Key Points:

Changes to the Government's proposed election finance law are so significant that it should go back for new public consultation, says the Human Rights Commission.

Parliament's justice and electoral select committee reported back on the Electoral Finance bill yesterday, after weeks of criticism and calls to scrap it and start again.

The commission says the changes go some way towards easing freedom-of-speech concerns.

The select committee refused to budge on one of the most-criticised provisions, under which the regulated election period would begin on January 1 of an election year, placing limits on spending by political parties and advocacy groups for up to 11 months rather than the current three months.

But the committee's changes eased the main concerns of many objectors by narrowing the definition of election financing so lobby groups and organisations can speak out on issues, and allowing them to spend more on doing so.

The Human Rights Commission had said the original bill would have a "chilling effect" on public participation in politics and that it placed too many restrictions on freedom of expression.

Asked yesterday if the commission still believed the bill should be scrapped, commissioner Dr Judy McGregor said the revision met many of the organisation's concerns, but it still had reservations.

"Had this bill been the original bill, we might not have felt so strongly. But now we are talking about a new piece of legislation," Dr McGregor said.

"We felt it was a fundamental constitutional law that was being changed and it would be desirable to have another round of public consultation."

She could see no reason for starting the election period on January 1, and was disappointed this was not changed.

Justice Minister Annette King said the revised period was "transparent and fair" because the previous three-month limit often left parties guessing when it would start if the Prime Minister had not announced an election date.

Labour says the bill will stop people with money being able to buy votes for their party through advertising.

National's deputy leader, Bill English, said the party would repeal the law if it led the next government.

He said the definition of election advertising remained uncertain, and Labour had ignored the standard practice of securing cross-party support before introducing electoral law.

"Labour is working hard to silence its critics in election year. If this draconian bill is allowed to pass, free speech will be heavily regulated for one year in every three."

Others have welcomed the changes.

The Coalition for Open Government said the bill was greatly improved, and welcomed provisions restricting anonymous donations for political parties and candidates and the changes to laws for third parties.

The bill changes are supported by Labour, the Greens, NZ First and United Future.

Green Party whip Metiria Turei said the $120,000 restriction on third-party spending would prevent those with deep wallets "drowning out Kiwi groups and people with legitimate election issues".

United Future leader Peter Dunne said his main concerns - relating to third-party activities and the definition of election advertising - had been addressed.

But he said he would not support any moves to push the legislation through under urgency.

The bill is likely to go back to Parliament for its second reading on Thursday. Annette King said she hoped it would become law before the end of the year.


* Limit on how much lobby groups can spend is raised from $60,000 to $120,000.
* The definition of election advertising is loosened.
* January 1 of an election year is retained as the start date for spending to be capped.
* Parties are limited to $240,000 in anonymous donations.
* The amount that can be given anonymously by an individual is limited to $10,000.