conviction could reasonably be expected with the standard of proof beyond a reasonable doubt.235
There is a disconnect with legislation and prosecution. The Electoral Act outlines specific offences for donation splitting or donating through an indirect party, however many charges are ultimately coming under the Crimes Act. Ultimately, the use of the Crimes Act can be attributed to a lower evidentiary burden and a higher likelihood of meeting the evidential test in the Prosecution Guidelines.236 The Electoral Act offences are far more specific and set difficult tests to meet.237 There is no doubt that the Electoral Act offences were those intended for use in electoral funding breaches by Parliament.238 The Crimes Act, with its catch-all provision for obtaining by deception is not the obvious choice for prosecutors.239 However, its frequent use in this arena suggests that the laws in the Electoral Act should either be clarified or amended to be effective enforcement tools. Further, the penalties provided by each Act also
229 Crown Law Solicitor-General’s Prosecution Guidelines (2013) at 4.
237 Electoral Act 1993, Part 6A and 6B.
238 (7 December 2010) 669 NZPD 15833.
provides disparity, with the Crimes Act providing a far higher maximum term of imprisonment than even the ‘corrupt’ practices in the Electoral Act.240
The current issues with the Electoral Act, particularly the narrow circumstances in which the offences can be applied and the high bar for the prosecution to convict have pushed much of this enforcement into the Crimes Act’s more general provisions. Yet even in some instances, the Crimes Act is not wide enough to encapsulate political parties skirting the electoral laws.241 In looking to reform this area of the law to ensure that political financing is transparent (at least to the degree legislated), these laws must be directly related to the current electoral wrongs occurring, be general enough to extend to future wrongs that could foreseeably occur, and be accessible to both the potential defendants and the prosecutors. The next chapter will discuss what type of offences are most appropriate to deal with these actions and where these should be located.
240 Electoral Act 1993, s 224.
241 R v EF and FG, above n 26, at [77].
V Remedying the Issue
This section assesses three potential options for solutions on the current issues and the recommended legal remedy. The first option details a new offence schedule recognising different offending tiers which are reflected in different offence types. The second option provides a government funded model of political financing. The third option involves a government agency which would deal to the administrative obligations and distribute financial contributions for political actors. While many options will be explored, a focus will be on mens rea offences and whether this high criminal bar for liability and penalty is the best route of action for these remedies. Further, any solution must consider the constitutional arrangements, nature of political parties and means of access and publication to the media in New Zealand.242
A A New Offence Regime
In New Zealand, three categories of criminal offences are recognised.243 While a majority of offences are true crimes (or “mens rea offences”) and require an actus reus, a mens rea and an absence of defence, there are two alternative types of offences.244 Absolute liability offences only require an actus reus, while strict liability offences require both an actus reus and an absence of defence.245
An actus reus, simplified, is a physical act or omission which forms the basis of a criminal offence. It is an objective assessment of the defendant’s behaviour.246 In contrast, a mens rea is the mental element of the offence and assesses the defendant’s state of mind.247 This is assessed subjectively, and commonly tests knowledge, intention, and recklessness.248
Mens rea offences place the burden of proof on the prosecution with the standard of proof of beyond reasonable doubt.249 While strict liability offences have the same burden and standard for the physical elements, when these are met, culpability is presumed.250 This presumption then shifts the onus to the defendant to prove a defence, such as absence of fault, on the balance
242 Keith D Ewing (ed) The Cost of Democracy: Party Funding in Modern British Politics (Hart Publishing, Portland, 2007) at 43.
243 Tolmie, Gledhill, Te Aho and Quince Criminal Law in Aotearoa New Zealand, above n 196, at 183.
249 Woolmington v Director of Public Prosecutions [1935] UKHL AC 462 at 481-482, [1935] All ER Rep 1 at 8.
250 Simester, Boister and Brookbanks Principles of Criminal Law, above n 182, at 13.
of probabilities.251 This increases the evidential effort for defendants. However, this is justified as requiring the prosecution to prove subjective moral fault beyond a reasonable doubt would significantly increase enforcement costs and impair public policy’s ability to account for these lesser offences.252Strict liability offences should be considered in this area of electoral reform, particularly given the differences in assessment and levels of offending. If criminal “fraud” as now redefined, is too heavy a label for political financing wrongs, strict liability could provide a less burdensome label on wrongdoers. Equally this is easier for prosecutors to charge and convict, ensuring that transparency is provided in this process and that enforceability of the electoral rules is legislatively supported.
If legislative intent of an offence’s category is clear, this category will be applied.253 For example, a heading within an Act stating “strict liability” could be provided to make the category clear. If there is neither a clear legislative intent nor an overriding judicial history of the offence being treated as a certain category, then a mens rea offence is presumed.254 This presumption can be displaced if there is anything weighty enough, which often turns to a consideration of whether it is a public welfare offence.255
Indications that offences may be public welfare offences include being found outside the Crimes Act, dealing with matters of public safety, taxation, or other revenues, and whether it hurts society generally rather than assessing an individual’s blameworthy actions.256 Public welfare offences are presumed to be strict liability offences unless there is clearly no defence available, in which case, they would be determined absolute liability offences.257
Public welfare offences were originally labelled “administrative offences” as they existed primarily to strengthen the rule of law rather than see punitive punishment.258 These offences use the heavy hand of the criminal law, but often lesser penalties, to ensure that quasi-criminal
251 Cameron v R [2017] NZSC 89, [2018] 1 NZLR 161 at [62].
252 Legislation Design and Advisory Committee Legislation Guidelines 2018 (2018) at 115; Nicola Lacey “Space, time and function: intersecting principles of responsibility across the terrain of criminal justice” (2007) 1 Crim Law and Philos 233 at 247.
