Payback sought from new election-spending law

Labour is close to introducing legislation to overhaul election campaign funding rules but Parliament's small parties want to settle grievances over broadcasting time in return for their support.

They are seeking a bigger slice of the $3.2 million in taxpayer funding for election advertising on radio and television.

The Government's proposed reforms are being kept under tight wraps as behind-the-scenes horse trading progresses over the contents of a bill, but National says it's time it was brought into the loop.

The bill will amend the 14-year-old Electoral Act and could be introduced any day.

It is widely expected to usher in a regime of capped state funding of parties, and crackdown on third party and anonymous donations following the row over the Exclusive Brethren's advertising campaign and the way secret trusts were used to channel donations during the 2005 election.

It is also likely to tidy up the rules around election expenses and definitions of election activities after a ruling on these issues from the court battle for Tauranga between NZ First leader Winston Peters and National's Bob Clarkson took some party administrators by surprise.

Well before these controversies, small parties were crying foul over the way the Electoral Commission carved up the $3.2 million available for election broadcast campaigning in 2005 under the Broadcasting Act.

The two main parties again secured the lion's share of the money while the six other parliamentary parties had to share the remaining $1 million.

Political parties are legally barred from campaigning on radio and television outside this funding.

NZ First felt especially hard done by when, despite having 13 MPs at the time, it was granted twice the money of the then single-MP Maori Party for buying broadcast time.

Small parties argue the commission is biased toward the two big parties because its makeup reflects the two-party system before MMP.

The commission's two political party representatives come from Labour, for the Government, and National on behalf of all opposition parties.

NZ First is refusing to comment on its discussions with the Government, and other parties are being unusually cautious in what they will say.

But it is understood several are pressing for concessions on the broadcast funding allocations, knowing the Government wants a healthy majority to back the wider changes to campaign funding rules.

The Green Party has long argued there should be no political party representation on the Electoral Commission and that it should be entirely independent.

Co-leader Russell Norman said the discussions with Labour over the bill's contents were quite advanced, but would not go into detail.

His co-leader Jeanette Fitzsimons said the Greens had not yet decided to support Labour's campaign funding proposals, but she confirmed that the shape and membership of electoral authorities were part of the discussions

She declined to say if the representation issue would be a condition of support. "What I can say is that we will be arguing strongly for all of the issues that we have put forward over the years and trying to get the best outcome that we can."

Discussions were going on among a number of parties and the Greens would talk to any party with a common cause, she said.

ACT leader Rodney Hide said his party opposed restrictions on how people spent their money in politics, but he would not rule out a compromise on the legislation if there could be a fairer allocation of broadcast funds.

All small parties agreed the two big parties were ripping off the system, he said. "They stop you spending your own money and give all the money to themselves."

Small parties were having a good dialogue this year, "and no doubt we'll have a good dialogue on this".

United Future leader Peter Dunne would not discuss details of his party's discussions with Labour on the matter.

Justice Minister Mark Burton's officials reviewed the spending rules, and he will confirm only that work has been done on the bill's framework and consultation with other parties is under way.

The Government was on track for the new law to be passed by the end of the year, he said.

However, it is understood Labour will resist tackling major changes to the Broadcasting Act in time for the 2008 election.

It needs to get the Electoral Act changes settled this year because of a convention that any changes to electoral law should not be made in election year.

There are fears a parallel major rewrite of the broadcasting rules will get bogged down in a debate about the workability of future controls in the Internet age.

But sources say Labour intends to at least tighten the enforcement provisions for breaches of the broadcast rules after National effectively breached its allocation in a mixup over its GST bill, without penalty.

National deputy leader Bill English said it was time National was brought into the discussions because the changes were to the electoral system and would affect everyone.

"In the past, the political parties all had to compromise to get a set of rules that broadly had all the support of the political parties, and that's the approach we want to see continued," he said.

National was keen for more transparency, tighter rules around third-party advertising and a better enforcement regime but it opposed state funding of political parties, he said.

"It would be, I think, unacceptable to the public to have the Government legislate to take taxpayers' money to put into the Labour Party bank account," Mr English said.

"We are concerned that the Government hasn't approached us because they're wanting to try to get a majority for state funding with a ceiling."

* Under the present law, parties that field candidates in all seats can spend no more than $2.38 million on campaign expenses, excluding their state-funded broadcast allocations.