Hon ANNETTE KING (Minister of Justice) : I move, That the Electoral Finance Bill, the Broadcasting Amendment Bill (No 3), and the Electoral Amendment Bill be now read a third time. This legislation has been contentious, with its passage marked by acrimonious debate and a campaign of misinformation. A major newspaper the New Zealand Herald devoted almost a month to attacking the legislation and the Government, in a campaign the like of which has not been seen since a Labour Government legislated to stop tobacco advertising. One cannot help but wonder whether the motives for the current campaign are not very similar to the last one.

Much has been said and written about the legislation. A letter to the editor in yesterday’s Dominion Post summed it up for many people when it said: “Democracy’s not one dollar, one vote”. An article in last week’s Otago Daily Times also made some relevant points: “As much as we like to imagine that freedom of speech is an absolute, it isn’t. There are several laws that proscribe it.” The article went on to say that a leading opponent of the legislation believed that an ideal democracy would let money be free to talk whenever and however loud it likes. The article stated further that the truth was that this man has “bags of money and no hesitation in using any amount of it to try to influence the course of our future democracy.” Freedom of speech and the freedom to buy speech are not the same things.

This legislation demonstrates the Government’s commitment to democratic and transparent elections. The Justice and Electoral Committee, the Government, and the Parliament, during the Committee stage, listened to the concerns about the Electoral Finance Bill and made a number of changes that improve the legislation considerably. This legislation is about creating a fair, transparent electoral system that puts all parties on a level playing field, with clearly defined rules and safeguards to protect the electoral system from abuse. We do not want to see the Americanisation of our electoral system. This legislation does not restrict free speech; it simply restricts the right to purchase speech through advertising. This is being done to safeguard our democracy by keeping to a minimum the undue influence of money in politics. That is what a level playing field means, and the Government believes that most New Zealanders understand and support this principle. The legislation makes changes that will help to bring New Zealand in line with other comparable democracies, such as Canada and the United Kingdom. These reforms are important, and are fair and transparent for our elections, and that is fundamental to our democracy.

This legislation has been debated extensively. The public engaged with it through the select committee process, and the committee sent the summary of its recommendations to the submitters. That was a suggestion made by the Human Rights Commission about further public consultation. Members of this House have also made important contributions to the discussions. During the Committee of the whole House the Government made a number of clarifications and amendments to the legislation, both to improve its workability and in response to matters raised following the select committee report. We have worked with the Chief Electoral Office, the Electoral Commission, the Law Commission, and the Crown Law Office to make this legislation work. There has been favourable feedback from many submitters who had concerns with the bill as it was introduced.

In addition, the Government carefully considered the changes proposed by Mr Christopher Finlayson in his Supplementary Order Papers. I thank the member for his considered proposals for amendments—some of which have been incorporated into the legislation. The most significant clarifications and amendments proposed by the Government include narrowing the definition of “published”, amending the cut-off date for listing as a third party, ensuring full disclosure when donations are made by trusts, and creating a mechanism for indexing expenditure limits. I will talk more about these in a moment.

One area received attention during the final stages of this debate—that is, the meaning of the phrase about an MP acting “in his or her capacity as a member of Parliament”. I realise from the debate that the view I expressed in my second reading speech about the interpretation of that phrase was too narrow. Although acting in our capacity as an MP clearly includes participation in the business of the House and electorate and other representational duties, work in our capacity as members of the Executive, and other party spokespeople, it clearly also includes the provision of information and critical analysis to the electorate on issues, policy options, and services. This is clearly not a strict definition and that would be undesirable. However, the lack of a strict definition does not mean there is not other guidance. MPs’ behaviour is also governed by the Appropriation (2007/08 Estimates) Act 2007 and the Speaker’s directions and determinations.

Narrowing the definition of “publish”, particularly by removing the part of the definition that would have encompassed advertisements that were brought “to the notice of the public in any other manner”, has helped to remove many concerns. The amendment makes it clear that the definition captures only advertisements that are distributed to the general public, not door-knocking or speeches at public meetings and so on. In addition to these changes, the select committee ensured that the definition of an election advertisement does not affect the issues-based related advocacy that non-governmental organisations carry out. Alongside this amendment, a new and important change made during the debate has been a common-sense clarification that when a suspected offence is inconsequential, and there is no public interest in doing so, the Electoral Commission and the Chief Electoral Office have the discretion not to report the matter to the police.

