Hon ANNETTE KING (Minister of Justice) : I move, That the Electoral Finance Bill be now read a second time. I believe it is a strong affirmation of the strength of democracy in New Zealand that there has been such considerable public interest in this bill. The Justice and Electoral Committee received written submissions from 575 individuals and organisations and sat for extended hours to ensure that 101 oral submissions could be heard. The committee listened to these submissions and then consulted the Human Rights Commission about changes that advisers had proposed in the departmental report on the bill.

The bill is now reported back to the House, and the report recommends that a number of changes be made. The Government is listening, and believes that the committee’s recommendations will meet the concerns raised by a very large number of submitters. I would like to emphasise here that Parliament decided that the committee’s membership should be expanded to include representation from all parties in Parliament. The recommendations, therefore, reflect the joint views of many parties in this House. The amendments recommended by the committee are supported by the Government.

This is most important legislation for New Zealand. This bill does not restrict free speech. It simply restricts rights to purchase speech through advertising. This is done to safeguard our democracy by keeping the undue influence of money in politics to a minimum. That is what a level playing field means, and the Government believes that most New Zealanders understand and support this principle. The reforms help to bring New Zealand into line with other democracies as a place where every voter can have his or her voice heard fairly, regardless of his or her personal circumstances, and where every person can hear everyone else’s voice clearly and transparently. I was pleased to note that many of the submissions support the aims of the bill to help promote participation in democracy and to clean up New Zealand’s electoral system and protect it from abuse. I thank the committee for approaching its task in a multipartisan way and for sitting for long hours.

I now turn to the key recommendations made by the committee. Firstly, the committee has recommended that the definition of “election advertisement” in clause 5 be narrowed so that the bill regulates only those who campaign to influence the outcome of a general election. Many submitters said that if this one change was made, many of their concerns about the bill would evaporate. Many groups, such as the National Council of Women, Greenpeace, and the Coalition for Open Government, have said that the changes made to the bill address their concerns. The product now is legislation that promotes freedom of expression by ensuring that a few wealthy individuals cannot use their money to buy an election and swamp the voice of ordinary New Zealanders.

The committee has also recommended changes to the regulation of third parties. Key recommendations are an increase in the threshold for registration as a third party and an increase in the total expenditure cap for third parties. Any third party that wishes to engage in election advertising will need to register with the Electoral Commission if it plans to spend more than $12,000 during a regulated period. In addition, third parties will be able to participate in our electoral system and will be permitted to spend $120,000. These are important changes. These new levels represent a reasonable balance between the ability of third parties to participate in the electoral process in an open manner, and ensuring that wealthy interests do not exercise disproportionate influence so that a few can use their money to buy an election. Amendments are also recommended to ensure that young people under the age of 18 can be involved in the electoral process through the third party regime. Young people should be encouraged to participate in our democratic processes, and I thank the committee for addressing this important issue.

In respect of the donations regime, the committee has also proposed strict new rules on political funding. These are important and far-sighted changes. The overwhelming message in submissions to the committee was that the public want much stricter rules in this area. Ultimately, greater transparency about the sources of political funding will lead to increasing public confidence in our democracy. The Government supports the committee’s proposals. First, there is to be a ban on anonymous political donations over $1,000 made directly to the candidate, the party, or the third party. This will prevent significant anonymous donations from being made directly to political parties, candidates, or third parties. Alongside this, the committee has recommended that, where a person wishes to make an anonymous donation of greater than $1,000 to a political party or third party, it must be passed through the Electoral Commission to ensure that the donation is truly anonymous. Donations made in this way will be subjected to overall caps. Thirdly, a ban on political donations over $1,000 from overseas persons has been recommended. This is very important, as it means that the influence of foreign money on our electoral processes will be kept to a minimum. Finally, the committee has recommended stricter disclosure rules for donations from secret trusts, which was a subject raised across a very large number of submissions.

