Auditor-General puts 'pay it back' pressure on PM

Helen Clark

Helen Clark has faced fresh embarrassment after Labour received a clear signal it will be forced to pay back the taxpayers' $800,000 it overspent during its election campaign.

Auditor-General Kevin Brady told the Herald on Sunday that payments made by both the National Party and Maori Party were the "end of the matter".

"If you're looking at what the remedy would be... they have decided the remedy is reimburse it. That's the end of the matter as far as we are concerned," said Brady.

"There will still be a breach of appropriation but the remedy was repaying it so that would be the end of it; no further action required."

The comments are likely to ratchet up pressure on Clark, who has so far dismissed calls to pay back the money.

She has previously said "the Auditor-General has never asked for money to be paid back by political parties".

"That is really just a National Party beat-up."

Brady's comments are also likely to infuriate Clark. She has said she was surprised at the one other interview he granted since the spending affair became public, when his final report was still not complete.

The issue drove Parliament to some of its ugliest behaviour last week as National MPs barracked the Government over its taxpayer-funded $446,000 pledge card, which the Auditor-General has now decided was an election expense.

National had also been criticised for incorrectly spending $10,500, but has written out a cheque for the amount to Parliamentary Services. The Maori Party has also written a cheque for the $53 it is thought to have incorrectly spent.

The largest amount singled out by the Auditor-General is $800,000 worth of spending by Labour. It is thought the Act Party's figure is $60,000 and United Future's $40,000.

Clark and her colleagues have suffered a slip in the polls since the Auditor-General's inquiries into election spending and the the investigation into Labour MP Taito Phillip Field.

Brady said he expected a draft report would be presented to Parliamentary Services this week, and would include the sum of his inquiries into the issue, rather than just the amounts he believed were incorrectly spent.

The House is resting next week for three weeks, which will string the issue out until it meets again and the report is made public.

Also this week, Parliamentary Services is expected to file its statement of defence in the private prosecution by Libertarianz leader Bernard Darnton of Clark and the service. Darnton is asking that the court order Clark return the money.

Mr Brady said if the money owed by parties had been paid back in the same financial year it had been incorrectly spent, they could have had it again.

"They could have spent it if they'd spent it on another area appropriately," he said.

National Party deputy leader Gerry Brownlee said Brady's comments meant the only way Labour could avoid paying the $800,000 was to change the law.

A spokesman for the Prime Minister said Labour was waiting on the final report.