A third substantive change to the legislation is the cut-off date by which a third party can list with the Electoral Commission. It will be a fixed date. Submitters, including the Human Rights Commission, were concerned that the period during which third parties were unable to list as a third party was too long and therefore created a restriction on the freedom of expression. The bill as introduced and reported back from the select committee had writ day as the day after which listing was prohibited—around 5 or 7 weeks before an election. This has been changed to 21 days before an election. The Human Rights Commission has said it is now largely happy with the legislation. The purpose of this change is to ensure that there is a balance between the date from which all participants in an election are known and the ability for people or groups to respond to issues that arise close to an election.

Another change to the legislation during the last stages is a new clause that will ensure that there is full disclosure when donations are received from secret trusts. The new clause ensures that a chain of trusts cannot be used to circumvent the legislation. If the recipient of the donation cannot identify the contributors of a trust donation, when the contribution is over $1,000, the whole donation will be sent back to the donors either for them to remove the contribution or to identify the contributors. Ultimately, greater transparency about the source of political funding will lead to increased public confidence in our democracy.

There are a number of other changes, including an indexation mechanism, whereby political party, candidate, or third-party expenditure limits will be increased by the rate of inflation. This will occur every 3 years by Order in Council and will come into force on 1 October in the year before a Parliament is due to expire. In the departmental report on the legislation, the Electoral Commission advised the Justice and Electoral Committee to adopt a proposal like this in relation to the election expenditure. The amendments I put forward did not index the donation thresholds in the legislation, but this was not something that the royal commission or the Electoral Commissioner recommended.

This legislation does not restrict free speech; it simply restricts the rights to purchase speech through advertising. This has been done to safeguard our democracy by keeping to a minimum the undue influence of money in politics. We want to protect the ability of all New Zealanders to participate in democracy. We must ensure that those with limited resources can realistically compete with those who have very deep pockets. I commend this legislation to the House.

JOHN KEY (Leader of the Opposition) : “If you’re in favour of free speech, then you’re in favour of freedom of speech precisely for the views you despise. Otherwise, you’re not in favour of free speech.” They are not the words of a random right-winger. They are not the words of a former treasurer of the ACT party. They are not the words of the media, for whom Helen Clark no longer has any respect because, according to her, they are too young to understand history. They are the words of Noam Chomsky, a man who is not from the left but from the far left. He is somebody with whom Helen Clark probably used to agree, before she totally lost all objectivity.

Today Helen Clark, against the wishes of the majority of New Zealanders, is passing legislation that threatens our democracy. Years and years of bipartisan support of electoral reform will be sacrificed for one reason and one reason alone: so that Helen Clark can try to cling on to power. I say her actions cannot go unrecorded. They threaten the rights of New Zealanders to participate in elections while, at exactly the same time, extending the rights of those in a political party. This law is not designed to strengthen our democracy. It is deliberately designed by Helen Clark to weaken our democracy.

In much of New Zealand’s history we have enjoyed a full democracy—a democracy that has seen universal suffrage, where free and fair elections are held, where there is a freedom of association, and where there is freedom of speech. One of the key planks of our democracy is the freedom to participate—to speak out when one is in agreement with the Government and to speak out with abhorrence to the Government, to speak out when one agrees with the Opposition and to speak out with abhorrence to the Opposition. It is the freedom to make one’s case on the strength of one’s argument and to let others judge it for what it is worth. Our democracy is not weaker because of the scrutiny; it is stronger because of its democracy.

Healthy democracy does not tolerate dissenting voices, it demands them, because when they are silenced, slowly but surely we are all silenced. Democracy is about participation for everyone, but it comes at a price. We have to be prepared to hear opinions that we do not like from people we cannot stand, on topics we might not want to debate. That is what participation in a democracy is all about.

