Backdown tipped over election finance law

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The Government may be having second thoughts over parts of its highly controversial Electoral Finance Bill, which all but stops third-party campaigning during elections.

An outcry has followed Labour's tabling of the bill in Parliament, after lobby groups and unions realised that they would be unable to spend more than $60,000 during the entire election year communicating their views to the public.

National's deputy leader, Bill English, has written to hundreds of organisations that might want to express an opinion during next year's campaign, and yesterday Prime Minister Helen Clark also said people should have their say on the bill.

The bill has been substantially watered down since Labour announced late last year that it intended to tackle the country's outdated electoral finance law, cracking down on anonymous donations, limiting contributions from offshore, banning blind trusts and imposing limits on the amount third parties can spend on campaigning.

The legislation tabled by Justice Minister Mark Burton does virtually none of this, however, except severely limiting third party campaigning.

Prime Minister Helen Clark said yesterday that in attempting to stop third party advertising Labour "may have cast the net too wide", catching legitimate lobby groups and others who wanted to have their say during the election campaign.

"I think the select committee should have a good look at the whole bill," Clark said.

"I understand there has never been an electoral bill go to select committee and come out unchanged, so undoubtedly it will come out changed."

Changes around third party financing were based on British and Canadian law.

"These things haven't just been dreamed up by officials. They are based on looking at what much tighter regimes in other countries are based on."

Clark said the idea behind the bill was to restrict third party advertising, such as the Exclusive Brethren's anti-government, anti-Green campaign at the last election.

"It's people like the Brethren covertly spending $1m in a clearly party political way, but just managing to keep it a whisker outside the law as it's been, and that's what we need to focus on."

Clark also revealed Labour's concern that National planned to use leader John Key's personal wealth during the election campaign.

She said she would be happy to see a clampdown on anonymous donations but only if there was some form of state funding "because the Labour Party isn't led by me with a $50m bank account".

"We are not in a position to just write vast, personal cheques whereas a party which has traditionally represented higher-income people is," Clark said.

Asked whether Labour feared Key would personally fund National's campaign, Clark said: "That's entirely a matter for him."

National's finance spokesman Bill English said Clark's comments on Key's wealth revealed Labour's "deep-seated paranoia" about a politician they could not deal with.

Clark had made a "massive misjudgment" over the legislation and Labour would likely be defeated on it.

"There's nothing in this bill that works. It's not a matter of minor adjustments."

Meanwhile the Coalition for Open Government, which is lobbying to make campaign finance laws more transparent, said yesterday that it had received a copy of a Cabinet paper penned by Burton last December that called for tough limits on anonymous donations.

The paper argued that the current lack of controls on anonymous donations "significantly weakens the current disclosure regime and therefore the integrity of the electoral process" according to excerpts released by the coalition.

In the paper, Burton recommended a limit of $5000 on anonymous donations and a ban on "indirect donations" through private trusts.

Those who hid donations or sought to do so would be prosecuted, and money a party could not identify would be handed over to the Electoral Commission.

Overseas donations would be banned unless the donor was registered to vote in the election.

The clauses were all dumped from the bill that appeared in July, however, suggesting Burton was rolled by his Cabinet colleagues.

With NZPA

- © Fairfax NZ News