On a theoretical way to reduce political donation scandals
Political donations have become a reliable source of scandal. Last Monday, the courts continued name deletion of six people linked to a donation made to the Labor Party which led to Serious Fraud Office (SFO) charges. This year, the Maori Party has not adhered to the Electoral Commission’s timetable for reporting donations. Over the years, New Zealand First has been at the center of several donation scandals, and charges brought by the SFO over the latest continue to make their way through the courts. The fallout from the 2018 National Party donations scandal also led to charges being laid against the SFO.
A few patterns in these events have become evident. In some cases, donors were reportedly encouraged to split their donations into smaller packages, to circumvent the legal maximum of $15,000 for any donation. Other alleged tricks involved the donations being funneled to an intermediary body, from where the money could be distributed as needed. Clearly, the repeated allegations of wrongdoing (and subsequent SFO investigations) signal that there is a need for systemic change.
But how? So far, the main suggestions for how our politicians might be weaned from their heavy reliance on private donors all involve methods of publicly funding political parties. Obviously, this would not please the public, who would rather see their money spent on social needs and public services. However, there is another way (at least in theory) to reduce the need for MPs and political parties to solicit donations from wealthy donors. After all, there is always a risk that these donors could reasonably expect their generosity to be rewarded with policies to their liking. Solution: Why don’t all MPs pay a 10% tithe on their earnings? Why don’t they volunteer to pay at least some of their party’s running costs and election campaign needs by opening their own wallets?
I know, the Greens already tithe their MPs. Yet, for some reason, the idea of putting a tenth of an MP’s salary into their party’s fight fund never caught on. He really should. This would save these parties from going out with caps in hand to solicit donations on the cocktail circuit. Plus, audiences would surely applaud them for putting their hands in their own pockets. It would also be very much in line with the “user pays” philosophy that some political parties seem to hold so dearly. Rightly, the public already thinks that MPs are overpaid, both in base salary and benefits. They might feel a whole lot better about Parliament if all of their money didn’t just allow MPs to get high.
If tithing were to be made mandatory and extended to all MPs, it would probably take a private member’s bill (hello, Chloe Swarbrick) to rewrite the rules on MP compensation to clarify how such a scheme would work, in the practice. In itself, however, it would be an interesting exercise in transparency. This would reveal which MPs – if the idea of tithing was presented as a vote of conscience – or which parties (if voted along party lines) would support or oppose it. The same transparency benefits would accrue if tithing were left as a voluntary measure, with compliance recorded as a footnote in an MP’s annual register of financial interests.
How would that work?
Here’s one way it might work. Each party would receive and manage funds from its MPs and report annually to the Electoral Commission on how these funds were spent. Voluntary private donations would still be possible, but would be paid into a separate secondary account. Only when the tithe fund was depleted could the sub account begin to operate. Again, the Election Commission would be alerted when and if the tithing funds – which are taxpayers’ money after all – have been exhausted.
The money involved in tithing would be substantial. The following amounts should be considered approximate amounts and not precise figures. For reference, I used the latest salary scale payable under Article 8 of the Members of Parliament (Remuneration and Services) Act 2013. On the contrary, the estimates are conservative. For the sake of simplicity, I have ignored additional amounts paid, for example, to party whips, select committee chairs, and party leaders based on the number of MPs they command.
Labor: In its caucus, the Labor Party has 65 MPs. The Prime Minister receives a base salary of $471,049 and the Deputy Prime Minister $334,734. Some 24 members of the Labor caucus ministers, 20 of them inside the Cabinet and four outside it. Excluding the prime minister and deputy prime minister, the other 18 in cabinet each get $296,007, while the other four outside cabinet get $249,839. The two Labor undersecretaries each receive $194,374. The president also gets $296,007.
