Richlisters speak out on why they splash big cash on political parties

Wednesday, 20 March 2024

New Zealand politics runs on private money, but never before has the political right amassed so much from wealthy donors. In this two-part series, Stuff political reporter Bridie Witton asks what the largest donors are getting in exchange for their cash, and, what a surge in private donations means for public trust. The second part, which looks at Labour and the Greens, will be published on Thursday.

Back in campaign mode, Prime Minister Christopher Luxon had spent the day bouncing from stall-to-stall at the Central Districts Field Days. He was gregarious, chatty and listening intensely, even racing a ride-on lawnmower and playing Connect 4 with a digger.

For his last engagement, he took a five-minute drive to open a new Built Smart factory in Feilding, a family-owned company specialising in transportable homes.

Luxon brought his upbeat attitude and Trade Minister Todd McClay with him, taking photos and chatting with dozens of staff, before making a four-minute speech during the formal part of the opening.

Brendan Lindsay was at the opening with his wife, Jo. The Lindsays are philanthropists and support a number of charitable organisations.

Brendan founded Sistema, the food container company which exploded and was sold to American company Newell for $660 million in 2016. He has a 30% stake in Built Smart. He is also a regular donor to the National Party.

“Brendan and Jo Lindsay… You are top New Zealanders and I am very proud to call you my friends and Amanda [Luxon] and I just so enjoy spending time with you as well,” Luxon said.

Donations are the lifeblood of political parties. They fund day-to-day activities and in an election year, fund billboards, digital advertising, consultants to advise on election messaging and polling.

But the widening imbalance between National and Labour - the two main parties - and the higher rate of donations from wealthy individuals may raise questionsabout who donated what, their motivations for doing so and whether the outside interests of MPs are influencing the political process.

This electoral cycle, National and ACT dramatically outpaced the left in the race for financial contributions raising $4.50 for every $1 raised by Labour and Greens from big donations, according to Max Rashbrooke, a Victoria University academic who analysed publicly-available Electoral Commission data.

Andrew Geddis, a law professor at the University of Otago who is on the independent electoral review panel, said the high rate of wealthy donations this electoral cycle increased the risk of a scandal. This was because it increased the likelihood someone might try and unduly influence policy.

If there was one, this would further chip away at public trust in democratic processes.

“Trust in the electoral system is incredibly valuable and it’s incredibly difficult to win back,” he said.

But while rich listers Stuff spoke with didn’t expect anything as overt as policy or law change as a result of donating, it is clear they are often given a level of political access few other New Zealanders enjoy.

Rashbrooke, who with colleague Lisa Marriott​ released Money for Something: A report on political party funding, said it was a truism that people were socialised by those they spent time with, including ministers.

Law makers would be influenced by who they were surrounded by “even if they are not talking about the nuts and bolts of policy”.

This had a socialising effect, which would ultimately influence what laws were made and what policy programs were prioritised, he suggested.

He believed reform was needed to make the opaque world of political donations clearer.

National amassed $4.974 million from big money donors between the 2020 and 2023 general elections - a sizable chunk of the $8.7m National raised from early 2021 (the 2023 data does not include donations below $20,000).

ACT, acknowledged as the most likely coalition partner during the election campaign, raised more than $4.7m. Together, National and ACT raised more than $13.4m - a haul which towered over Labour and the Greens who raised just $2.85m together.

A long-time National donor, who spoke on condition of anonymity, said he was not seeking to personally gain from his investment in National.

“I don’t like the idea of buying politicians like they do in other parts of the world,” he said, adding that in New Zealand a donor would get “a handshake and that’s it” from politicians.

The man said he donated to National because it aligned with his values - he wanted to see more things being built in New Zealand, by New Zealanders. He did not have an interest in developing policy and was only interested in politics at a “high-level”.

He was happy to leave it up to politicians to come up with the finer details. “I don’t have the facts,” he said.

He had donated to National when John Key was prime minister, after meeting and being impressed by him.

He thought more people should donate so political parties had a stronger chance of getting their message to the electorate, because he felt the media were biased.

“I agree with Winston Peters with the slant with the media, it has gone too far,” he said.

Another rich lister and businessman, who gave a six-figure sum to National, also said he did not expect anything from his donation. The multi-millionaire had also donated to ACT.

He donated because he was deeply concerned about the direction the country was heading in, believing “more competent and disciplined management” was required.

“I believe in a government that strives to provide equal opportunity, not equal outcomes,” he wrote in an email.

Paula Bennett, a former deputy prime minister, was significantly responsible for National’s impressive gains, raising $1.8m in three weeks by targeting private donors.

She secured six-figure donations from some of the nation’s wealthiest, including Graeme Hart, Murray Bolton and Nick Mowbray. Auckland businessman Warren Lewis gave $500,000 - believed to be the largest-ever single donation in the country’s political history.

But Bennett didn’t want to talk about it when Stuff called. “I am not commenting on it,” she said. “I haven’t got anything to say, really.”

But ACT Party leader and chief fundraiser, David Seymour, was prepared to speak openly.

He said donations came in through fund-raising events, from targeting wealthy people directly and from wealthy people getting in touch.

He used one wealthy donor, who regularly contributes, as an example. They’d contacted him by email, asking to donate money because they backed the party’s stance on free speech.

“Somebody just emailed me out of the blue, and said, would it be appropriate to give the party $35,000? I replied, absolutely, it would.”

Seymour, who is now the minister for regulation and associate minister for justice and education, said he would catch up with the wealthy donor, who would offer more money.

“Subsequently, I've maintained a relationship with that person. I'll probably catch up with them about once a year,” he said.

“Generally, they'll say, well, would you like more support? Of course, I say yes. And they generally give us more money. So that would be an example that was unsolicited.”

He did not believe the person’s political views would unduly shape his own, or have any bearing on policy. “It's possible, but it's no more likely than anyone else to be honest,” he said.

Seymour also used the example of Dame Jenny Gibbs, a regular contributor to his party. He recalled the day the first met, in 2005.

“I'd been at an ACT meeting where I said I think our party needs to be more socially liberal and she came to me and she said ‘I agree with you. I am socially liberal too’. Jenny and I have known each other for a very long time. Again, I don't think she's really changed my views. We met in part because of shared views.”

The independent electoral review panel, lead by Deborah Hart, made a number of recommendations in June that it said would deliver for voters - who were reported to have a low level of trust in the political donations process. One of its recommendations was to cap the donations an individual could give to a party or person at $30,000 per electoral cycle.

It delivered its final recommendations in January, and Justice Minister Paul Goldsmith immediately ruled out four of them - including taking any action on lowering the voting age to 16, allowing all prisoners to vote and stand for Parliament. But he did not rule out a cap on political donations.

But Seymour, who will be deputy prime minister for the second half of this political term, remains vehemently opposed to all those recommendations.

He said donations helped political parties “reach past the media of the day, past other parties, past the prejudices of some interest groups and use money to talk directly to voters” and that this was one of the “important safety belts” in democracy.

Donations are seen as a part of political expression, which is backed in the Bill of Rights, and by the electoral review panel.

But the panel members also believed there needs to be a more transparent playing field. “Even the sense or perception of undue influence can undermine trust in our democratic processes,” they wrote in their June report.

Luxon brushed off questions about political donations from wealthy donors, saying the party also received donations from everyday people too.

“They wanted change and that is what they are getting,” he said.

He didn’t elaborate on whether he has ongoing relationships with any of the donors, but said all the donations were legal and handled by the party.