Parliament has moved a step closer to renewing a law giving political parties the right to dip into public information funds for electioneering.
The law change comes as the Government contemplates restricting non-party campaigning with the Electoral Finance Bill.
MPs last night passed the second reading of the Appropriation (Continuation of Interim Meaning of Funding for Parliamentary Purposes) Bill by 68 votes to 53.
The bill continues the liberal political advertising rules approved last year after a damning spending report by the Auditor-General.
Under these rules, MPs can use taxpayers' cash to publish anything that doesn't explicitly solicit votes or money.
The Electoral Finance Bill, now before a select committee, will impose tighter rules on political advertising by organisations other than political parties.
Some MPs are still railing against the Auditor-General's ruling which, under a tighter interpretation of the law, said most parties had unlawfully spent taxpayers' money on political advertising, and ordered them to repay it.
New Zealand First deputy leader Peter Brown said: "We need the bill [the Appropriation ... ] to protect us from the Auditor-General's wisdom."
Parties that supported the second reading were Labour, Progressives, New Zealand First, Greens, United Future and Act, plus independent MP Taito Phillip Field.
Against it were National, the Maori Party and Gordon Copeland.
National says the bill and the Electoral Finance Bill between them set up an uneven contest between election candidates who are already in Parliament and those who are not.
But Labour says National is opposing a bill that allows it to produce political advertisements.
Finance Minister Michael Cullen flourished a leaflet in the House yesterday produced by Nelson's National MP Nick Smith that, while within the spending rules, is a political advertisement produced under a law that National opposes.
It is a survey of constituents, but has a section headed "Why NZ needs a new Government" and is in National's colours.
Mr Smith's opponent in Nelson will be Labour list MP Maryan Street, who will also be able to produce a similar type of leaflet all year under parliamentary laws - and both will be exempted under clauses in the Electoral Finance Bill exempting publications for parliamentary purposes.
But a non-MP Green candidate, for example, producing a leaflet saying "New Zealand needs a new Green Government" will almost certainly be caught under the Electoral Finance Bill from January 1 and will have to count the cost as an election expense.
Green MP Metiria Turei hinted in Parliament at changes the select committee would recommend making to the bill.
She asked Justice Minister Annette King if she agreed with Green Party proposals "to protect the freedom of speech of non-governmental organisations and other groups by narrowing the definition of third-party election activities so it includes only genuine attempts to change the way that people vote."
Mrs King said yesterday that the bill was not finished.
"I do think some organisations are getting ahead of themselves. They've already judged that the bill is done and dusted. It's not done and dusted."