Tax credits as a mechanism for political party funding in Aotearoa New Zealand: an exploratory study

Abstract

ABSTRACT This article explores tax credits for political party funding in Aotearoa New Zealand (NZ). Participation in the democratic process is low and declining in NZ, as political party membership drops and parties increasingly focus their attention on small numbers of large donors. Advantages of tax credits include incentivising parties to engage with society to attract donations, encouraging individuals to participate in the democratic process and potentially providing greater financial support to parties. The primary disadvantage is that tax credits require at least a small financial contribution from a donor, which will not be possible for everyone. For a relatively low cost of approximately NZ$2.35 per voter, large donations could be eliminated from the NZ political funding system, along with the concomitant potential for undue influence. Using the Canadian model for comparison, a similar system in NZ may result in greater public political engagement and better funded political parties.