The committee has not recommended any change to the regulated period proposed in the bill, which will run from 1 January where the polling day falls after 31 March in the third year of the electoral term. The Government considers this to be a very important part of the bill as a whole. It will address a significant weakness in the Electoral Act where, following the announcement of a general election, a 3-month regulated period applies for the 3 months preceding the polling day, which effectively creates an incentive for political parties and third parties to undertake significant election activity during the time before the regulated period begins. This effectively allows wealthy individuals to start campaigning long before an election, without that expenditure being recorded in a return. The approach in the bill also has the advantage of certainty, as it will be clear to all participants when the regulated period commences. Election year is election year, and people will know that from 1 January the rules in the bill will apply.

Many of the concerns and submissions about the regulated period in the bill were closely associated with a broad definition of “election advertisement”. People said that a long, regulated period combined with a broad definition of election advertisement might be problematic. The concerns in the submissions are therefore substantially addressed by the committee’s recommendation to narrow the definition of election advertisement, and many submitters—the Coalition for Open Government is one example—have publicly recognised that since the bill was reported back.

In relation to MPs acting in their capacity as MPs, I recognise that aspects of the bill as reported back present interpretative and practical challenges. For instance, the Electoral Commission and the Chief Electoral Officer both want clarification in the bill of the term “in his or her capacity as a member of Parliament”. There is no doubt that much of what members do is about serving and communicating with the electorate that put them there, and not about persuading it to return them to office. The phrase about an MP acting “in his or her capacity as a member of Parliament” is used in other legislation, so to define it in this bill may have unintended consequences elsewhere. The select committee attempted to address this issue through its commentary, but the general thrust may still be open to interpretative difficulties. None of us want to see the Americanisation of election campaigns, where elections become something fought through the courts rather than focused on record, policy, and leadership. In my view, “capacity as a member of Parliament” refers to our participation in the business of the House and electorate, and in other representational duties, and to our work in our capacity as members of the executive or as Opposition spokespersons, to the extent that that interacts with the business of the current Parliament and excludes statements of policy made outside the House that are intended to be enacted by a future Parliament.

Another issue is the commentary on the inducement to vote. In my view, an inducement to vote exists only when a policy statement is tied explicitly by the member to voting, the election, or an electoral outcome. I certainly expect electoral agencies to consult with Officers of Parliament and issue guidance on the practical applications of this definition.

The penalties for corrupt practices have also been changed in this bill. Again, a strong message came through in the submissions that penalties for serious electoral offending should be much higher. The committee has therefore recommended that a maximum term of imprisonment for a corrupt practice should be increased from 1 year to 2 years, and that there should be a maximum fine increase to $100,000 for party secretaries and financial agents.

In conclusion, I say that this bill will restore confidence in a fair and transparent electoral process in time for the next election.

JILL PETTIS (Labour) : I did not interrupt the member, but during her speech Nick Smith said on more than one occasion “You’re just a cheat.” I take exception and offence to that statement, and I request that the member be asked to withdraw and apologise.

GERRY BROWNLEE (National—Ilam) : I want to assure the member that my colleague the Hon Dr Nick Smith was not referring to her.

The ASSISTANT SPEAKER (H V Ross Robertson): No, no. This actually happened yesterday, and yesterday the word was ruled out of order. So I ask the member to stand and withdraw.

Hon Dr Nick Smith: I withdraw.

The ASSISTANT SPEAKER (H V Ross Robertson): Thank you.

Hon BILL ENGLISH (Deputy Leader—National) : Last week we heard the disturbing news that 40,000 New Zealanders had left permanently for Australia. This morning we found out that petrol prices are heading for record highs. In the next couple of months, thousands of New Zealand families will roll on to interest rates about 25 percent higher than those they are currently paying. There is controversy over whether serious, violent criminals are adequately treated by our bail laws. But what is the Labour Government doing? Nothing, about anything that matters! The Government is filling its pockets with public money for the next election campaign, passing law to make legal what was illegal in the last election, and clamping down on public opinion that might criticise it in election year. This bill tells us an awful lot about Labour, but not much about New Zealand democracy—and I will come back to that.

