Key Points:

Justice Minister Annette King says the Electoral Finance Bill will be changed to meet concerns raised by the Electoral Commission.

The bill was given its second reading in Parliament yesterday.

Ms King said Electoral Commission chief executive Helena Catt had raised concerns in two main areas - "in the interpretation of the words 'in his or her capacity as a member of Parliament' and 'inducement to vote'."

Ms King said the Office of the Clerk had advised that the term "capacity as a member of Parliament" could not be defined in the bill because it was also used in other legislation for which the meaning might be different.

However, the minister said, it could be defined in the commentary as an indication of what was meant by it.

And she gave her definition of the clause: "In my view, the capacity as an MP refers to our participation in the business of the House, the electorate, and other representational duties."

It covered work as members of the Executive or an Opposition spokesperson that interacted with the business of the current Parliament, "and excludes the statements of policy made outside the House, intended to be enacted by a future Parliament".

The commission also sought clarification on what form of statement constituted an "inducement to vote," saying "an inducement to vote only exists when a policy statement is tied explicitly by the member to voting, the election or an election outcome."

National deputy leader Bill English said it put MPs in a very uncertain position if the commission felt it could not advise them on the law.

"This legislation guarantees litigation," he said.

What now

* The week after next:The bill goes before the committee of the whole House, which will consider it clause by clause.

* Third reading, final vote.

* Legislation is due to come into effect on January 1.