Key Points:

The head of the Electoral Commission has described the new electoral law as having had a "chilling effect" on people's willingness to speak out over election issues.

In an outspoken speech, Dr Helena Catt has outlined the difficulties the commission is having with the new Electoral Finance Act, describing it as containing significant "obscure" sections and uncertainty which had stifled political activity.

"It is clear that having uncertainty remaining within the regulated period has had a chilling effect on the extent and type of participation in political and campaign activity."

The law was passed under great controversy in December last year, and its provisions applied from January 1 because of the extension of the election period from three months prior to an election.

In Dr Catt's speech yesterday to the Lexis Nexis electoral finance law forum, she said significant parts of the law were "obscure" and the commission was "unable to be as fast and definitive in our actions or guidelines as would be desirable".

She warned the Commission's decision were open to legal challenges, which was made more likely by the heightened litigious environment following the controversy over the new law.

"The Commission is not confident it will be able to reach informed positions on the interpretation of some provision within the election period, and note the situation is exacerbated by the legal reality that it cannot finally determine questions of whether, for instance, an item is an election advertisement."

National Party deputy leader Bill English said Dr Catt was effectively confirming the EFA was unenforcable.

"This has confirmed National's worst fears. The voices of those who want to participate in our democracy have been silenced and just a few months out from the election watchdogs still don't know what an election advertisement is."

He said the Commission was effectively saying it could not promise the law would be properly policed or applied and said this was "the direct consequence of Labour's decision to railroad the law into place with the support of NZ First and the Greens".

Dr Catt's speech said the Commission had not been given the extra resources it needed to properly police the new law.

Major changes made at the last minute, and the short period between the bill passing into law and coming into force on January 1, meant its practical implications could not be worked out in advance.

"A lack of broad political consensus through the passage of the bill and since has resulted in difficult law delivered into a litigious environment."

New rules for political parties, candidates and third parties meant some had already been "caught out" by the new administrative requirements.

She predicted further challenges following the election, including over party election and donation returns, including the new line between election expenses and expenses which are precluded because an MP was acting in their "capacity as an MP," rather than electioneering.

It had increased its legal staff from one half-time position to two full time positions, and was also relying heavily on external advice.

The Commission has already faced legal action from the National Party challenging its decision to allow the Engineering, Printing and Manufacturing Union to list as a third party - with the court last week ruling in the Commission's favour.