But let us look at some of the content of this bill. What a shambles! The Minister of Justice, who is supposed to know the law, apparently, maybe was not aware that the chief executive of the Electoral Commission was making public comment today. But I have raised the point and I am still waiting for an answer from the Minister. MPs are obliged to make a serious effort to comply with this law, because if we are found guilty of corrupt practice, we are liable for a $40,000 fine, or 2 years in jail.

Hon Tony Ryall: And we’re out.

Hon BILL ENGLISH: And we are out of Parliament. One of our colleagues is before the courts on corrupt practices charges, and we have seen what a dreadful process that is. If I want to know how to comply with the law, I suppose I go and ask the chief executive of the Electoral Commission. After all, she is the person who is quoted in the commentary on the bill as being the person who will decide on a case by case basis whether MPs are complying with the law.

Chris Auchinvole: What does she say?

Hon BILL ENGLISH: She says she does not know what the law means, so I asked the Minister of Justice to whom I should go to ensure I do not commit a corrupt act. She said to go to the chief executive of the Electoral Commission. I think the word for this is “Kafkaesque”, although I do not think the Minister for Justice could say that. The legislation is a shambles. The definitions are all being changed. There is no precedent. We have 6 weeks until it applies. This legislation guarantees litigation next year. Election 2008 will be as much about the rules for the election as about the future of the country. And whose fault is that? It is the fault of Helen Clark and the Labour Party. This bill tells us more about Helen Clark and the Labour Party than about electoral law in New Zealand. Political interference and the Civil Service, and this bill, are two sides of the same coin. That currency is Labour’s deep and paranoid sense of entitlement to power and public money—that is what it is. They are two sides of the same coin: its entitlement to taxpayers’ money, its entitlement to a pliant Public Service, and, worse, its entitlement to use the tools of the law to deal to its political opponents.

Mr Assistant Speaker, you know that the constitution of this country is informal. We do not have a written constitution. It depends on conventions, on understandings, and on an anchor of decency. There is no second Chamber to hold this bill up or to look at it when it passes. There is no court that can strike it down. It will be the law. The way we have dealt with that in the past has been to make sure the majority in the Parliament did not use their majority to skew the electoral system. We have a commission and a multiparty process around seats and around how those boundaries are set, because it is vital to the health of our democracy that it is fair. Up until this year, for decades and decades and decades, from the foundation of our democracy, this Parliament has had a multiparty process for setting the rules for our elections—up until this year.

Labour used to care about whether it was seen to abuse the power of the executive. The majority in Parliament can do anything in this country. It can write a law that says that only Labour candidates can stand for election. It can do that; it has probably thought of it. It can write a law about anything, but it is restraint that has kept our constitution together, and Labour has broken that constraint in a most fundamental way. It has set out to use its majority in Parliament to skew the electoral laws for partisan advantage, and it does not matter how many weasel words those members opposite use about the health of democracy and big money. The big money here is public money. The public money dwarfs private money. The politicians get $15 million and the interest groups get $120,000. Whose voice is going to be heard—the citizen’s or the politician’s? The one with $15 million is going to get heard ahead of the one with $120,000.

Labour has broken the self-balancing process. If the electoral law needed changes, there is a process of multiparty discussion by which those changes can be made and that preserve the decency on which our constitution is based, because it is not based on a written constitution. Labour does not care any more about whether it is seen to use the tools of law for partisan advantage. That is what it has done.

I might say to the Labour Party that if it abused its majority in Parliament to break the constitution for a great cause, then I might admire it. If it had done it to abolish poverty, to lift economic growth in New Zealand, or to bring about climate change policy that would save the planet, then, yes, I might put up with it. But for this—for this piffling, waffling, vague, partisan, disgraceful piece of legislation? Who is this about? Labour! This is not about New Zealand. This is not about the public good. This is not about Parliament, nor about constitutional propriety. This is about a grubby, paranoid Labour Party. Those members opposite think that everyone gets out of bed in the morning trying to beat them, so the law sets out: “Stop the Brethren”, “Stop the billboards”.

I raise a point of order, Mr Speaker. I have put up with 8 minutes of barracking, and I ask that in my last 2 minutes I be heard in silence.

