The Electoral Commission may have to consider whether taxpayer funding for Labour's Budget promotional brochure is a "donation" to the party under the Electoral Finance Act.
If it is, the commission will also have to determine whether Labour has breached the law by failing to file a return for donations of more than $20,000 within the time limit of 10 working days.
Labour has so far refused to reveal the cost of the brochure, which was funded by the Parliamentary Service and outlines what Labour delivered in the Budget, including its tax-cuts programmes.
However, independent sources in the advertising industry estimated printing costs alone would range from $25,000 for 500,000 copies up to $70,000 to print 1.5 million - enough for every household.
Although the brochure does not breach either Parliament's spending laws or the new Electoral Finance Act, yesterday electoral law expert Graham Edgeler told the Herald he believed the Parliamentary Service's funding for such party promotional material could be considered a "donation".
The head of the Electoral Commission, Helena Catt, said it would consider the matter. "We don't know what it cost, but if it was more than $20,000 and it was a donation, then we need a report of it within 10 working days after they receive the donation. If we don't get anything from Labour, we will have to put it on the agenda for the July meeting."
The brochure carries Labour's authorising statement but Prime Minister Helen Clark has so far refused to comment on the leaflet, beyond saying the party's election expenses would be included in its post-election returns.
She has not said whether the party considers the brochure to be election spending, which must be included in its $2.4 million spending cap.
National Party deputy leader Bill English said Labour must state whether it would use taxpayer funded material as an election expense, in the interests of transparency. He said Labour had initially said its pledge card would be included as election spending in 2005, but it had not done so.
"The illegal pledge card spending was made legal with retrospective legislation. It was only a matter of time before Labour used the loophole it created to resume campaigning on the public purse."
Mr English said it was possible parliamentary funding could be considered a donation if it was used for party purposes.
Labour changed the law last year after an Auditor-General's report into election spending in the 2005 election. The party was forced to pay back $824,000 for its use of taxpayer funded material, including its pledge card, which it did not declare as election spending.
A law change validating such expenditure has stayed in place for this election.
The brochure was paid for out of Labour's parliamentary budget and approved by the Parliamentary Service, which stipulates such material must not include electioneering. However, the Electoral Finance Act has a broader definition of election advertising.