Mallard previously asked the party to remove the video - called "Say No to Labour's Forced Vaccination Agenda" - and referred the matter to the committee because he said it breached the rules of using Parliamentary footage.
The rules say that footage cannot be used for political advertising or election campaigning, except with the permission of all members shown.
Today the Privileges Committee released an interim report saying that it unanimously agreed the video was misleading.
"The video represents a blatant doctoring of Parliament's proceedings that is intended to
mislead viewers by implying a proposal for compulsory vaccination of New Zealanders," the committee said.
The clip uses Parliament TV footage of Minister for Managed Isolation and Quarantine Megan Woods speaking in the House about the Covid-19 Public Health Response Amendment Bill.
The Advance NZ video claims the act will force citizens to be vaccinated. "Think we are conspiracy theorists? Have a listen to the minister's own mouth."
It then uses clips of Woods saying the bill would set up the legal framework to require someone to be vaccinated:
"It could in the future include the requirement that someone is vaccinated, for example, if there is access to a vaccine in the future and that is something that the legislation will have the legal framework to allow for."
Director general of health Dr Ashley Bloomfield and Health Minister Chris Hipkins are on record as saying a vaccine to Covid-19 would not be mandatory.
The committee said the footage used in the video was about "the possibility" of requiring overseas arrivals to be vaccinated before entering the country.
"In the unanimous view of the committee, the misleading video should be removed from use, including by social media platforms," the committee's report said.
But Advance NZ co-leader Jami-Lee Ross rejected the committee's statement, saying it was acting like a "kangaroo court by holding a meeting, taking advice, forming a conclusion, and then making a finding, all without any input from those standing accused - myself and Advance NZ".
The committee added that any further steps would have to be for the next parliamentary term, given the imminent dissolution of Parliament.
That's because the committee needs time to conduct a full hearing - which would include hearing from Advance NZ - and then report back to the House, and a motion in the House would then be voted on.
Misusing parliamentary footage can be treated as a contempt, which can be fined up to $1000.
Imprisonment is also technically possible, though it has never been used in New Zealand before.