The Labour Party has set out to stop the Brethren, to stop the billboards, to stop the cake stalls, to stop the interests groups, to stop the canvassing, and to stop the citizen with the loud hailer. This bill makes the citizen with the loud hailer subject to a statutory regime—to have an opinion in New Zealand. That is a partisan rort of the constitution, as well as the electoral law of New Zealand.

Hon Annette King: I raise a point of order, Mr Speaker. The member asked for the last 2 minutes of his speech to be heard in silence. He is being yelled at and barracked by his own members. Was his request meant just for this side of the House, or did he really want to be heard is silence?

The ASSISTANT SPEAKER (H V Ross Robertson): The Hon Bill English.

Hon BILL ENGLISH: Well, I think the Minister has shown why she is regarded as Labour’s top performer! We saw it earlier today. Ultimately, this bill is the responsibility of Helen Clark. She is paranoid. She does believe that the only way she can win the election next year is to make law that stops people criticising her. Labour members did not get the lesson of the last election, which was: “Be very, very careful about trying to control our lives further.” And because they did not get that message and nearly lost an election, New Zealanders will decide that the only way to teach them is to throw them out, despite the partisan advantages that they have constructed through this stupid piece of legislation. Even the person who is meant to enforce it says she does not know what it means. How ridiculous! What an abomination of Parliament and our constitutional processes!

LYNNE PILLAY (Labour—Waitakere) : I am very proud to stand in support of the Electoral Finance Bill. This Government knows that the public should have the highest confidence in the electoral system we have. The system must be transparent and fair and not open to the undue influence of wealthy interest groups. This bill is, in effect, free speech—it enhances free speech. It enhances the ability of New Zealanders to have their say in this country. We are disappointed by the National Party’s deliberate scaremongering on this bill. One would have to ask why. Why are they scaremongering so strongly? They are worried about the funding they had from the Exclusive Brethren at the last election, and about how much at risk that was.

This bill will not destroy free speech. It will not stop people from expressing their views or particularly from lobbying on issues. By amending the definition of “election advertising” we can ensure that people can lobby on issues unfettered, and we think that is really important. Why? Because people’s lobbying was what brought about great policies such as 4 weeks’ holiday, paid parental leave, early childhood education, interest-free loans for students, and policies on environmental issues. All of these happened because we have lobbying and advocacy within our country. That is something that the Labour Government is very proud of and something we celebrate. However, we do not celebrate wealth running the show, which is what happened in the last election. That is what the majority of submitters who supported the bill said they found the most repugnant when they came to speak to us at the select committee.

I want to thank the advisers and committee staff, who worked really hard and gave very constructive advice to the committee at all times. A total of 575 written submissions were received, and 101 submitters came to the committee and spoke. I thank our colleagues from New Zealand First, the Green Party, and from United Future who, like the Labour members, were committed to ensuring that our pride in our open and inclusive democracy is maintained, and that the rorts we saw at the last election, with the collaboration between the National Party and the Exclusive Brethren, which was a blot on our political landscape, will never be seen again.

I want to say that the games the National Party played in the committee really sunk to an all-time low. There were really silly, silly games, such as the times that they threatened to walk out and collapse the committee—and this comes from a party whose members say they want to work constructively and that all parties should be involved!

Hon Annette King: Rubbish!

LYNNE PILLAY: The Minister is right. National’s performance in that committee was rubbish, and their opposition to this bill is rubbish. All the submitters who came and supported the bill made very constructive suggestions, and we listened to their suggestions and made improvements. We have had positive responses since the report back. The Human Rights Commission strongly supported the changes. The Coalition for Open Government welcomed the changes, and was especially pleased that the issue of secret trusts and anonymous donations had been tackled. The New Zealand Amalgamated Engineering, Printing and Manufacturing Union said that the Electoral Finance Bill brings better democracy and ensures that the democratic process is open to all New Zealanders, not just the wealthy and the privileged in this country.

