Helen Clark

Helen Clark

Labour plans to restrict third-party election spending to $60,000 by any one group in its "payback" electoral law reforms - a move that will effectively outlaw campaigns such as the Exclusive Brethren's $1.2 million effort last election.

It also plans to attack an important source of money for National by limiting anonymous donations from anybody, including trusts, to $5000.

National received $1.8 million in 2005, all but $140,000 of it from six trusts.

People can maintain their anonymity by donating to trusts, which then pass the money on to the party.

And as an answer to suspicions that National is funded by foreign backers - as Labour claimed last election - the Government is planning to ban political donations from foreign sources, unless they come from expatriate New Zealanders.

In 2005, that would have let Labour keep its $300,000 donation from Sydney expat Owen Glenn.

But wealthy foreigners, such as US billionaire Julian Robertson, who contributed to National last election, would be banned from donating if the money was sent from overseas.

National Party deputy leader Bill English said last night the third-party rules were "designed to accommodate the unions and stop everybody else, and that is clearly undemocratic".

"If a group of concerned citizens wants to attack some party Labour doesn't like, why should they have to go and get permission?"

The confidential proposals are part of sweeping reforms being drafted into a bill that will be introduced to Parliament within three weeks.

The Herald has learned more of the detail, which includes measures to:

* Require any third party (a group or individual other than a candidate or registered party) to register its intention with the Chief Electoral Officer if it plans to spend more than $5000 nationally and $500 in an electorate.

* Restrict any third party from spending more than $60,000 nationally or $2000 in an electorate.

* Restrict any third party to New Zealanders or New Zealand-based organisations.

* Make it clear that advertising does not have to state the party or candidate's name to be subject to restrictions. Advertising attacking a party can count too.

* Exempt from the new third-party rules groups such as unions or companies when they are communicating directly with their members.