Action Point 5: Tighten restrictions on political donations
Tightened restrictions on political donations will limit the undue influence exerted by wealthy individuals and organisations, creating a fairer political landscape in New Zealand.
Decisions made by our leaders should reflect the public interest, not private wealth.
But New Zealand’s current political donation system allows large contributions from individuals and organisations, creating opportunities for wealthy individuals or organisations to gain privileged access to policymakers and potentially shape decision-making. This system fuels concerns that policy decisions might prioritise the interests of donors over the public good.
By capping the size of individual contributions, political campaigns would rely more on a broader base of smaller donations, reducing the disproportionate influence of large donors. This could create a more level playing field where success depends less on financial power and more on widespread public support. Additional measures such as requiring the identity of anyone donating over $1,500 to be publicly disclosed and limiting donor eligibility to registered voters would enhance the transparency of political funding.
What we are asking for
- Set a Cap on individual donations and loans: Limit donations and loans from any single individual to a maximum of $30,000 per electoral cycle or $10,000 per year, in line with widely supported recommendations to curb excessive influence by wealthy donors
- Lower the public disclosure threshold for donations: Reduce the threshold for publicly disclosing a donor's identity from $5,000 to $1,500 per year.
- Restrict donor eligibility to registered voters: Permit only New Zealand citizens or permanent residents registered to vote to make political donations.
What these measures will achieve
A cap on individual donations will reduce the risk of large donors exerting disproportionate influence over political parties or candidates. A $30,000 donation limit is supported by recent research and public opinion.
A cap on individual donations would promote a fairer political process by reducing reliance on wealthy donors and encouraging a broader base of smaller donations. However, state funding would be needed to offset the loss of revenue to ensure all parties have the resources they need to operate effectively and engage with voters, which would require careful public consultation and testing to ensure effectiveness and public support. Options for state funding mechanisms are outlined in the The Independent Electoral Review (2023) and in Money for Something (2022).
Lowering public disclosure thresholds for donations from $5,000 to $1,500 would enhance transparency, helping to clearly identify sources of political funding earlier and reducing the risk of hidden influence from large donors.
Restricting donations to eligible voters
The Independent Electoral Review (2023) proposes that limiting eligibility to individuals enrolled to vote would increase public trust in political funding by reducing the perception of undue influence by organisations, businesses or foreign entities. It also enhances transparency because tying donations to identifiable individuals makes it easier to track the sources of political funding. Survey data from the 2023 New Zealand Election Study indicates public support for this recommendation, which is also endorsed by the Shining a Light and Money for Something reports.
These reforms will align New Zealand’s political funding with global standards and reduce the risk of corruption. To ensure these changes reflect the values of all New Zealanders, we need an open conversation about political funding and how we can support a fairer democracy.
Why action is needed
Public trust in the political system is declining
Public confidence in political fairness is eroding, and unrestricted donations contribute to this perception.
A 2024 Ipsos survey found that 65% of New Zealanders believe the economy is rigged to advantage the wealthy and powerful. Other recent public surveys have indicated widespread concern over the undue influence of big donors on political decisions and suggest strong public support for capping donations and increasing transparency (Chapple et al., 2021, Rashbrooke and Marriott, 2022, Vowles & Krewel, 2024).
Limiting and bringing transparency to political donations will reduce the risk of undue influence and enhance public trust in the political system. Large donations can shape policy decisions in ways that may not align with the public interest, leading to public distrust.
Aligning with International best practices
Of the 38 OECD countries, 20 have established limits on political donations, and many prohibit foreign, corporate, and anonymous donations.
- Canada limits individual donations to approximately NZ$2,000 per year.
- Ireland caps individual donations at around NZ$4,500 per year.
- Australia has strict disclosure requirements and bans foreign donations.
In contrast, New Zealand currently has no cap on the amount that an individual may donate or loan to a party or candidate. A cap of $30,000 per electoral cycle or $10,000 per year would still be significantly higher than individual donation limits in similar countries.
Reducing the influence of wealthy donors
Aligning New Zealand’s practices with international standards on political donations will ensure a fairer and more democratic electoral process. Currently some political parties receive substantial donations from wealthy donors, which gives a small number of powerful donors opportunities for unfair influence.
- Money for Something, a report on political party funding in Aotearoa found that some donors expected influence in return for donations. The report cites a former party president who says,
“Some donors had a clear expectation of influence. They were a small group, but they were there. People who gave money because they wanted a particular piece of legislation or a particular permission to emerge somewhere – either at the local or national level” (p. 46).
- This Newsroom article by Laura Walters uses political donation disclosures from the 2023 election to show how large donations from wealthy individuals and businesses dominate New Zealand’s political funding.
Capping donations, tightening disclosure requirements and anonymous donation limits, and restricting donor eligibility would limit the outsized influence of wealthy individuals and businesses in the political process and increase transparency.
