Auditor's report and our constitutional democracy

This matter of taxpayer-funded Parliamentary leaders' budgets has got a lot of media coverage and I'm finding it hard to comment on a draft report by the Auditor-General that nobody except a select few seem to have actually seen. What should progressive-minded people make of it all?

How much money?

It is important to remember that the media are not talking about the amount of money that is allocated to parties to produce their TV and radio advertisements ahead of elections, but a quite separate pot of taxpayers' money which is administered by Parliamentary Service and provided to Parliamentary parties for the purpose of running their leaders' offices, their research and their Caucus members' parliamentary operations.

In the 2005-2006 financial year, that is the 12-month period in which last September's general election took place, the Parliamentary leaders' budgets were $5,450,000 for National and $5,107,000 for Labour; NZ First, $1,031,000; the Greens, $845,000; ACT, $539,000; United Future, $551,000; the Maori Party, $474,000; and Progressive, $165,000.

www.treasury.govt.nz/budget2006/estimates/pdfs/est06parser.pdf

Who is the auditor-general?

The way the system works in our constitutional, representative democracy, is that Parliament sets the laws, rules and regulations and the Office of the Controller & Auditor-General, which is an independent agency that reports to Parliament, checks to see that politicians, departments, agencies and Crown-owned entities are sticking to the rules, particularly in relation to spending public money that the Parliament itself has authorized to be spent on specific programmes or services. Three months before the 2005 election, the auditor-general drew Parliament's attention to the need to be careful to stick within the rules governing leaders' budgets and, according to the media, the auditor-general recently completed a draft report and will soon provide a final report card to Parliament.

Why does it matter?

The reason the Auditor-General does this, of course, is that it would be very unfair if some parties were sticking to the rules, while others were breaking the rules in a way which might electorally benefit themselves in the competitive business of getting their messages out to the public.

What are the rules?

Basically, you can use the leaders' budget to inform the public of what MPs are doing or outline services or places where members of the public can get information or help and you can fund research or staff to assist the better functioning of your party caucus' Parliamentary work. What you can't do it use the leaders' budget to canvass for votes for your party or candidates.

And who is the Solicitor-General?

According to media reports, the Auditor-General discussed this matter with the Solicitor-General, the boss of the Crown Law Office, and both held consistent views on interpreting the rules governing the use of Parliamentary leaders' budgets. That is significant because you often hear politicians quoting the rulings of the Solicitor-General as the final word on what is legally right and what is legally wrong.

What is the media saying?

Some media have said the draft report finds that "all parties broke Parliament's own spending rules," but that can't be true because if it was true then Parliamentary Service would have told the Progressive Party, for example, and provided Progressive with an opportunity to respond. Progressive has never heard from anyone about any of the matters that are in the media.

www.progressive.org.nz/modules.php?name=News&file=article&sid=2389

Media have also reported that National and the Maori Party had been contacted and have agreed to pay back money to Parliamentary Service for spending that the draft report apparently deemed invalid or unappropriated spending.

Other parties, including the right-wing parties of ACT, NZ First and United Future, who often feign philosophic and principled opposition to any inappropriate use of taxpayers' money and claim they endorse "law & order," have, according to some media reports, been told by Parliamentary Service of concerns held by the auditor-general but it isn't known if they have paid back any money at this stage.

The public will get to see the auditor-general's final report when it is tabled in Parliament, hopefully sooner than later.

Until that time, there is just no way of knowing if the reports on any particular party are true - or just rumours, perhaps generated by another party with an axe to grind.

This is important

This is important stuff. It is important that rules that are agreed between parties are kept otherwise parties that stick strictly to the rules end up being effectively penalized versus those that don't bother sticking within the rules.

Some of the bigger parties might prefer to have "bulk funding" whereby Parliamentary party leaders are given the greenlight to do whatever they judge fit with the allocation they are given.

There may be some validity in that line of argument, but if adopted it has to be considered within the broader context of other rules in our democracy which cap the amount of money that parties and electorate candidates can raise and spend on campaigning for votes and in the context also of the taxpayer-funded broadcasting allocations.

