KEY POINTS:
Labour yesterday accused Bill English of becoming "hysterical" over confidential election financing proposals as National's deputy slammed the plans as undemocratic.
Justice Minister Mark Burton said National was deliberately scaremongering "to hide their real fears that the reforms will stop the National Party and groups like the Exclusive Brethren ever again rorting campaign funding and spending laws".
Labour is discussing its proposals behind closed doors with all parties except National and Act.
The most controversial move involves state funding which would give Labour - and National - at least $1.14 million a year. Mr English says this is aimed at helping Labour to repay the $800,000 the Auditor General says it unlawfully spent last election.
He questioned the proposal to limit non-political party campaigning to $60,000 but exempt groups from communicating with members, claiming that was aimed at exempting Labour-supporting unions.
Mr Burton said he wanted to reassure National's "increasingly hysterical Bill English that we would never put forward proposal giving preferential treatment to any particular group.
"I ask the National Party: what have they got to fear from a fair, open and transparent electoral system?"
Neither Mr Burton nor Acting Prime Minister Michael Cullen would discuss the proposed reforms.
But Greens co-leader Russel Norman said he agreed loopholes could be found but that was not a reason to back them.
"It is never going to be perfect. In some ways I liken it to tax law. People find loopholes in tax law all the time and then you have to constantly tie them up.The same around financing the democratic process. There are always loopholes being found and you just have to keep tying them up because democracy is too important; you can't leave it up to just people with money."
He hoped Parliament's other smaller parties would back the measures to a select committee, including state-funding, so it could at least get an airing.
Dr Norman, who refers to state-funding as "public funding", said it was the other side of the coin to the measures restricting donations. He described the proposals to restrict donations as an anti-corruption measure.
"There is a real potential for corruption. If parties are getting secret money and then providing secret policy kick-backs when they get into government, the public will never know because of anonymous donations."
He believed Labour had "struggled" with its management of the election funding issue and that it would have been better if it had established a commission last year.
Details revealed by the Herald include
Donations
* Lowering the threshold over which donations must be declared from $10,000 to $5000 for political parties and $1000 to $500 for individual candidates.
* Trusts allowed to give only up to $5000 anonymously.
* Ban foreign donations.
Third party campaigning
* Require any third party (such as a union or employer group) to register with the chief Electoral Office if it plans to spend more than $5000 nationally and $500 in an electorate.
* Cap any third party from spending more than $60,000 nationally or $2000 in an electorate.
* Exempt from the cap any organisation such as union or company communicating with its members.
* Restrict any third party to New Zealanders or New Zealand-based organisations.
* Make it clear that attack advertising on an issue or against a party should be included in third-party spending limits.
State funding of political parties
* Finance political parties to the tune of $2 per vote, up to 20 per cent of the vote at the previous election and $1 per vote after that to a cap of 30 per cent of the vote.
* Index state funding to the consumer price index.
Election expenses
* Keep the election spending limits where they are at present: $20,000 per electorate candidate ($40,000 for a byelection) and, for political parties, $1 million plus $20,000 per electorate being contested.
* Extend the start date from which spending limits apply from the present three months before the election to January 1 of election year.
Enforcement
* Create a special search warrant for suspected illegal practices of candidates and parties.
* Increase penalties for illegal practice from $3000 to $10,000 for individuals and $20,000 to $40,000 for party secretaries.
* Require any candidate who spends more than 75 per cent of his or her spending limit to have the expenses audited.