253 B (A Minor) v Director of Public Prosecutions [2000] UKHL 13; [2000] 2 AC 428 (HL) at 460, 464, 477-478.
254 Millar v Ministry of Transport [1986] 1 NZLR 660 at 668.
255 Civil Aviation Department v Mackenzie [1983] NZLR 78 at 81-82 and 85; Sweet v Parsley [1969] UKHL 1; [1970] AC 132
(HL) at 149-150.
256 Stevenson v R [2012] NZCA 189 at [16]- [17].
257 Millar v Ministry of Transport at 668.
258 R v City of Sault Ste Marie [1978] 2 SCR 1299 at 1302-1303.
acts are still disincentivised.259 While actions that set out to intentionally deceive the public or the Commission fit the “fraudulence” label and therefore require the heavier prosecutorial burden of mens rea offences, this does not have to be universal in electoral breaches. More minor electoral breaches, where an intention to deceive is not evidenced, could fall nicely into a “public welfare offence”. These quasi-criminal actions, such as failures to disclose identities, need to be enforced to ensure for public transparency in the identities of those financing our political parties, and to be aware of those who are foregoing the rules.
This is not the first time that strict liability offences have been recognised as a viable option for political financing offending in New Zealand.260 The now repealed Electoral Finance Act 2007 included some strict liability offences, which have seen continuation in “illegal practices” set out in the Electoral Act.261
Many of the current offences relating to political financing, particularly in the Electoral Act and Crimes Act are mens rea offences.262 Offences relating directly to fraud whether by “deception” or “corruption” are always classed as mens rea – frequently requiring the mens rea of an intention to deceive.263 A clear example is seen below:264
207LA Offence relating to splitting party donation...
(1) A person is guilty of a corrupt practice who directs ... bodies corporate to split ... a party donation in order to conceal the total amount of the donation...
The mens rea of intention is implied from “in order to”.265 To support the criminal law principle of fair labelling, the term “corrupt practice” is reserved for these more serious crimes, where there has been an intention to deceive (or in this case, conceal) relating to political financing.266 These harsh labels should be reserved for where intention or knowledge can be imputed. In a
259 Lim Chin Aik v R [1963] AC 160 (PC) at 174-175; Civil Aviation Department v MacKenzie at 83.
260 Electoral Finance Act 2007.
261 Electoral Act 1993, Part 7; Attorney General Electoral Finance Bill: Consistency with New Zealand Bill of Rights Act 1990 (Office of the Attorney General, ATT395/15, June 2007) at 1.
262 Electoral Act 1993; Crimes Act 1961.
263 Crimes Act 1961, ss 100, 102, 103, 104, 105, 105E, 219, 240, 249 and 259; Electoral Act 1993, ss 205B, 205F,
205N, 206B, 206D, 206N, 206U, 206X, 206ZE, 207J,207L, 207LA, 209B, 210D, 214, 214G, 215, 216, 217 and
218.
264 Electoral Act 1993, s 207LA (emphasis added).
country prided on its anti-corruption status, much like impartiality in public law, the criminal law suggests justice should not only be done but be seen to be done.267
Mens rea offences are not the exclusive form of electoral offences. Throughout Parts 6A and 6B, strict liability offences are present in short hierarchies of offences.268 These are often distinguished in “corrupt” versus “illegal” practices. Practices labelled as “corrupt” tend to have a mens rea element, often including knowledge of information or intention to deceive the Commission.269 Alternatively, illegal practices do not tend to have an associated mens rea. Instead, they usually provide that if the actus reus is met, the defendant is liable unless they can prove one of the supplied defences.270 This is characteristic of strict liability and is further supported by the difference in penalty between corrupt and illegal practices. Corrupt practices can result in imprisonment not exceeding two years, or a fine not exceeding $100,000 for officials or $40,000 for other individuals.271 Persons found guilty of a corrupt practice must also have their name placed on the Corrupt Practices List within the electorate the offence took place for a period of three years and cannot register as an elector – disabling them from voting or standing for Parliament.272 Comparatively, illegal practices can only result in fines, with a maximum of $40,000 for officials and unregistered promoters and $10,000 for all other persons.273
An example of a hierarchical offence provision can be seen below:274
206N Offences relating to return of party’s election expenses and return of party’s allocation expenses
(2) A party secretary who files a return that is false in any material particular is guilty of—
(a) a corrupt practice if [they] filed the return knowing it to be false in any material particular; or(b) an illegal practice in any other case unless the party secretary proves that—
(i) [they] had no intention to misstate or conceal the facts; and
268 Electoral Act 1993, Part 6A and 6B.
269 Part 6A, Part 6B and Part 7.
270 Sections 205F, 205N, 206D, 206N, 206X, and 206ZE.
272 Sections 100 and 80(1)(e).
274 Section 206N (emphasis added).
(ii) [they] took all reasonable steps in the circumstances to ensure that the information in the return was accurate.The illegal practice outlined above is a standard strict liability offence. This places the legal onus on the accused to prove a lack of mens rea (and absence of fault).275 However, not all political financing offences provide an alternative strict liability offence when the mens rea is not easily proven with objective evidence. For example, the offence for donation splitting is limited to a proven intention.276 This is quite common in the general provisions relating to donations.277 Further offences that only provide a mens rea option include failing to identify contributors with the intention of concealing identities (with liability falling to contributors, transmitters and persons involved in the administration of a political party or candidate).278
Another example of a strict liability offence can be seen in anonymous donations:279
207J Offence relating to contravention of section 207I
(1) A person who enters into an agreement... that has the effect of circumventing section 207I(1) or (2) is guilty of—
(a) a corrupt practice if the circumvention is wilful; or(b) an illegal practice in any other case.