This legislation today is designed for one reason alone, and that is to silence democracy, reduce participation, and put a legalised gagging order on the people that Helen Clark and her travellers do not like. There can be no other explanation for a law that will see New Zealanders spending one-third of their adult life subject to a law that is so bureaucratic, where the hoops are so bad, and that is so muddled that the Prime Minister has told people to consult a lawyer if they want to try to understand it. The Government cannot explain the legislation. What sort of democracy are we creating in this country when we are creating law so muddled that the Electoral Commission is confused by it, the Law Society is against it, former Prime Ministers have come out speaking against it, and the Minister has said the only hope for it is to apply common sense to law that has no fundamental common sense in itself?

Helen Clark does not care. She does not care for one reason: for blatant self-interest she will pass this law, because she thinks nobody will notice. According to Helen Clark, when issues get tough they are inside the beltway and nobody notices. Well, I have news for Helen Clark. Everybody has noticed, and the vast, overwhelming majority are opposed to this legislation. The only thing Helen Clark has been able to hide behind throughout this entire debate is some sinister kind of plot that is all about big money.

If there is big money involved in New Zealand politics, it is the big money of the Labour Party. These are the people who spent $50 million through Government agencies in a non - election year but nearly $70 million when an election was under control. That is the reason they no longer care about neutrality of the Public Service. You see, with Labour and an election the role of a communications manager is a political appointment. That is why Madeleine Setchell’s face did not fit. That is why Clare Curran’s face did fit. That is why Erin Leigh was defamed in this House by a Minister who used advice for which that ministry has apologised, and for which he will not. That is the reason why. And this—the audacity of this—from a party that got caught in the last election flogging $800,000! It has the audacity to lecture New Zealanders about big money. Labour did not break the law once—

Jill Pettis: Pay back the GST!

JOHN KEY: Actually, I say to Jill Pettis, Labour broke the law twice. It broke the electoral cap, as well. If anyone is involved in big money, it is the Labour Party.

So there can be only two explanations for this legislation, and they are quite simple. One is desperation and the other is breathtaking arrogance. One of them is a good reason to boot Labour out; with both of them combined it is a necessity.

Let me say this to the people of New Zealand who are engaged in this debate and who are interested: National will repeal this legislation. We will go back to basics. We will go back to the way it was. We will ask independent people to go out there and come up with electoral law. You see, electoral law is not owned by the Labour Party for the benefit of the Labour Party. Electoral law is owned by the people of New Zealand so that we can have a democracy.

This is a sad day for New Zealand. It is the day the Labour Party admitted publicly, and through legislation, that it cannot win unless it changes the law. That is what happened today. National will repeal the law. We will go back to a bipartisan basis where independent people will come up with some recommendations. I say this, and this alone: history will mark this day. This is the day when Helen Clark arrogantly inflicted anti-democratic legislation upon the people of New Zealand, and when the collective voters of New Zealand know once and for all that it is time for a change.

Hon JIM ANDERTON (Leader—Progressive) : My experience in politics is that leaders who need standing ovations—

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. This may well be the last sitting day for 2007, but no political party should be allowed to show the contempt for a parliamentary officer that the National Party members just did. You had asked them to come to order, and they decided to put on a stunt of clapping and applause. That is OK, but when you asked them to stop—[Interruption] There is Paula Bennett again, dressed up in her karate suit and shouting as though she is at a karate lesson.

Madam Speaker, my point is that when you asked those members to sit down, they paid no attention whatsoever; they just carried on. If we go into 2008 with that sort of behaviour, there will be problems in this House, because that is not a fair representation of the Standing Orders when it comes to members of Parliament.

The ASSISTANT SPEAKER (Ann Hartley): The member is quite right—that was excessive. Now, I am going to ask Paula Bennett to leave the Chamber. She has continually interrupted the member during his point of order, and she knows that that is out of order. Please leave.

• Paula Bennett withdrew from the Chamber.

Ron Mark: I raise a point of order, Madam Speaker. I think your ruling is perfectly appropriate, but there were about four other members who were talking at the same time. They know precisely who they are, and I suggest that if you ask them they will, no doubt, vacate as well.

The ASSISTANT SPEAKER (Ann Hartley): I have asked one member to leave, and I think that is sufficient at this time.

Gerry Brownlee: I raise a point of order, Madam Speaker. I wonder whether you might tell us what Mr Peters’ point of order was and where we can refer to the matter in the Standing Orders that he brought to your attention.

The ASSISTANT SPEAKER (Ann Hartley): The member quite correctly raised a point of order about the order of the House. It was my call, and my call to order. He was properly speaking to that. Members should always resume their seats when the Speaker stands.