If the individuals concerned paid one-tenth of their pre-tax base salary into party coffers, the corresponding amounts would be
- PM 47 $104
- Deputy Prime Minister $33,473
- Cabinet ministers within the Cabinet. $29,600 x 18 = $532,800
- Non-Cabinet Ministers $24,983 x 4 = $99,932
- 2 assistant secretaries: $19,437 x 2 = $38,874
- The President: $29,600
That would give a grand total of $781,383 before tax, coming from ministers and undersecretaries alone. Then add the remaining 38 deputies. To put it simply, let’s assume that they all receive the basic MP salary of $163,961. One-tenth of that equals $16,396, and multiplied by 38, that equals $623,048.
In total, the grand total before tax for the Labor Party of executive tithe and backbench Labor MPs would be $1.404 million. Even after tax, the amount involved would lessen the need for multiple raffles and cake-selling booths. Specifically, it would also greatly reduce the need to solicit donations from wealthy private donors.
National: National has 33 MPs in its caucus. The Leader of the Opposition is paid at the same level as a cabinet minister in the cabinet. ($296,007.) That leaves 32 MPs, which for simplicity we’ll assume are on the councilors’ base salary of $163,961, although a few will be on the top party whip/chair of the remuneration grades of the select committee.
- Leader of the Opposition $29,600
- MPs: $16,396 x 32: $524,632
For National, that would give a grand annual total of $554,232 before tax.
Part of act: The Party of the Act has 10 deputies. The party leader receives a base salary of $179,713, but as mentioned, each party leader receives additional payments per MP. For each party leader commanding (a) up to five MPs, this means an extra $2,138 each (b) between 5 and 23 MPs, an extra $1,430 each and (c) more than 23 MPs, an supplement of $709 for each MP.
But let’s keep the tithing calculations clear and simple: .
MPs: $16,396 x 9 = $147,564
Grand total: $165,535
Green Party: The Green Party also has 10 MPs. And as mentioned, the Green Party is already tithing its MPs’ salaries. The Greens have two non-cabinet ministers. (about $249,839)
Minister $24,893 x 2 = $49,966
Backbenchers: $16,696 x 8 = $131,168
Total grant: $181,134
maori party: The Maori party has two deputies, both co-leaders. I calculated it conservatively based on a party leader on a base salary of $179,713 and a backbencher on $163,396. The tithe would yield $17,971 plus $16,696, for a grand total of $34,567.
All in all, let’s assume the impossible, that is, that tithing was in practice in all political parties. This would mean that a annual the pre-tax total of the $2.5 million in taxpayer funds already allocated would be returned to circulation in the Parliamentary Precinct and on the grounds. This might not solve all of every party’s cash flow problems or completely satisfy their seemingly insatiable need for campaign finance. But it would (a) improve Parliament’s image by removing some of the pressure on MPs’ salaries (b) reduce the outrageous need to drive out private donors and (c) force political parties to practice what they preach when it comes to pulling yourself up by your own bootstraps.
Tithing could also be a different route to achieve the populist goal of reducing the number of MPs in Parliament. This way you would keep the same number of MPs, but – via the user pays tithing mechanism – they would be on reduced rations. Hey, that’ll never happen, but it’s worth thinking about.
Net dreams and nightmares
Since mid-January, when Olivia Rodrigo’s ballad “Drivers License” suddenly exploded (and became the hottest single in the world since “Old Town Road”), she hasn’t been on the wrong foot. As widely noted, his debut album
Acid is a collection of thematically linked tracks inspired by the crushing pain of having your heart ripped out and trampled on for the first time. (Rodrigo is perhaps Taylor Swift’s most talented follower.) Here’s the
Pennyr opening track from the album “Brutal” on which – parental warning – the young Disney princess deploys a very effective four-letter word.
Speaking of net phenomena, this NYT story is a fun/terrifying story about how a 17-year-old’s open invitation on Tiktok to his birthday party – hey everyone, you’re welcome to Adrian’s Kickback – has, within days, garnered 280 million views and motivated tens of thousands of people – ready teenagers (some in flight, some in cross-country driving) to converge on the designated site of Adrian’s Kickback. A police riot ensued. Adrian has hired a manager and is now considering a career as a social influencer. For your interest,
here is the link to the TikTok video who set it all in motion. It’s brutal there.
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