(2) A candidate or party secretary who contravenes section 207I is guilty of an illegal practice.
Some offences in the Electoral Act provide that a party is liable of a corrupt or illegal practice if they undertake a certain action or omission “without reasonable excuse”. For example:280
207N Records of party donations
(1) A party secretary must keep proper records of all party donations received by [them].
(2) A party secretary who fails, without reasonable excuse... commits an offence...
While this offence appears to be strict liability, with the onus on the defendant to prove a lack of mens rea – this is not necessarily the case. The initial Summary Proceedings Act 1957 contained a section that explicitly reversed the legal burden to prove excuses for summary
275 Cameron v R [2017] NZSC 89, [2018] 1 NZLR 161 at [62].
276 Electoral Act 1993, s 207LA.
278 Sections 207D, 207F and 207H. 279 Section 207J (emphasis added). 280 Section 207N.
offences, which was repealed in 2011.281 This has yet to be tested in court, but in a recent NZBORA s 7 report, the Attorney-General suggested that including the words “without reasonable excuse” in an offence does not provide for a strict liability offence.282 Instead, this merely places an evidential burden on the accused to provide some evidence of such an excuse, and if this is discharged, the prosecution must then prove beyond reasonable doubt that an excuse did not exist.283 To counteract this evidentiary ambiguity following this report, Parliament’s inclusion of new “without reasonable excuse” offences have sometimes explicitly stated that the legal burden is on the accused to prove the excuse – removing the ambiguity and ensuring the subsection is applied as a strict liability offence.284 Therefore, the Court would be unlikely to take a strict liability approach for the Electoral Act’s “without reasonable excuse” offences.
While the current law sets out mens rea offences for political financing regulation, their effectiveness is disputed.285 Currently, both the specific electoral provisions in the Electoral Act and the general provisions being used under the Crimes Act are failing to deal to the widespread issue of undemocratic behaviour in New Zealand’s major political parties.286
The Electoral Act is seen by the prosecutor, even before the trial commences, to be too high of an evidentiary burden and onus to charge.287 The Crimes Act fails to account for the criminal principles of fair labelling by providing an “obtaining by deception” charge – a property-based offence, when the crux of the issue of political financing is public-law based, with strong implications on the trust we can place in our electoral system and its political parties as components of that system.288 While both acts are criminal, these alternative foundations provide for different implications of the fraudulent acts and are reflected in the penalties provided. These penalties have severe discrepancies between Acts, with “obtaining by deception” resulting in a maximum term of seven years imprisonment, while “corrupt
281 Summary Proceedings Act 1957, s 67(8).
282 Attorney General Arms Legislation Bill: Consistency with New Zealand Bill of Rights Act 1990 (Office of the Attorney General, ATT395/298, September 2019) at 3.
284 For examples, see Films, Videos, and Publications Classification Act 1993, s 123 and 125.
285 Rashbrooke Bridges Both Ways, above n 61, at 6.
286 Serious Fraud Office “National Party Donations”, above n 6; Serious Fraud Office “NZ First Foundation & Others”, above n 6; Serious Fraud Office “Labour Party Donations”, above n 6.
287 Crown Law Solicitor-General’s Prosecution Guidelines (2013) at 6.
288 Simester, Boister and Brookbanks Principles of Criminal Law, above n 182, at 39; Ashworth and Horder
Principles of Criminal Law, above n 182, at 27.
practices” under the Electoral Act result in a maximum term of two years, and “illegal practices” only result in a fine.289
Mens rea offences are crucial to deal with severely criminal actions. Fraudulent or deceptive behaviour which evades the Electoral Act’s transparency provisions should retain their position as truly criminal, mens rea, offences. These offences would combat actions that are resoundingly agreed as counter to New Zealand’s democratic and anti-corrupt mandate. However, unlike the current provisions, these should be labelled for what they are – “fraudulent” or “deceptive” behaviour. These should retain the high evidential burden for the prosecution and should be penalised as mens rea offences – with imprisonment available in the case of individuals, and heavy fines available for both individuals and body corporates.
Actions that lack this fraudulent knowledge or intention should still be criminalised. However, to recognise that the deceptive elements are missing – these offences should be clearly distinguished. Further, to avoid the repercussions of the Attorney-General’s interpretation of “without reasonable excuse” offences, to encourage prosecutors to use these provisions and to allow justice to both be done, and to be recognised as done by the public, I submit that these offences should be clearly labelled as strict liability offences.
A hierarchy of offences within the Act should be provided to clearly provide and distinguish both mens rea and strict liability offences. Further, an alternative, strict liability offence should be provided for actions that are currently only the target of mens rea offences. Specific provisions should also be widened to ensure fewer wrongful actions slip through the legislative gaps. This will increase both transparency and enforceability as those who are unintentionally breaking electoral financing rules will be reprimanded, and those intentionally breaking the rules will be held to public account.
