Key Points:

National claims that Labour's 2005 election pledge card would be legal under a bill on parliamentary spending that is to receive a first reading in Parliament today. Political editor Audrey Young explains that claim, how MPs have immunised themselves against Parliament's old spending rules and how they are planning to give themselves even greater immunity in election campaigns under the Electoral Finance Bill, at present before a select committee.

What does the new bill on MPs' spending do?

The Appropriation (Continuation of Interim Meaning of Funding for Parliamentary Purposes) Bill gives MPs the right to spend their parliamentary funds on advertising as long as they do not explicitly seek votes for a candidate or party or seek donations or subscriptions for party membership.


Isn't that the law anyway?

Yes, but it has been the law for only the past year and the relevant provisions of the act were due to expire at the end of this year. The bill will extend the law to June 2009, well past the next election, due at the end of 2008.

What did the old law say?

Spending parliamentary money on advertising that expressly solicited votes or money was banned, as it is now. The difference is the rules didn't say "anything else goes" - which is the effect of the new law. The new application is at variance with the Auditor-General and the Solicitor-General who took the view of the old rules that political advertising could be deemed to be political advertising if it looked like political advertising.

Would Labour's pledge card now be lawful?

Yes, though Helen Clark has all but confirmed that Labour won't be producing another one. But it would now be within the rules because the cards do not say "vote for Labour" - they set out Labour's policy commitments.

Don't the rules apply equally to parliamentary funding, for example by National on its large mail-outs attacking the Electoral Finance Bill? Is it unfair to concentrate on Labour's pledge card?

Yes and no. There is no question that National's political campaigns now are as equally lawful as a pledge card would be. But then-and-now comparisons with National taxpayer-funded electioneering in 2005 are harder because very little of National's parliamentary spending then was found to be in breach of the law. The pledge card is the best example because every household received one and it came under such heavy scrutiny by so many heavyweight authorities.

So what has changed?

To understand the extent of how things have changed, and will change, we have to identify the different regimes under which spending rules applied and will apply, inside Parliament and outside Parliament. The pledge card was of concern under two regimes: whether the Parliamentary Service, which paid the invoices for the card, met the conditions under the Public Finance Act 1989 of expenditure voted to it (the Auditor-General found it didn't); and whether the card breached requirements of election expenditure under the Electoral Act, which applies to all electoral contestants. The Electoral Commission found overspending, but the police did not press charges. The police recommended that Parliament's rules be changed to prevent such expenditure on the pledge card.

How would the pledge card be treated again under each of the regimes?

It would now be a lawful use of parliamentary funds. But under proposals in the Electoral Finance Bill, such advertising expenditure will no longer be allowed to be scrutinised by the Chief Electoral Officer or the Electoral Commission alongside other election contestants. That is because the EFB expressly exempts "any publications that relate to a member of Parliament in his or her capacity as a member of Parliament" from being counted as an election expense.

So what does that mean in effect?

When the Chief Electoral Officer comes to decide whether election advertising has met all the requirements under the amended Electoral Act - as it will soon become with the passage of the Electoral Finance Bill - anything produced by parliamentary funding will be exempt. And when the Electoral Commission looks at the election expenses returns, no party will be expected to include the cost of literature paid for by Parliament.

How does the parliamentary spending bill relate to the Electoral Finance Bill?

They both have similar provisions for defining election advertising as it affects MPs, but the result is that the rules which will govern MPs and parliamentary parties in an election will be different to other candidates.

Winners and losers?

Sitting MPs will have a huge advantage over non-parliamentary parties and candidates. The immunity on their spending runs for the entire three years of an election cycle. Their opponents have restrictions placed on their advertising from January 1 of election year.

Each party, or an individual MP, could run, say, a $15,000 newspaper and radio tax-payer funded campaigns on their policies funded by Parliamentary Service - at any time of an election cycle up to election day.

For example:

* Only Labour will protect health services.

* Only National will give you meaningful tax cuts.

* Only New Zealand First cares about the elderly.

* Only the Greens will save the Earth.

* Only the Maori Party is an independent Maori voice.

* Only United Future centres on the family.

* Only Act wants a flat tax.

* Only Jim Anderton fights drug abuse.

These parliamentary-funded campaigns, if they did not explicitly seek support or money, would not be classed as an election expense.

A similar campaign run outside Parliament will fall within the definition of an election advertisement under the Electoral Finance Bill.