Hon JIM ANDERTON: My experience in politics is that leaders who need standing ovations are usually in big trouble.

Gerry Brownlee: I raise a point of order, Madam Speaker. I would like to challenge the member speaking to provide the Hansard that shows any occasion during any of the five party leaderships he has had when he has had a standing ovation, because, clearly, he has got into a lot of trouble without that.

The ASSISTANT SPEAKER (Ann Hartley): As the member knows, that was not a point of order.

Hon JIM ANDERTON: I want to address this debate because I represent the only party in this House that did not breach the electoral expenditure rules and laws at the last election. It sticks in the throat a bit to hear so many people striking a high moral tone, when their own hands are not clean in this matter. National members cannot get up in this House and demurely claim they are interested only in democracy when they flouted the electoral laws at the last election. National cannot claim to be pure when it has a record showing it set aside the electoral laws that did not suit it.

Only one party did not flout the law, and I am leading it in this House. We did not use public money for our advertisements, we did not run a GST rort, and we did not try to use public money voted for one purpose to pay for our own purposes. Undoubtedly, the Progressives were disadvantaged when we opted to play within the rules. I have not come into this Chamber and trumpeted that we alone were obeying the laws, because we did only what was right. It sticks in the throat to hear the National Party pretending it cares about democracy, when its record is sleazy and opportunistic. I say to the National members that they should not get on their high horses about democracy until they have clean hands. This legislation makes a simple choice about our democracy. Who should own our democracy: big money or the people of New Zealand? We cannot have it both ways. Where the anonymous big money goes, the interests of the people come second.

I want to ask everyone who is opposed to this bill a question: why should anyone be allowed to do what the Exclusive Brethren did in my electorate in the last election? They came into my electorate on the Friday before the election, the day before that Saturday, and they bought a full page ad in the local newspaper. The ad told complete lies about my record in the electorate and my political position on policy matters. They distributed that false advertisement on that Friday night to every household in the electorate. The address given in the ad was fake and the people behind it tried to remain anonymous, but we found out that they were church people. That ad was published the day before the election when it was far too late to respond and reply. It was an attempt to buy an election with money instead of with truth and ideas. I want to know how fair that is. How is that democratic? How is it fair and democratic that people who do not identify themselves can spend as much as they like to sway the result of an election?

I support the Electoral Finance Bill because elections should not be decided by the largest wallet. I support the Electoral Finance Bill because it is about ensuring that no one can buy an election result. I support the Electoral Finance Bill because the best ideas should win, not the best-funded ones. I want to remind this House of what happened when money had its way in New Zealand in the 1980s and 1990s. We saw a fire sale of our assets. Was it just a coincidence that the people who were buying those assets at knock-down, fire-sale prices were the same people who handed out tens of thousands and even hundreds of thousands of dollars to the political parties doing the selling? We saw the interests of New Zealand put in second place, and we are still paying the price for it.

Some of us sat in this Chamber right through that period. John Key might have been offered overseas cocktails parties with the donors he now wants to let buy as many votes as they can afford; some of us were not. We have not forgotten what was done to New Zealand and the enormous cost of it. What an amazing coincidence that the same people who bought the assets were the people who paid enormous sums of money to the political parties of the day. What a coincidence that whatever those donors wanted, they got. The interests of New Zealanders were relegated behind the interests of the companies of the rich buyers of our assets.

Even if one does not believe that the policy was bought, look at the perceptions that policy followed money. Look at the damage those perceptions did to the fabric of our democracy and to the respect for the political process. That sort of politics has no place in New Zealand. This legislation helps to erect a wall against the anti-democratic sale and purchase of electoral influence. The bill says that parties that take huge secret donations must tell us to whom they are in hock, whom they owe favours to, and what they are going to do in order to get the money.

When Deep Throat exposed Richard Nixon and Watergate, he told the reporters at the Washington Post to follow the money. This principle is as old as wisdom. We used to say: “He who pays the piper calls the tune.” We want to know who is paying so that we might better understand what the electoral tune is. If Watergate had happened here, the New Zealand Herald would have praised the money that paid for the conspiracy. Instead of Woodward and Bernstein, we would have had editorials praising the President for protecting the rights of anyone to buy political favours. Instead of sending reporters out to expose the scandal, the New Zealand Herald’s editor would have sent out a sales team to ask for a cut.