Currently, for several provisions (such as donation splitting), liability only falls on those who intend to deceive the Commission and is often limited to those involved in the administration of a political party.290 In reassessing the offence structure and regulations of electoral laws, a consideration of who should be liable is required. The key contenders for liability are those
289 Electoral Act 1993, s 224.
providing financial contributions, those benefitting from the financing and those directly involved in the administration of the political parties’ finances.
Those at the administrative front of political financing should be held to a higher legal standard as their duties specifically include ensuring that finances and accounting are aligned with the Act.291 While several issues arise in holding political parties criminally liable, parties should be financially accountable for any payments they accept that do not align with the Act’s purpose. Instead of a criminal sanction, this could occur as an account-of-profits type financial contribution. Currently, political parties and candidates are required to supply the Commission with funds in excess of the legal thresholds. This comes into action for both overseas donors (when the $50 threshold is exceeded) and anonymous New Zealand donors (when the $1,500 threshold is exceeded).292 This procedure already allows a balance between transparency and political functionality as it allows donors who wish their identity to remain anonymous to retain their privacy while authorising parties to function and fund their campaigns.293
Instead of relying on moral blameworthiness, this procedure acts like an amnesty for funds received illegitimately against the current electoral regulations. However, in blameworthy situations, this legislative accounting could be extended. Instead, any contribution that breaks or exceeds the electoral rules could be removed from the parties’ account and instead paid to the Commission in recognition of the potential corruption implications. While the current offences have strong implications for individuals, increasing the account-of-profits type contribution would provide an additional deterrent effect for parties as breaching the rules will result in funding loss.
Those providing financial contributions should also be held accountable. Those intentionally seeking to evade the electoral rules should be subject to heavier penalties, with strong criminal sanctions. However, those who fail to follow the rules without ill-intent should be held to account, but to a lesser extent. The purpose of criminalising these actions despite lack of intention is disincentivising the actions rather than punishing these less morally culpable parties.
291 Electoral Commission “For Parties” <www.elections.nz>.
292 Electoral Act 1993, ss 207I and 207K(1)(b).
293 Ian Ayres “Disclosure versus Anonymity in Campaign Finance” (2000) 42 Nomos 19 at 20.
While it seems like the current Electoral Act is a sufficient starting point, by attempting to amend Part 6A and 6B, there is a high risk of tinkering with but not changing the current system
– much like the aforementioned Electoral Amendment Bill.294 Instead, beginning with a clean
slate would be recommended. This new hierarchical structure of offences for electoral financing could be supplied as an amendment to the existing Electoral Act as a new Part, so that they are collated and easy to find. Alternatively, a separate Electoral Financing Offences Act could be introduced. This would clearly distinguish these offences and highlight their existence and relevance to both prosecutors and other impacted parties.
B A Government Funded Model
An alternative option for reform that deserves consideration in theory, notwithstanding that it would be difficult to implement, is whether New Zealand should move to a public funding model for political campaigns and remove the ability for electoral contributions altogether. This would see the most drastic changes to our current funding system and would see the highest taxpayer cost increase – not just for setting up a new model, but for the ongoing funding and financing of campaigns for political parties in the future.
While this model would bring significant financial costs, it is arguably the only solution with full transparency that would see political parties continue to function effectively with no future issues regarding donations and political financing fraud. There would be no ability to fund political parties and therefore no need for public disclosure.295 However, while a certain degree of transparency is crucial for public trust in the electoral financing system and in wider government, this system does come with significant democratic costs.296
A fully government funded electoral campaigning system would require further state funding for political parties’ campaigns in the place of private funding from individual or corporate contributors.297 This would do away with most, if not all, of the political financing regulations
294 Electoral Amendment Bill 2022 (152-1).
295 Grégoire C N Webber (ed) “The Polycentricity of Political Financing” (Thomson Reuters, 2012) 310 at 315. 296 OECD Financing Democracy: Funding of Political Parties and Election Campaigns and the Risk of Policy Capture (OECD Publishing, OECD Public Governance Reviews, February 2016) at 22.
297 Andrew Geddis “Regulating the Funding of Election Campaigns in New Zealand: A Critical Overview” [2004] OtaLawRw 5; (2004) 10 Otago L Rev 575 at 595.
and issues as there would be a removal of the ability to donate. However, offences should still cover potential breaches – for example, if financial contributions are provided to political actors from external persons and not from the government-funded allocation. Criminal offences set up for this purpose would need to have high penalties for a dual purpose. First, to recognise the clear evasion of the laws and second to publicly quash these actions and hold the parties and illegal contributors accountable.
State funding allocation could be determined several different ways. All parties could receive equal funding, or parties could receive funding proportional to their seats in parliament or a proportion of a scheduled poll (such as a Colmar Bruton poll set one year in advance of an upcoming election). If a government funded model is implemented, a determination of funding proportions based upon the previous election’s outcome appears to be the fairest allocation. While it does retain the financial upper hand to those that already have more political influence in the House of Representatives, this is a determination provided by the somewhat recent (two- year prior) general election. Therefore, every eligible voter has the ability to provide input and national resources are not allocated unduly out of proportion to small parties that have less political support.
