Complacency can be a nation’s greatest foe.

New Zealanders, buoyed by their country’s high ranking in global transparency measures, see little to learn from other states when it comes to cleaning up politics.

This attitude has left the country with a startlingly lax political donation regime.

There is no limit on how much any individual or company can give a political party, and donations under NZ$15,000 remain anonymous.

Unsurprisingly there are strong suspicions that larger donations are often broken up into sub-$15,000 chunks and passed on by intermediaries to avoid disclosure.

Consequently party donations have become a weeping political sore.

The latest revelation to reopen the wound is that the New Zealand First party, one of three members of the ruling Labour-led coalition, has been operating a secretive foundation that appears to have channelled hundreds of thousands of dollars in undisclosed donations into its coffers. (It insists it has “operated within electoral laws”.)

This follows a string of other scandals. The country’s fraud watchdog is looking into allegations by a former National MP, Jami-Lee Ross, that the party leader, Simon Bridges, asked for donations to be split up to avoid disclosure. Bridges has consistently denied any sort of wrongdoing and has called Ross a “liar”.

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Both National and Labour have courted controversy by selling access to MPs – and on the face of it cabinet ministers – to unnamed wealthy donors. And New Zealand First’s leader, Winston Peters, was censured in 2008 over a NZ$100,000 donation from the billionaire Owen Glenn.

It’s not always possible to prove that these donors get their way with politicians. But the country’s party funding regime “keeps the doors open for people to buy political influence”, says Prof Michael Macaulay from Victoria University of Wellington’s school of government.

The issue clearly predates the term of the prime minister, Jacinda Ardern. But it still falls to her to clean up the mess.

The scandal surrounding New Zealand First is likely to taint her by association, or at least create acres of negative headlines that distract from her achievements. And if her government’s famous pledge to be the most “open and transparent” ever is to mean anything substantial, she cannot let the donations regimes stand.

Ardern has often taken the lead on global issues, including the pushback against online hate speech. But on this she will have to follow the pack.

She could do worse than imitate Canada, which bars anyone from giving more than C$1,600 to any political party in any given year. This allows relatively small anonymous donations from people who might legitimately not want to be named, such as public servants, while curbing the baleful influence of big money.

The funding shortfall for Canadian parties is made up with taxpayer funding based partly on a party’s number of seats. But if Ardern wants to reclaim the mantle of the innovator, she could make New Zealand one of a handful of states to have tried democracy vouchers, a scheme in which every citizen is given a small amount of money to donate to the party of their choice.

This could radically democratise party funding, encourage politicians to develop policies that appeal to poorer and middle-income people, and help newer parties get off the ground.

Another longstanding stain on the country’s reputation for transparency is the absence of information about political party finances. Although parties are private organisations, they play an essential role in the democratic process. This is all the more true in New Zealand, where the parties control who gets on to the “lists” of proportionately elected candidates who make up 49 of the 120 MPs.

In return for allowing parties that power, New Zealanders might reasonably expect much greater transparency about their finances: their expenses, membership fees, contributions from affiliates, other sources of income, assets and so on.

This would help limit financial murkiness and is easy to achieve from a technical point of view. Britain, for instance, requires all political parties to publish annual accounts and makes them publicly available on the website of its Electoral Commission.

Such reforms could be politically difficult, of course. Inertia, vested interests and the likely outcry over any increased taxpayer funding would all provide formidable obstacles. And New Zealanders have for the most part refused to look too closely at these failings in their political culture.

But one of the tasks of leadership is to occasionally puncture national complacency and it is precisely that leadership that Ardern now needs to provide.

Max Rashbrooke is the author of Government for the Public Good: the Surprising Science of Large-Scale Collective Action.

