Key Points:

Justice Minister Annette King will tell MPs before the Electoral Finance Bill is passed how to avoid being caught by the provisions of the bill.

Under the bill's get-out clause of 80 d), MPs are exempted for "anything done in relation to a member of Parliament in his or her capacity as a member of Parliament".

The bill takes effect from New Year's Day.

There has been great confusion over how to define an MP acting in his or her capacity as an MP.

Ms King acknowledged two weeks ago that the Electoral Commission was looking for guidance and she offered the view that the definition would exclude MPs talking outside the House about what they would do in a future Government.

She has since withdrawn that advice and said she would listen to the views of the House.

Yesterday she gave a commitment to Parliament that she would give another interpretation of the clause "before this bill is passed".

National Deputy leader Bill English accused her of having created a "bungled shambles" of an explanation that left MPs and electoral agencies no better off than they had been.

Debate on the committee stages resumed after question time yesterday and part three of the bill - which deals with miscellaneous provisions including penalties and prosecution for breaches of the law - was passed.

The penalty for a corrupt practice by a party secretary or electoral agent under the bill is increased from $4000 to $100,000. For all other people the maximum fine will be $40,000.

"This gives the referees who protect the system more tools," said Ms King.

Debate became more heated when Labour and National revisited the 2005 election, Labour over the the Exclusive Brethren's support for National, and National over Labour's taxpayer spending on the pledge card.

Labour list MP Jill Pettis told National the bill was not about freedom of speech. "This is you wanting to spend filthy lucre from anonymous ... sources.

"Freedom of speech and the freedom to buy speech are not the same thing."

National list MP Georgina te Heuheu bit back over Labour's $400,000 pledge card charged to Parliament.

"She should talk about filthy little hands and she should talk about getting caught out. Because it's that party that got caught with their filthy little hands in taxpayers' funds, public funds.

"The only reason she can stand there and pretend someone else got caught is because that party made their illegal action legal through an act through this Parliament."

Justice and electoral committee chairwoman Lynne Pillay said the committee had recommended an increase in the maximum prison term from one year to two and the fine from $15,000 to $40,000 so the penalty fitted the crime.

"That sits alongside all the other common sense changes to this bill that bring back accountability, transparency and honesty into our electoral system."

National list MP Tim Groser said: "The person who is going to be selected as the financial agent has to be either a person of unsurpassed naivete or have a heroic sense of martyrdom, or both. I would personally recommend anybody contemplating the role as financial agent to seek out a job in Zimbabwe as responsible for reporting on CPI movements. This would be a much safer job than being a financial agent under this bill."

It was not just a matter of the fines or the terms of imprisonment for financial agents, but when the oversight of responsibilities was seen in relation to the imprecise obligations of the bill "you realise we will be looking for a martyr or an idiot".

New Zealand First list MP Doug Woolerton said National believed the law was the preserve of lawyers and they lived the law "at the edge" rather than doing what was right.

A former National Party member, he said he was ashamed to have had anything to do with the party in the past.

WHAT IT AIMS TO DO

In short, the bill:
* Extends the period of pre-election regulation from three months to virtually all of election year, starting on January 1 of election year.

* Requires political parties and third parties to appoint a financial agent to be responsible for all expenses and returns.

* Imposes a $120,000 spending limit on third parties wanting to advertise in an election campaign.

* Broadens the definition of election advertising.

* Limits anonymous donations to $36,000 a donor.

* Increases penalties for breaches of electoral law.

THEY SAID IT

* Freedom of speech and the freedom to buy speech are not the same thing. Jill Pettis, Labour

* It's that party that got caught with their filthy little hands in taxpayers' funds, public funds. Georgina te Heuheu, National

* I would personally recommend anybody contemplating the role as financial agent to seek out a job in Zimbabwe as responsible for reporting on CPI movements: that would be a much safer job than being a financial agent under this bill. Tim Groser, National

* This gives the referees who protect the system more tools. Justice Minister Annette King