This government funded system has been previously proposed, with the 1986 Royal Commission on the Electoral System suggesting that state funding be provided to parties to remove the issues around private donations.298 This proposal suggested funding based on the previous election’s results, specifically, one dollar per vote for the first 20 per cent of the actual votes cast, then 50 cents per vote for the next 10 per cent of votes cast.299 This relies on the voter turnout and proportion of votes to determine the funding allocation but sets a party cap at 30 per cent of votes cast. Based on the voter turnout of the 2020 election, this would see a maximum of $723,621.50 per party (at the 30 per cent cap) and a maximum total expenditure of $2,894,486.300 These costs do not align with the current campaign costs – with registered parties currently able to spend up to $1.199 million plus $28,200 for each electorate the party contested. These saw the two main parties spend upwards of $2.3 million in the 2020 General Election.301 If implemented, the recommended allocation from the 1986 report would need to
298 John Henderson, Shane Cave and Murray Petrie National Integrity Systems Transparency International Country Study Report New Zealand 2003 (2003) at 20.
300 Electoral Commission “2020 General Election and Referendums” <www.elections.nz>.
301 Electoral Commission “2020 General Election and Referendums”.
be reviewed and increased to take account of both inflation and the increased cost of campaigning.
This system would see parties that did not reach the five per cent threshold still receive a small funding allocation. This does eliminate the ability for new parties to receive funding, as they would not have any proportion of the vote from the previous year. To remedy this, a small pre- determined fund could be given to parties entering the roll to be used solely for advertisement. This could be open to abuse however, so strict accounting for the use of funds would be required.
Sweden is a clear example of a primarily government funded model.302 In Sweden, 80–90 per cent of political party financing is provided by the public purse, with an estimated average SEK 146 (equivalent to NZD 22) per voter per year or SEK 498 million (NZD 75 million) annually.303 This is one of the highest public spendings on political parties in an established democracy.304 While not necessarily established to reduce electoral financing frauds or scandals, this system has been highly effective in the Swedish electoral context.305
New Zealand’s resourcing can be distinguished from this Scandinavian country by our more limited available public resourcing.306 As New Zealand has far smaller population and lower income taxation rates, they have less governmental resources to allocate to electoral processes and political parties.307 Despite this, New Zealand’s system is similar to Sweden’s in a variety of ways – each parliament has supreme decision-making power in their respective nation, held within a unicameral legislature elected proportionally via a representative democratic vote.308 Sweden also has a similar party structure to New Zealand. New Zealand has two main political parties (National and Labour), with other moderate to minor parties (Green, ACT and NZ First), often requiring coalition or formalised alliance agreements to form a Parliament.309 It is uncommon for a political party in New Zealand to win a single majority, though it occurred in the recent 2020 election. Sweden has a similar political makeup, with two major party blocs
302 Magnus Hagevi “Follow the money: Public subsidies and the changing intra-party balance of power between different faces of the party organisation – the case of Sweden” (2018) 54(2) Representation 159 at 169.
303 Sveriges Riksdag “The Parties at Work” <www.riksdagen.se>.
304 Sveriges Riksdag “The Parties at Work”.
305 Hagevi “Follow the money” at 169.
306 KPMG “Tax Rates Online” (2022) <www.home.kpmg>.
308 Sveriges Riksdag “The Parties at Work”; New Zealand Parliament “Our system of government”
309 New Zealand Parliament “Parliamentary Parties” (2020) <www.parliament.nz>.
existing in their equivalent of Parliament (the Riksdag) until quite recently in their 2019 election and no single majority existing in their Parliament since 1968.310
In Sweden, state financial resourcing is provided not just to parties within the Riksdag but also to those who sit outside of Parliament but have obtained at least 2.5 per cent of the vote in either of the last two parliamentary elections.311 The Royal Commission’s earlier recommendation did not have a lower threshold on those who sat outside of Parliament or who did not receive any seats in the previous election.312
However, the Royal Commission recommendations have not been followed. While New Zealand’s campaigning costs are comparatively inexpensive to other jurisdictions, the decision not to move to the suggested government funded model recognises that this model has significant issues.313 Beyond the surface issues of taxpayer cost, other negative impacts of this system include centralising power and the parties’ resource control to their leaders and paid workers, and diminishing the power of members, volunteers, and other activists.314 Further, the line between party and state is blurred as the parties rely on the state for funding, which could see the voluntary, representative nature of political parties reduced.315
While some other nations, such as Sweden, rely on a government funded model, this is rare. In fact, the most common prohibition on political financing globally is a ban on public funding.316 These bans attempt to ensure that government resources are not misallocated or unduly spent on party campaigns. Despite the uptake of a primarily government funded model in Sweden, even they could not restrict their political funding entirely to a state-based determination and contribution.317
310 Ministry of Finance “We do not accept that Sweden’s future, jobs and the climate are put at risk” (26 August 2017) Regeringskansliet <www.regeringen.se>; Radio Sweden “Christian Democrats willing to talk to all parties, including Sweden Democrats” (22 March 2019) <www.sverigesradio.se>.
311 Sveriges Riksdag “The Parties at Work”.
312 Report of the Royal Commission on the Electoral System 1986, above n 18, at 210.
313 Andrew Geddis “The Regulation of Campaign Funding in New Zealand: Practices, Problems and Prospects for Change” in KD Ewing and Samuel Issacharoff (eds) Party Funding and Campaign Financing in International Perspective (Hart Publishing, Oregon, 2006) 11; Graeme Orr (ed) The Law of Politics: Elections, Parties and Money in Australia (2nd ed, The Federation Press, 2019) at 235.
314 Bryce Edwards “State funding of parties is bad for democracy” (25 October 2018) Newsroom
<https://www.newsroom.co.nz/>.
