Police are investigating the Labour Party for the $440,000 it spent on pledge cards and pamphlets sent to homes before the election.
It is the first time the Electoral Commission has referred a political party to the police for allegedly overspending in breach of the Electoral Act.
The party was allowed to spend $2,380,000 but in fact spent $2,798,603.
Individuals from the party could be charged with either illegal practice, which carries a maximum fine of $3000, or the more serious corrupt practice, which carries a maximum fine of $4000, one year in prison and prevents the person convicted from voting or standing for election for a period of time.
In dispute is $446,815 spent on the party's pocket-sized red pledge cards and large colour fold-out pamphlets, key weapons in the election campaign.
The material carried the parliamentary crest and was funded from the Office of the Leader's budget - a sum the Parliamentary Service gives each party to spend.
The rules on such spending state the advertisements must not solicit money, membership or votes.
The National Party had complained about Labour's "My Commitments to You" card of election promises and the A2-sized foldout that read: "Working together, sharing a vision. Labour's policies for the future."
Labour declared the amount in its election expenses, but included an auditor's report which highlighted that there was dispute about whether the amount was an election expense.
Electoral Commission chief executive Helena Catt said her opinion was that the money was spent on election activity.
Dr Catt said the commission had sought legal advice before forwarding the case to police.
"The legal advice that we had and discussion of it seemed to us [that] there were sufficient indications that it was election activity that we thought it should be referred to police for further investigation,"
Labour president Mike Williams said it was the party's view that the electoral law was outdated and unclear.
"We hope that these investigations will lead to greater clarity in the future."
National had complained to the Chief Electoral Officer about the funding of the pledge cards and pamphlets, claiming that Labour had been trying to get the money out of the Parliamentary Service rather than paying for the advertising out of party funds.
National Party president Judy Kirk said the announcement showed the party's complaint was valid.
"We did raise it because they were using taxpayer funds and I'm very pleased police are investigating the matter. It's a real concern."
She suggested the material might have affected the election result.
"It's a real concern. This is a significant amount of money and there was a very close election result."
Last June, the Auditor-General tabled a report in Parliament that examined publicly funded publicity and advertising by Government departments and political parties.
The report said the Audit Office had been concerned for "some time" about weaknesses in the guidelines for such spending, and noted big growth in publicly funded parliamentary party advertising.
In December, the Electoral Commission referred the National Party to the police for suspected offences under broadcasting law. The party is alleged to have booked advertising above its allocation.
The police are also investigating the Exclusive Brethren election pamphlets that attacked the Greens during the election.
- Additional reporting: NZPA