I wish we could rely on an independent news media to expose the influence of big money in this country, but the record shows that we cannot. The record shows that newspapers take the money in advertising and then shut up about it. Look at the New Zealand Herald letting its greed get in the way of its objectivity. The New Zealand Herald campaigns to let anyone buy elections. The New Zealand Herald campaigns because it knows what side its bread is buttered on. It knows that it does not raise concerns when its pages are being used to buy votes. It does not object when its own pages are used unfairly. It takes 30 pieces of silver and sits compromised to the core of its soul. If members look at the editorials of the New Zealand Herald over 100 years, they will find exactly the same kind of stand as now. Members will find that the New Zealand Herald was wrong when it did it then and it is wrong when it does it now.

If newspapers will not do the job of making elections fair, someone else has to. We need to limit the role of big money, to protect our democracy. This bill puts a cap on the amount of money anyone can spend to lobby for their point of view. So it poses a question to opponents of this bill: how much money is too much to spend influencing an election? Is it $1 million? Is it $5 million? Is it $10 million? Is it $20 million? If there is no cap on the amount that should be spent, then we are saying our democracy should be for sale. If there is no cap, then we do not have a democracy; we have an auction. If there is no cap on election spending, then we might as well turn Parliament over to TradeMe. If we accept that there should be some limit on the amount people are spending, then we are merely debating the quantum.

Members cannot tell me that fundamental issues of democracy are not at stake here. If I say the limit should be $1 and those members say it should be $2, what is fundamental about that? No; the fundamental issue is whether there should be any cap, at all. I want National members to state plainly during this debate that they believe there should be no limit on anonymous donations—that there should be no limit to what can be bought with those sacks full of cash.

I wonder what the National members have in mind. It is no coincidence that National has only announced one policy for next year’s election—selling assets. Here we go again—unlimited money in our politics and an unlimited fire sale of the public’s family silver. The pigs are trying to get into the trough again. They cannot wait to get their noses into it. The National Party has already sold its policy. When National members say they will repeal this legislation, what do they mean? Do they mean that National will not have any electoral finance laws, at all? Do they mean that people will be able to spend as much as they like? Do they mean that anyone will be able to give any amount of cash to the National Party without declaring it? I wonder what the National Party wants. If National members are saying that there should not be some limit on the ability of anonymous people to buy elections, then—

Hon Maurice Williamson: Tell us about Mike Moore’s view.

Hon JIM ANDERTON: Yeah—think about it. Yes, I have heard Mike Moore. I was in this House when Mike Moore was here. I know about Mike Moore.

If National members are saying that people should be able to spend what they like in an election, then they are saying that people who spend more money should have more say. That is not democracy; that is a disgrace against the most fundamental ideas of civilised organisation. This bill should be supported by all members of this House.

Hon BILL ENGLISH (Deputy Leader—National) : Where is the leadership of the Labour Government, when it is under more pressure than it has been for 8 years? Where is Helen Clark, who should be backing the legislation that her Cabinet signed off? Where is the brave rising star, Phil Goff? Where is the ever-angry and principled Dr Cullen? It is typical of Helen Clark that the organ grinder has sent the monkey today to articulate the visceral disgust that Labour has of anyone who criticises it. I have never heard such vitriol about the media in this House—even from the former member for Tauranga. This vitriol came from a member whose party has accepted anonymous donations and who was president of the Labour Party that funded its 1987 campaign through all of the people he condemns today.

I advise the member Jim Anderton of one inconvenient fact. Today he talked about the fact that the Electoral Finance Bill stops anonymous donors buying elections. He sat in a Cabinet that approved the original draft of the bill that had no restrictions in it on anonymous donations—despite the fact that the National Party had said publicly for months that it supported restrictions on anonymous donations. That is a measure of how insincere Labour’s arguments are. It presented legislation with no restrictions on anonymous donations, and now it is using the restrictions forced on it by the Greens as being the sole reason for the legislation. That is why the Labour leadership will not front up to defend this legislation.