315 Edwards “State funding of parties is bad for democracy”; New Zealand Taxpayers’ Union “Taxpayer funding for political parties is wrong and should be scrapped” (9 June 2020) Scoop Politics <www.scoop.co.nz>.
316 Magnus Ohman Political Finance Regulations Around the World: An Overview of the International IDEA Database (Institute for Democracy and Electoral Assistance, 2012) at 10.
317 Hagevi “Follow the money”, above n 302, at 169.
Currently, with the cost of political campaigning rising, and the significant cost to the taxpayer, this use of government funding may not be a viable option to meet the costs of campaigns. Further, removing the ability for members of the public to provide political donations or loans could be seen to impact the democratic mandate of politics.318 Providing these funds is recognised as a valid form of political participation in the New Zealand climate and removing this ability could see a reduction in political participation.319 Unlike individuals who have the ability to vote in political elections, this removes the ability for corporate bodies to directly support a political party.320 Looking at the continuing issues in New Zealand’s political financing systems – regardless of previous reforms – it may be tempting to turn to a new system which removes the involvement of financial contributors at the ground level. While attractive at face value, this system reduces the political participation ability for New Zealanders and has both democratic and political power implications that cannot be overlooked.
New Zealand has historically not seen parties whom the public do not support enter parliament regardless of the deep pockets within those parties. For example, The Internet Party never received a high enough vote to enter the House despite substantial financial backing by internet pirate Kim Dotcom.321 This suggests that New Zealand does not need to be overly concerned about large financial contributors aiding small parties – particularly where these contributors are made publicly known and the voters have transparent and accurate information about the parties. While New Zealand currently has issues in their political financing, the heart of the issue is the lack of public awareness and transparency – not the contribution amount or the nature of contributors. Therefore, to tackle this problem, a reduction or elimination of certain contributions (or contributors) is unlikely to be demonstrably justifiable for the democratic cost.
C A Government Agency for Administrating Funding
The third option for reform would be to require a state body to handle all political financing before it is distributed to the political parties themselves. This option would still require
318 Richard Mulgan (ed) Politics in New Zealand (Auckland University Press, 2nd ed, 1997) at 248-249.
319 Chapple, Prieto Duran and Prickett Political donations, party funding and trust in New Zealand, above n 21, at 6.
320 OECD Financing Democracy, above n 296, at 22.
321 Valentina Cardo “Technology, popular cultural and everyday life: The electoral defeat of New Zealand Internet MANA” (2018) 23(1) Inf Polity 67 at 67-80.
electoral funding rules, but these would primarily focus on the regulations guiding the agency, and specific rules and associated penalties for parties breaching these rules or unlawfully receiving contributions in the first instance.
The state body would deal with political financing administration including recording, reporting and disclosure of contributions. This would see parties removed from the day-to-day handling of administrative affairs and can instead focus on their own party finances. This should, in theory, reduce obligations on parties, candidates and contributors, as the onus instead rests on the agency to ensure that the rules are complied with and that non-compliant contributions are returned to the contributor or retained by the agency.
This could either be run through the Commission or through a newly established state body and would take the power away from the parties to break the regulations. For the purposes of this dissertation, I will refer to the Commission when discussing this third-party administrator.
All financial contributions intended for political parties or candidates would be supplied to the Commission under this model. This would streamline the political financing administration process as the Commission would then undertake investigations where needed to dispel any suspicions around overseas donors and check other identifying details before passing these on. While this does not increase the transparency on smaller donations, the system of reporting would be more transparent and rigorous. Therefore, the provision of identifying details and disclosure of contributions and contributors over the regulated threshold are more reliable and thus see a greater degree of ‘true’ transparency and accountability to wrongdoers.
This would also allow for new consideration around anonymous donations.322 As all contributions would be first supplied to the Commission, Parliament has the option during this remodel to legislate that all contributions require the contributor’s identity to be shared with the Commission, and that only contributions over the specified threshold are to be publicly disclosed. This would allow for greater enforcement with the necessary provisions, as the agency could keep track of all contributors. Further, this would reduce the administrative burden currently surrounding investigating anonymous donations if there were “reasonable grounds to suspect” that the contributor is an overseas person.323 This could also provide public
322 Electoral Act 1993, s 207I.
assurance that there are no breaches of the rules occurring through donating anonymously – such as splitting donations of a singular person to below the disclosure threshold or the risk of overseas persons donating as anonymous donors.
Political actors could raise concerns in the potential delay of finances being provided to the intended recipient if a third party has to handle the contributions in the first instance. A set timeline, such as a 10-day limit between contributions being provided to the Commission and its provision to the party or candidate should be stipulated to give clarity to the political actors and remove these concerns. Similar to the Official Information Act scheme, where a genuine concern arises around meeting this deadline for a specified reason (such as a warranted investigation into a donor), this should require notification to the party or candidate of the delay with a qualifying reason.324 This would encourage an efficient system with minimal impact to the functionality of political parties using these contributions.
This model would still allow grey areas for in-kind (non-cash) donations, such as goods or services provided at a discount, credit provided on more favourable terms than normal or where the party or candidate provides goods or services at a marked-up price.325 These donations cannot always be provided through third parties. Instead, legislation could specifically provide for the accounting and disclosure of these donations. Alternatively, where practicable, these donations once they had become monetary (e.g., after goods are sold) could be provided to the statutory body. However, this double-handling of funds by parties is unlikely to increase transparency and would come at the cost of hindering the system’s functionality. Further, as goods directly provided for the parties’ campaigns (e.g., billboards or pamphlets) and other services and expertise (e.g., graphic design work) cannot be physically provided to the third party, accounting and disclosure of some contributions to the party will already be required – even if the statutory body deals to all financial donations.