Whatever happens, it is best that rules are made more transparent and less arbitrary, and that they are better adhered to going forward. If mistakes were made in 2005, parties must commit to not repeating the mistakes again. Perhaps there needs to be a process whereby all proposed spending is first vetted by the Auditor-General's office.

National has about zero credibility on all of this

National's leader has been making extraordinary allegations on an almost daily basis around this issue, thereby making an absolute fool of himself and his party on at least two counts.

First, National has zero credibility on these matters and by whining and moralising so loudly all National has done is remind everyone of its own breaches of the rules. National, need I remind you, was entitled to spend $900,000 on broadcast advertising during the election campaign but its ad agency spent it all without adding the 12.5% GST and National, when questioned , flippantly put this down to "a misunderstanding".

Everytime National M.P.s now get up and yell about other parties' leaders' budget spending, they merely remind everyone how National treated so cavalierly an extraordinarily important matter - the amount spent on the most important medium of all, broadcasting - arguably much more important to determining election results than the leaflets or letters that might have been funded by other parties' leaders' budgets.

If National had any sense of strategy at all they would at least have pretended to be solemn and serious about the leaders' budget issue, but all their shouting and screaming has now made it impossible to dig themselves out of the hole that they have dug for themselves. And in so doing they have yet again managed to put themselves off-side with the very parties that they will always need if they ever hope to form a government - United Future and NZ First - just as their anti-Maori scaremongering eventually turned the tide within the Maori Party against Wayne Mapp's 90-day probation Bill despite the fact that many within the Maori Party were initially interested in supporting that Bill.

National's sorry behaviour, its remarkable ability to upset its only potential coalition partners, augurs very, very well for an historic fourth consecutive victory for the centre-left in 2008.

In New Zealand these days, the Right is divided against itself, has no strategy and not a hint of any serious hunger for power. The challenge for progressives is to ensure the centre-left regains the majority it enjoyed in Parliament between 1999 and 2005 in the election that is due in a little over two years' time.

What on earth is wrong in the Kiwi corporate board room?

The most alarming pieces I read this week were the findings of the Clever Companies Survey: It found that 73% of companies surveyed said they have no plans to achieve growth through exporting.

This is alarming.

For two decades, our corporate tax rate has been below the average of the O.E.C.D. group of rich nations. For the whole of the 1990s, our 33% corporate tax rate was significantly below the O.E.C.D. average. After 15 years of very deep structural reform which according to international studies show New Zealand is one of the very easiest, cheapest, least bureacratic space on Earth to set-up a business.

For seven years we have had a progressive coalition government that has invested heavily in skills training in an effort to reduce the acute shortage of the skilled staff that modern companies need; for seven years, we have had a government that has significantly increased the national investment in R&D, has significantly invested to establish, then expand, the NZ Trade & Enterprise overseas network of marketing offices and in industry-wide and region-wide co-operation on strategies to build on our competitive advantage and make the connections to the world via the overseas NZTE network.

The government is working hard to get New Zealand a foot into any ASEAN-Far East trading block. The progressive government is bound to cut the corporate tax rate to match Australia's.

And after all that, still three quarters of our companies say they have no plans to achieve growth through exporting. It just shows how much work lies ahead of us as a society and it highlights also why we need another decade of progressive, engaged government.

www.ema.co.nz/News_08_25_2006.htm

No to capital punishment

We don’t have lawful capital punishment in New Zaland but that is in effect what 17-year old Liam Ashley was sentenced to when he went in that prison van, staffed by private contractors Chubb. What should be done?

First an inquiry that is independent of Corrections.

Second, an absolute prohibition on under 18-year-olds (perhaps under-20) being incarcerated in any shape or form with adult offenders.

Third, bring transporation of inmates back under the public service where a Minister is responsible to Parliament for what goes on.

Fourth, implement that part of my 2001 report About Time (www.justice.govt.nz) that recommended special centres dedicated to treating young offenders like Liam so that judges, and parents, have a safe but effective alternative to prison for the young first time offender.

ENDS

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