The member also talked about big money and buying votes. Well, who would be experts on that but Labour? He said $1 million was big money. Today the Government gave us a Budget update. It has $3.5 billion that it will use to buy the next election. So it does not matter which way we look at it: this legislation is all about entrenching the right of Government and the political establishment to use big public money to buy elections, and no one will be able to stop it. The Government can give hundreds of millions of dollars in tertiary funding, and it can use Government political advertising to promote this—as the Government will do next year. An MP has a big public budget and can say that he or she has the hundreds of millions of dollars for polytechs and universities. But if one wants to oppose it—

Shane Ardern: You can’t!

Hon BILL ENGLISH: Well, one can, but if one spends more than $12,000, one has to register as a third party and appoint a financial agent. One has to present returns of donations and returns of expenses, and one can be personally subject to a search warrant. If someone is suspected of spending more than $12,000—when the Government is spending $1 billion—the police can search that person’s house under this legislation. If someone broke the law, that person could be fined $100,000 or be locked up for 2 years.

So what will happen is that people who want to oppose this Government will ask their lawyers, and their lawyers will explain just the process I have explained. Well-meaning, well-intentioned people—like the people of my home province of Southland—will be worried. In this small democracy, this great democracy, the good citizens of Southland will be worried about whether they can legally hold a political opinion in an election year without facing the threat of imprisonment. The former member for Tauranga—the great radical, anti-establishment figure—is all in favour of that.

The other ridiculous thing about this legislation is that if I stand up in Southland, or if my colleague Eric Roy stands up, and we say “Vote Labour out. They are trying to shut down the Southern Institute of Technology.”, that will be legal. If Tim Shadbolt gets up and says it, it could be illegal and he could be arrested. That is how ridiculous this legislation is. It says that a private citizen or a community organisation faces tight rules and less money, but a politician or a Government has no rules and a lot more money. That is the ultimate arrogance.

You see, this is not about big money from the citizenship or from the community; this is about entrenching and defending the right of politicians to spend someone else’s money on influencing elections. If we listened to Jim Anderton, we would think that it had never occurred to a politician to use public money to influence an election, that politicians are purely motivated by the good of the country, and that everyone else is a rip-off merchant trying to do something secretly to influence people in corrupt ways. That is what New Zealand First and Labour believe. They believe that the people running the campaign from Southland about the Southern Institute of Technology are venal, self-interested, and probably trying to corrupt the system. They believe that the Minister who is flying up and down spending millions of dollars of public money is purely motivated, and that he or she should have more say. For every election that I have stood in, and the dozens that went before it, MPs and people—normal public people—were subject to the same law. For 3 months before the election it was one law for the politicians and the same law for everyone else, but Labour has decided to exempt MPs.

What a mess Annette King has made of this legislation. The public have trampled all over the Electoral Finance Bill, but the Electoral Finance Bill has trampled all over her reputation. To show the paranoia of the Labour Government, Annette King tried to define the use of public money in a way that would prevent the Opposition from telling the public what it would do after the election. And these are the people who say we have no policy! Labour was going to make having a policy almost illegal.

Here is another little pearler. [Interruption] The member who is yelling down the back there, Jill Pettis, got $9,500 of anonymous donations in the last election. This legislation tells us much more about the character of the Labour Government than it does about anything else. It shows that it cannot take criticism. It shows that it wants to extend its culture of bullying and manipulation in the civil service to the rest of the public. But it tells us something else that is very important. The Labour Party and Helen Clark cannot conceive of a public good that is separate from the good of the Labour Party. They cannot conceive of it. Their belief is that people who criticise them are against the Labour Government, and that is why they criticise them.

I want to tell Labour, from my experience in politics, that often one’s critics are right. Often they are advocating a public good that one cannot see oneself. I am sure that right now Labour members are saying that the people who run the Southern Institute of Technology spend all their time planning to get Labour. Well, actually they do not. It has a community interest in what happens to its own institutions, as communities right through the country do. That is the ultimate arrogance. Labour cannot see a public good that is separate from what is good for Labour. Well, this legislation is bad for Labour—that is obvious—but it is terrible for New Zealand. It is an anti-democratic drift-net. It will not do what Labour says it will do. We will repeal the legislation because it is a case of the Government using its constitutional majority for partisan advantage, and it has to go.

• Debate interrupted.