This model will also still see financial contributors liable if they attempt to evade the financial thresholds for donations or loans or attempt to split donations in order to abuse this financing system. Therefore, clear legislation would need to be created that specifically targets financial contributors in these instances of abuse, or those that attempt to thwart the Act’s purposes.
324 Official Information Act 1982, s 15A.
325 Chen Public Law Toolbox, above n 209, at 140.
While the Commission could be provided the responsibility of investigating potential wrongdoing at the first instance, they should not be involved in prosecutorial processes or decisions. Instead, they should retain their obligation to notify the New Zealand police when an offence is likely to have occurred and police can further the investigation and decide whether to prosecute – particularly for the strict liability offences. However, if a mens rea offence appears present and has sufficient public interest to be considered “serious or complex” fraud then this should be passed to the SFO.326While an agency would have financial costs to establish or (if the Commission is used) to modify, the costs of this reform and ongoing costs of administration over political financing could be funded by a levy placed on all political contributions. Either a small percentage of each contribution could be taken as a levy, or parties could have to provide a cost at the end of each financial year or electoral cycle to account for the contributions they have had processed (similar to the income tax model).327 To reduce the administrative burden on parties to calculate this correctly, and to reduce the double-handling of money, a direct levy appears the preferable option.
While this would require more than just tinkering with the current laws, and instead see donations dealt with through an entirely different system, this is not outside the realm of possibility. Education and awareness of this change would be crucial to ensure that the statutory body has the donations provided to them directly by the contributors.
This system would see a shift in the power balance of the contributors. This model of a governmental agency which acts as an administrative third-party handler of political financial contributions appears to be an effective and reasonable middle-ground option. While this revamps the electoral financing system, it does so without reducing the democratic mandate of contributors and increases transparency without impacting political functionality.
326 Serious Fraud Office Act 1990, purpose.
327 Inland Revenue “Introduction to taxes and levies” <www.business.govt.nz>.
A visual representation of the agency model can be seen below:
Donors
Government Agency
Roles:
Political parties
Fig. 1: Government Agency Model for Electoral Funding.
Lenders
Political candidates
D The Recommended Option
In considering the options, I recommend a shift to a government agency model for electoral funding. This model provides greater public transparency without unduly impacting political functionality. While the government department has the administrative burden, this should be supported by offences for other actors. A hierarchical series of strict liability and mens rea offences should be provided for any breaches that evade the system or fail to account for contributions that are provided outside of the system.
Conclusion
Electoral funding underpins New Zealand’s democratic system. However, this only reinforces democracy when partnered with clear public transparency and the ability to enforce criminal sanctions when any breach has implications for bribery or corruption. There is no contention that issues are embedded throughout New Zealand’s current electoral funding system. Regardless of which reform is determined as the most suitable, a reform is clearly required. However, I recommend that electoral funding should remain as a viable option for political participation. This opportunity for reform allows for the consideration of what an effective electoral financing legislation framework should look like to account for both transparency to the public and financial benefit to political parties.The Minister for Justice has agreed to a substantive review over the next two electoral periods.328 This provides the optimal opportunity to reprioritise electoral principles, see reform occur and implement changes at the base level to revitalise electoral funding. I suggest that these reprioritised key principles rely on the foundations of public transparency and political functionality. Transparency provides an understanding to the public of what is occurring behind the scenes of political parties and candidates and is both a symbol and practice of democracy. Functionality is also crucial to ensure that parties are able to run effectively, and therefore to allocate resources to represent New Zealand’s voices.
After turning to the balance of these principles, the recommended reform would be to establish a government department (or a subsection of an existing department) to handle political financing and act as the administrative agent between the private contributors and the political parties and candidates. Governmental departments have previously been tasked with reviewing and auditing party records (the Commission) and with prosecution of electoral breaches (police and SFO). However, a department is yet to be provided the ability to administrate for electoral funding. This agency model would increase transparency as the public can rely more on the agency than parties to adhere to the administrative rules. Resources could also be allocated to thorough identity checks and public disclosures. Further, the political functionality of the parties would not be negatively impacted as they would still have access to the private funds of political contributors to fund their campaigns and staffing. This agency model should see reform in conjunction with the new hierarchy of offences to ensure that political actors and
328 Kris Faafoi “Government to review electoral law”, above n 8.
adjacent persons are easily held liable with adequate penalties – whether they breach the rules with the requisite intention or without.I submit that providing an option for private electoral funding should be continued as an appropriate form of political participation. While it is recognised that the integrity of the current system is prejudiced, a compromise from both sides – of transparency and functionality – will find a happy medium and allow for New Zealand to have a more legitimate and effective electoral financing system.
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D Chapters in Books
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Simon Chapple and Thomas Anderson “Who’s donating? To whom? Why? Patterns of party political donations in New Zealand under MMP” (2021) 17(2) PQ 14.
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Andrew Geddis “Regulating the Funding of Election Campaigns in New Zealand: A Critical Overview” [2004] OtaLawRw 5; (2004) 10 Otago L Rev 575.
Andrew Geddis “Rethinking the funding of New Zealand’s election campaigns” (2007) 3(1) PQ 3.
Andrew Geddis “The State of Freedom of Expression in New Zealand: An Admittedly Electric Overview” [2008] OtaLawRw 5; (2008) 11 Otago L Rev 657.