As I said before, narrowing the definition of “election advertising” by deleting clause 5(1)(a)(iii) of the original bill means that the advertising of issues will not be captured and that many lobby groups and advocacy groups can go about their business, which we admire and respect in our country. Only advertising that advocates for or against political parties or candidates will be captured by this bill. What is so offensive is that the Opposition is trying to make out that this is something new. Lobbying or supporting a party during the election time has always been supposed to be declared. It is rorts such as the Exclusive Brethren’s collaboration with the National Party that has meant we have had to take another look at the bill and work towards ensuring that those sorts of things, which are insults to our democracy in this country, do not happen again.

We listened at the select committee to many of the third parties who said they support the regulated period and support a clamp-down on trusts and anonymous donations. But they were concerned about the amount of $60,000. Many of them recommended a sum of around $100,000. We listened to those submissions and took them on board, and now we are happy to say that the spending cap for third parties is $120,000. This is for parties that are absolutely promoting a political party or advocating against another political party, thereby definitely electioneering. We have ensured a more realistic figure for that, and it is $120,000.

We have also ensured that New Zealand citizens, including young people under 18 years of age, are entitled to list as a third party. I want to speak a little more about the rules around anonymous donations and secret trusts. The Coalition for Open Government has agreed with us and said that reinstating the controls on secret financial contributions to parties via the anonymous donation and secret trust regime is one of the most effective parts of this bill. We ask the public to ask why it is that the National Party is so opposed, so vitriolic, and so utterly panicked about this. It means that there will be more fairness and we will not have the influence of wealth in our elections. It will ensure that everybody, no matter what his or her resources or means, is able to participate freely in elections.

Let us talk about the regulated period. We can look back at the way in which wealthy backers attempted to outspend their rivals by doing election-related spending before the current 3-month regulated election period. We saw that. Members will remember the billboards, the “Kiwi not iwi” slogan—it was so last election—where the National Party was intent on attacking race relations in this country. That problem will be fixed. In the minds of the public, elections start in election year. The regulated period is still a lesser period than that in the United Kingdom, where the period is a year retrospectively. We believe that we have ensured fairness, transparency, and accountability in our election laws, and that is what this bill is about. I am very happy to commend the bill to the House.

Hon TONY RYALL (National—Bay of Plenty) : The effectiveness of Lynne Pillay as chair of the Justice and Electoral Committee will be measured by the amount of amendments that will be tabled by the Government during the Committee stage of the Electoral Finance Bill. I can tell the House that, as we speak, the Government has the Ministry of Justice going through this bill with its closest advisers to find all the problems, loopholes, inconsistencies, irrelevancies, and mishaps that the member put into this bill as chair of the select committee. I think the House will be stunned at the amount of amendments this Government will be forced to bring to this bill.

I must say that the speech made by the Minister of Justice proved that this bill is drafted on a few empty slogans. It is all about the preservation of a Government that will do, say, and spend anything to preserve its own existence. This Government is cementing in the interests of big union money in the running of elections in this country. It is cementing in the interests of big union money, because all the exceptions in this law will allow unions to spend whatever they like during the election. We know that the Service Workers Union spent close to $300,000 at the last election. We know that because someone spilt the beans on Darien Fenton trying to do that for the Labour Party.

We know that the New Zealand Educational Institute came before the select committee—did they not Mr Finlayson—and admitted to spending $150,000 of its money in the run-up to the last election. We have written to all the unions in New Zealand asking them to tell us how much money they spent in the last election. None of them has replied with the numbers. We have written to all the big unions in New Zealand that have the money, asking them to confess how much they spent in the last election. Not one of them has told us how much it spent. This bill cements in the interests of big union money in the running of elections in favour of the Labour Party.

But here is the other big money that got cemented in. Lynne Pillay would not tell the House. The select committee and the Labour members spent hours and hours on the overseas donation prohibition, so that Owen Glenn can give them another half a million dollars for this election. It is the “Owen Glenn clause”. I sat on the Justice and Electoral Committee. The committee spent hours and hours getting the definition of a foreign donor right so that Owen Glenn could make another half-a-million-dollar donation.

The original definition stated that one could donate only if one was registered on the New Zealand electoral roll. Then there was a coffee break. Then committee members came back and said that we need to change that definition. Then we spent another couple of hours on the definition. Then there was a lunch break. When the committee members came back they said that we will have to make more changes to the definition of what an overseas person is. It was all about cementing Owen Glenn’s ability to give half a million dollars to the Labour Party for the coming general election.

