VZCZCXRO8182
RR RUEHNZ
DE RUEHWL #0832/01 3321907
ZNR UUUUU ZZH
R 281907Z NOV 07
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 4914
INFO RUEHNZ/AMCONSUL AUCKLAND 1556
RUEHBY/AMEMBASSY CANBERRA 5039
RUEHDN/AMCONSUL SYDNEY 0609
RHHMUNA/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 WELLINGTON 000832 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR STATE FOR EAP/ANP 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KDEM NZ
SUBJECT:  NEW ZEALAND'S CONTROVERSIAL CAMPAIGN FINANCE BILL 
 
 
¶1. (SBU)  Summary.  The Electoral Finance Bill, a 
highly-controversial Government bill to reform New Zealand's 
campaign finance rules, aims to place restrictions and spending 
limits on non-party political advertising.  The legislation has 
survived two readings and is likely to pass before the parliamentary 
recess in December.  Despite some modifications, a broad spectrum of 
opponents in and outside government still claim that it is affront 
to New Zealand's democratic principles and will limit free speech 
and participation.  Despite the strong criticism, Labour remains 
defiant and argues that the legislation is needed to prevent wealthy 
special interests (i.e., potential National Party supporters) from 
buying elections.  End Summary. 
 
Campaign Finance Bill Continues Towards Passage 
--------------------------------------------- -- 
 
¶2. (SBU)  On July 23, a highly contentious Government-backed bill 
that seeks to enforce restrictions and spending limits on non-party 
political advertising was introduced to Parliament.  Despite its 
controversy, the Electoral Finance Bill received enough support from 
the minor parties to ensure its passage to the Electoral Select 
Committee on July 26 where its members - a mix of Government and 
opposition MPs - scrutinized the bill and made some changes.  (Note: 
 A bill becomes law after its third reading in Parliament, when it 
receives its Royal Ascent from the Governor-General, the 
representative of Queen Elizabeth II, New Zealand's official Head of 
State. In between readings, the bill is sent to Select Committee for 
further scrutinizing and recommended changes, if any.  End Note). 
¶3. (SBU)  On November 19, the Justice and Electoral Select Committee 
reported back on the Electoral Finance bill. Cognizant of the weight 
of popular opposition to the bill that has been building since its 
introduction, the Committee recommended several changes to its 
original draft.  The Committee increased the limit on how much lobby 
groups can spend (NZD 120,000 or USD 91,000); relaxed the definition 
of election advertising; limited anonymous donations to NZD 240,000 
(USD 182,000), and limited the amount that can be given anonymously 
by an individual to NZD 10,000 (USD 7,600).  Additionally, the 
Committee expanded the bill's restriction on political advertising 
to cover government departments, initially exempt from the scope of 
the bill.  Labour has been criticized for using government-funded 
public awareness campaigns as thinly veiled election advertisements 
for Labour Ministers. 
¶4.  (SBU)  The Committee, however, upheld one of the bill's most 
controversial provisions:  the expansion of the official election 
period from three months before voting day to January 1 of an 
election year.  This expansion of the regulated election period 
places limits on spending by political parties and advocacy groups 
for up to 11 months rather than the current three months. 
Bill Draws Strong Criticism 
--------------------------- 
¶5. (SBU)  On introduction, the bill drew intense and broad 
opposition throughout New Zealand society, which has continued to 
build.  Political opposition to the bill is being led by the 
National Party who, if it becomes the next government, pledges to 
repeal it if the draft legislation becomes law.  The influential 
Human Rights Commission, a statutory body that monitors and promotes 
human rights in New Zealand, believes the bill will suppress free 
speech and grassroots political participation. 
¶6. (SBU)  The New Zealand Law Society (akin to the American Bar 
Association) wants the bill to be discarded entirely rather than 
amended, despite some relaxing of its more restrictive measures. 
The daily New Zealand Herald newspaper launched a campaign to 
persuade the Government to shelve the bill.  The paper has written 
scathing editorials slamming the legislation as transparently 
partisan and anti-democratic, with several op-eds and articles 
supporting the paper's position.  Following a large street protest 
against the bill in Auckland, similar protests were held in New 
Zealand's other major city centers, Wellington and Christchurch. 
¶7. (SBU)  Opponents of the bill uniformly claim that because New 
Zealand lacks a written constitution, any legislation that affects 
the country's democratic system of government has, in the past, 
received bipartisan support and broad civil society support.  The 
Election Finance Bill, if passed, would break with that tradition. 
 
