It's payback time for parties [+audio]

Some parties are resisting repaying money unlawfully spent in the last election despite Labour buckling under public pressure and agreeing to pay back what it owes.

Auditor-General Kevin Brady's much anticipated final report found that parties unlawfully spent $1.2 million on political advertising in the three months before the September 17 election last year.

New Zealand First and United Future have made no commitment to repay what Mr Brady says is their share.

Of the small parties, New Zealand First has the largest liability.

Mr Brady says it spent $158,000 unlawfully.

Its leader, Winston Peters, said the party would consider a legal challenge against the finding.

The Greens, who previously promised to repay, yesterday indicated that they would wait for the result of such a challenge before making any decision.

MP Metiria Turei said they would repay their $87,000 only when it was found they "ultimately" had to.

However, this morning Mrs Turei issued a statement saying: "We have been presented with a bill for $87,192 and that's what we're gearing up to pay. But obviously we don't have that kind of money to hand so we will be going out to our members and supporters to help us raise these funds.

"We will pay as soon as we are able, and certainly before the end of the financial year."

United Future, which had said it would repay $5000, has not decided what to do with its $72,000 bill.

Leader Peter Dunne said the size of the bill came as a shock.

Labour's repayment is $825,000, about half of which was for its pledge card, understood to have been the main item that prompted the Auditor-General's scrutiny.

Prime Minister Helen Clark said yesterday Labour believed the Auditor-General's reasoning was wrong, but it had decided to "refund" the money.

"We have decided to put this matter behind us."

The party has set up a fundraising effort and plans a website called "thebigwhiparound".

Labour MPs will be expected to dip into their own pockets.

If they repaid half the debt, Cabinet ministers could expect to each have to write a cheque for $13,000. Other MPs would pay $8000 each.

That is likely to be on top of the 4 per cent that MPs pay to their party from their salaries.

Authority

Speaker Margaret Wilson could have directed parties to repay money illegally spent to the Parliamentary Service but she said she had no authority to enforce it. She has proposed retrospective legislation to validate the spending, and strongly suggested parties repay the money.

"Although reimbursement is not legally necessary if validating legislation is enacted, in this instance the matter must be considered seriously if public confidence in Parliament is to be maintained," she said.

Margaret Wilson, a Labour list MP, said she disagreed with the opinions of the Auditor-General, but would accept his findings.

"I see the situation as akin to accepting the decision of a court because you respect the authority of the court but beg to disagree with the reasoning of the court."

She foreshadowed a review of the accountability structures between MPs and parliamentary bureaucrats, and questioned whether the Speaker should remain the minister responsible for the Parliamentary Service.

She has asked parties to report to her next week so she can report to Parliament on Thursday about what they will do in response to the report.

Mr Peters said yesterday there was no way he could meet that deadline.

Margaret Wilson supplemented her report with a legal opinion from her private lawyer, Jack Hodder.

Helen Clark, Labour deputy leader Michael Cullen and Mr Peters cited Mr Hodder's opinion repeatedly yesterday.

He said Parliament's funding for MPs' communications with their electorates was not subject to restrictions within three months of an election - the period to which Mr Brady confined his inquiry.

Parliament's funding rules do not specify three months as the start of the electioneering ban, but Mr Brady chose that time because he considered that proximity of an activity to an election was important in deciding whether it was electioneering.

Taxpayers' money cannot be spent on electioneering, or on anything designed to support the election of a person or party.

The Parliamentary Service has been paying out on virtually anything that did not explicitly solicit votes.

Mr Brady found fault with the accountability structures in the Parliamentary Service, but said they were not the only causes of the breaches.

"I have found the nature and extent of electioneering advertising put through the service by MPs and parliamentary parties disturbing," he said.

Although inadequate guidance was given on what constituted appropriate advertising, especially in the period before the election, "the guidance clearly prohibits electioneering".

- additional reporting: Claire Trevett

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