Cabinet to consider closing political donation loophole

1 August, 2022

National Party Leader Chris Luxon argues that the current thresholds for poltical donations are "appropriate" and there are good reasons people don't always want donations to be made public. Photo: Wikimedia Commons.

By Trishil Dahya

Prime Minister Jacinda Ardern has announced the government will consider an urgent law change to close a legal loophole allowing political parties to accept large donations without the public knowing. 

The legal loophole was exposed this week in a recent high court decision on the New Zealand First Foundation case. 

The two men accused by the Serious Fraud Office of obtaining nearly $750,000 by deception between 2015 and 2020 were acquitted, but the judge highlighted a legal technicality allowing shadow entities to be established, and for donations then to be funnelled through to political parties with no need for public disclosure.

Justice Minister Kiri Allan is now expediting official advice on the electoral law, to see if the loopholen can be tightened up in time for Election 2023.

The most likely option will be to include it in legislation already before Parliament in its early stages, the Electoral Amendment Bill.

The bill proposes that the public disclosure threshold for donations should be lowered from $15,000 to $5,000. 

While the proposed closing of the New Zealand First Foundation loophole has bipartisan support in Parliament, the lowering the threshold of donation disclosure is opposed by the National and ACT parrties.

National Party Leader Chris Luxon told 95bFM's The Wire that the current thresholds are "appropriate" and there are good reasons people don't always want donations to be made public.

The government does not need National and ACT to pass any of these changes. However, Ardern has said that ideally, the electoral law changes would be passed with as much bipartisan support as possible.

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