Government Defends Finance Bill 
------------------------------- 
¶8. (SBU)  Prime Minister Helen Clark has flatly rejected calls for 
the Government to abandon the bill.  Despite acknowledging that the 
bill was imperfect on introduction, Clark believes that the 
necessary amendments to the bill worked out in the Justice and 
Electoral Select Committee will satisfy critics.  She noted that New 
Zealand has looser electoral laws and asserted that the bill is an 
attempt to provide greater clarity around private funding for 
elections. 
¶9. (SBU)  Justice Minister Annette King, who is charged with 
shepherding the bill through Parliament, says the latest draft 
 
WELLINGTON 00000832  002 OF 002 
 
 
addresses key concerns and will be effective in stopping 
well-financed special interests from being able to buy votes for 
their party through advertising.  Fending off criticisms from 
National's deputy leader, Bill English, that the amended bill 
remains legally vague and will dampen needed democratic debate, King 
noted that where there is uncertainty the "law of common sense" will 
prevail. 
Labour Wants to Pass Bill Before December Recess 
--------------------------------------------- --- 
¶10. (SBU)  The bill's changes are supported by Labour and its 
support parties, the Progressives, the Greens, NZ First and United 
Future.  The Green Party said the NZD 120,000 restriction on 
third-party spending would prevent those with deep wallets "drowning 
out Kiwi groups and people with legitimate election issues."  United 
Future leader Peter Dunne said his main concerns - relating to 
third-party activities and the definition of election advertising - 
had been addressed.  But he said he would not support any moves to 
rush the bills into law before Parliament rises for the summer 
break.  The Government hopes that the bill will become law before 
the end of the year.  If the legislation passes before the 
Parliament recesses, it will be applied almost immediately to the 
upcoming 2008 election. 
 
Another Campaign Bill 
--------------------- 
 
¶11. (SBU) At the same time Parliament considers the Electoral 
Finance Bill, another bill aimed at regulating campaigning funding 
is also before Parliament.  The Appropriation (Continuation of 
Interim Meaning of Funding for Parliamentary Purposes) Bill allows 
MPs to use public funds to publish anything that does not explicitly 
solicit votes or money.  Under the bill, sitting MPs will have the 
potential to access more funds than those challenging their 
Parliamentary seat.  National claims that this bill coupled with the 
Electoral Finance Bill, results in an "anti-democratic double 
whammy" from Labour.  National opposes the bill, but the Government 
is confident that it has enough support from the minor parties to 
ensure passage. 
 
Labour Worries of 2005 Election Repeat 
-------------------------------------- 
 
¶12. (SBU)  Labour's resolve to pass the Electoral Finance Bill 
originates from concerns surrounding the entry into the 2005 
election of the Exclusive Brethren Church (EBC).  The Brethren 
informed election officials that they intended to spend NZD 1.2 
million (USD 910,000) to campaign against the Labour government but 
without giving the money to the National Party.  The election 
finance law at the time allowed for such activity but the group had 
to be careful to avoid public affiliation with the National Party. 
Labour characterized the EBC negative campaign attacks as an attempt 
to buy the election.  Labour's accusation that National was secretly 
working in collusion with the Exclusive Brethren hurt National's 
credibility during the election, which it subsequently lost.  Given 
that National Party supporters tend to come from the business 
community and have deeper pockets to support candidates than do NGOs 
and unions, Labour worries that money could play a deciding factor 
in New Zealand elections - particularly a close election in 2008, 
and Labour cannot compete with National in that regard. 
¶13. (SBU)  Comment:  The Labour Party has yet to fully recover from 
having to reimburse parliamentary funds for unlawful election 
advertising in 2005.  National also faced a financial penalty from 
2005 but for a considerably smaller amount than Labour. 
Consequently, Labour faces the next election campaign with a 
financial shortfall and needs this bill to level the campaign 
funding playing field.  By standing defiantly behind a bill that has 
seen unflagging popular criticism, Labour appears to be ready to 
weather any political fallout from its passage in the hopes of 
keeping National from taking the money and winning in 2008. 
McCormick