That is what this bill is all about. It is about cementing the interests of big union money and about the ability of the Labour Party’s half-a-million-dollar overseas donor to contribute again. That is what this bill is all about. It is about tilting the playing field in favour of the Labour Party.

I was on the select committee during 1993 and 1994 when the MMP legislation was drafted and subsequently amended following the 1993 general election. I can tell the House that that committee worked in a multiparty way to ensure that the interests of New Zealanders were served and that the law would endure. We did that because we simply cannot have a voting system whereby the victor gets to change the rules every election to suit itself. Working against that system is what has preserved fair and democratic electoral law in New Zealand.

We have seen across the Tasman what Governments in Queensland have done to advantage themselves, election after election. Governments in Queensland used to give rural voters five times as many votes as urban voters. They had a majority in Parliament and were able to entrench themselves in power for 30 years, because they changed the rules to suit themselves every election. That is what is happening here. Labour is changing the rules to help itself. I think it will rue the day.

Labour Party front-benchers do not care that the rules will change next election. They are not worried about the 2011 election, because they will not be here. But the members on the backbenches who look to have some sort of career in Parliament have to ask themselves whether they are inviting the National Party to change the rules next election to suit the National Party. I think they are inviting the National Party to do that. Do they want National to do to Labour what Labour plans to do to the people of New Zealand with this bill? I think they are inviting that.

The National Party stands for a tradition of respect for our democratic values. This party believes in the democratic values that have underpinned this Parliament for well over 100 years. That is why our leader John Key has given a commitment to repeal this legislation. The easy option would have been to say that we will keep this bill but remove the Owen Glenn donation exemption and put in restrictions on unlimited big union money. We could do that, but we are not going to. John Key has made it clear that National wants to respect the democratic values and tradition of this country.

I have to agree with Bill English on this bill. What an incredible performance we saw in the Chamber today by the Minister of Justice during question time. In one answer she said that if people have questions about the bill then they should go to the Electoral Commission. Mr English told her that the Electoral Commission does not know what answers to give. And what did the Minister then reply? She said that people should go back to the Electoral Commission. That is what she said—that people should go back to the Electoral Commission.

It is quite clear that the Government has no idea of the problems that the Justice and Electoral Committee has given to this Parliament with this legislation. This bill is full of innumerable problems, inconsistencies, and difficulties that the law of common sense will not fix. The law of common sense—that new theme of jurisprudence of the last 48 hours—will not fix the issues that Helena Catt, the independent public servant in charge of the Electoral Commission, has highlighted in the last 24 hours. Helena Catt is the person who has made it quite clear that she has no idea what this clause about members of Parliament acting in their responsibility as members of Parliament means. The Minister of Justice came to the House and said that if she gives a speech in the House giving an indication then the judges will take notice of it. She said that if she gives a speech in the House then the judges will take notice of it, and that judges will take notice if there is a comment in the commentary of this bill. It is nonsense.

Hon Bill English: You’ll have to go to court to find out.

Hon TONY RYALL: We will have to go to court to find out. Honestly, if people thought the Florida election in 2000 was all about “hanging chads”, they will see that this bill will lead to endless litigation about the roles and responsibilities of members of Parliament. This bill will be a fiasco of the standard of the Florida recount in the 2000 US presidential election. It will be fought on minute details, political meanderings, and understandings of rules that have been drafted solely to cement Labour’s political advantage: complete, unrestricted, big union money being allowed to be spent in the next election; and a specific exemption so that a foreigner, Owen Glenn, can make another half-a-million-dollar donation to the Labour Party.

This bill will face pages and pages of amendments when it comes back to the House during the Committee of the whole House stage in 2 weeks’ time. It is simply appalling that members from Government parties who like to stand on their hind legs and lecture Parliament regularly about the rights and wrongs of constitutional process, as they sweep their cowlicks from side to side, are prepared to stand up and support this legislation, which is a complete contradiction to the democratic values of this country.

• Debate interrupted.