Herald's 'goose' won't be plucked, says Cullen [audio report]

Deputy Prime Minister Michael Cullen yesterday denied threatening to withdraw retrospective tax legislation beneficial to the Herald in retribution for the newspaper's criticism of legislation validating unlawful election spending by parliamentary parties.

"There is no intention to withdraw retrospective legislation to help the New Zealand Herald's owners out of its tax pickle," said Dr Cullen.

On Tuesday night he issued a press statement that had been interpreted as a veiled threat.

He had linked the Herald's editorial criticism with a GST tax bill before Parliament that takes effect from 2001 and will benefit APN, the Herald's owner, and other businesses.

The measure had been accepted as an appropriate law change by the Inland Revenue Department's policy unit.

"The Herald would be wise to consider the consistency of its position," Dr Cullen warned on Tuesday night.

Yesterday he issued a statement headed "the goose will get its sauce and won't be plucked".

He said he would not be pulling the legislation - introduced last month by Revenue Minister Peter Dunne.

He said the Herald was being hypocritical and the sensible way forward on the GST issue and the election spending issue was retrospective legislation.

He responded to National leader Don Brash, who accused Dr Cullen of imitating a Robert Mugabe-style regime.

Dr Cullen and Prime Minister Helen Clark have been leading the charge for parliamentary parties fingered in a draft Audit Office report for unlawful expenditure of taxpayers' money in the three months before last year's election.

The draft report cited an opinion by the Solicitor-General setting out established case law defining electioneering material and which Parliament's rules ban. Labour has by far the largest liability, estimated around $800,000, just over half of which was the cost of its trademark pledge card.

Act is thought to have the second highest liability of about $60,000; United Future has about $40,000. The Greens have at least $20,000 deemed unlawful for a pre-election newsletter.

Dr Brash incurred no liability but several individual National MPs incurred a $10,588 liability and have repaid it to Parliamentary Service - Parliament's administrators.

The Maori Party confirmed yesterday that its liability was just $53.66 and that it planned to repay it.

The Progressive Party incurred no liability.

New Zealand First deputy leader Peter Brown could not say what his party's liability was but said the Auditor-General had gone "too far" in his assessment of what was unlawful.

Labour reasons that, if the expenditure was unlawful in the three months before the election, it was unlawful in the 16 years before as well and needs retrospective legislation to validate up to $350 million of taxpayer-funded political advertising.


Electioneering is art of persuasion

* The Solicitor-General agrees with a long-established High Court definition: "Electioneering material is something that is intended to persuade a voter to favour a candidate or party in an election, and it is not necessarily advertising or publicity to expressly solicit a vote for it to fall into this category."

* Auditor-General's draft report "I am concerned to have found a substantial amount of material that clearly falls into the exceptions published in the Speaker's [expenditure rules] ... Even where no express soliciting of votes occurred, a large number of communications contained material that can only be described as election platforms and promises ... In my view, any reasonably person would conclude that such material was part of the party's election campaign."

* Principle adopted by MPs on Parliamentary Service Commission:"Ultimately, members are personally responsible for the way they and parliamentary political parties use the public resources entrusted to them."