Andrew Geddis “The Electoral (Finance Reform and Advance Voting) Amendment Bill” (2010) 6(3) PQ 3.
Andrew Geddis “Funding New Zealand’s Election Campaigns: recent stress points and potential responses” (2021) 17(2) PQ 9.
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Ron Johnston and Charles Pattie “Money and votes: a New Zealand example” (2008) 27(1) Political Geogr 113.
Timothy K Kuhner “Representative Democracy in an Age of Inequality: why legal reforms are needed to protect New Zealand’s system of government” (2021) 17(2) PQ 21.
Magnus Hagevi “Follow the money: Public subsidies and the changing intra-party balance of power between different faces of the party organisation – the case of Sweden” (2018) 54(2) Representation 159.
Nicola Lacey “Space, time and function: intersecting principles of responsibility across the terrain of criminal justice” (2007) 1 Crim Law and Philos 233.
Roderick Munday “The Roskill Report on Fraud Trials” (1986) 45(2) CLJ 175.
Graeme Orr and Andrew Geddis “Islands in the Storm? Responses to Foreign Electoral Interference in Australia and New Zealand” (2021) 21(1) Elect Law J 82.
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Shrabani Saha, Rukmani Gounder, Neil Campbell and J J Su “Democracy and corruption: a complex relationship” (2014) 61 Crime Law Soc Chang 287.
Leonid Sirota "Review of In Search of Consensus: New Zealand’s Electoral Act 1956 and its Constitutional Legacy, by Elizabeth McLeay” (2018) 33(2) Australasian Parliamentary Review 174.
Joo-Cheong Tham “Regulating Political Contributions: Another View from Across the Tasman” (2010) 6(3) PQ 26.
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F Parliamentary and Government Materials
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G Official Information Requests
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I Internet Resources
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Other Internet Resources
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Linda Lew “Fraud probes into New Zealand’s main parties raise questions over Chinese money and influence” (19 July 2020) South China Morning Post <www.scmp.com>.
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Zachary Meskell “Is New Zealand really the least corrupt country in the world?” (28 April 2021) The University of Auckland <www.thebigq.org>.
Ashlynne McGhee “The missing millions: Political donations likened to money laundering” (1 February 2017) ABC News <www.abc.net.au>.
Pete McKenzie “Pete McKenzie: Politics rife with ‘dark money’” (3 June 2021) Newsroom
New Zealand Herald “Māori Party donations referred to Serious Fraud Office” (28 April 2021)
New Zealand Labour Party “Who is the Waitemata Trust?” (12 September 2006) Scoop Independent News <www.scoop.co.nz/>.
New Zealand Taxpayers’ Union “Taxpayer funding for political parties is wrong and should be scrapped” (9 June 2020) Scoop Politics <www.scoop.co.nz>.
Max Rashbrooke “A weeping sore: Jacinda Ardern must clean up New Zealand’s political donations mess” (19 November 2019) The Guardian <www.theguardian.com>.
Max Rashbrooke “A brief history of New Zealand donations scandals” (4 March 2020) The Spinoff <www.thespinoff.co.nz>.
Ministry of Finance “We do not accept that Sweden’s future, jobs and the climate are put at risk” (26 August 2017) Regeringskansliet <www.regeringen.se>.
Radio Sweden “Christian Democrats willing to talk to all parties, including Sweden Democrats” (22 March 2019) <www.sverigesradio.se>.
Joshua Riddiford “’Party donation’ to be clarified” (8 September 2022) Capital Letter
Sveriges Riksdag “The Parties at Work” <www.riksdagen.se/>.
Katie Todd “Labour Party donations case: suppression lapses for three defendants” (24 February 2022) RNZ <www.rnz.co.nz>.
Transparency International “Corruptions Perception Index: New Zealand” (2021)
Transparency International “Pandora Papers: 10 countries that urgently need to act” (8 October 2021) <www.transparency.org>.
Claire Trevett “Electoral bill ‘backwards step’ – Law Society” (28 September 2007) New Zealand Herald <www.nzherald.co.nz>.
Claire Trevett “Political donations: National, Act cry foul over Government changes to donations rules, Greens want a cap” (27 June 2022) NZ Herald <www.nzherald.co.nz>.
Andrea Vance “National says political donations reform will have ‘chilling effect’ on NZ elections” (20 June 2022) Stuff <www.stuff.co.nz>.
Lewis Verduyn “NZ Asset Sales Policy Began on Wall Street” (16 January 2012) Scoop Politics <www.scoop.co.nz>.
Appendix 1: Serious Fraud Office Investigation Framework.329
329 Serious Fraud Office “Legislation”, above n 43.
Appendix 2: Summary of Total Party Donations.330
330 Electoral Commission “Party donations and loans by year”, above n 60.
Appendix 3: Current regulations for political parties and candidates in the Electoral Act 1993.331
331 Ministry of Justice Proactive Release Relating to Changes to Political Donation Settings Prior to 2023 (5 August 2021) ELP-15-02 at 5.
Appendix 4: Identified vulnerabilities in the current political donation system.332
332 Ministry of Justice “Potential changes”, above n 68, at 5-6.
Appendix 5: Public survey responses for framework questions.333
333 Ministry of Justice “Key Elements of Framework”, above n 124, at 6-8.
Appendix 6: Proposed changes to address vulnerabilities of immediate concern.334
334 Ministry of Justice “Potential changes”, above n 68, at 7.
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