KEY POINTS:
A backroom deal by Labour, the Greens and New Zealand First could make multimillion- dollar advertising campaigns by Government departments on Labour policy exempt from the election spending laws to be pushed through Parliament this month.
The Government has said previously that if its departments stuck by the existing advertising guidelines - that the material is factual and impartial - they would have nothing to worry about.
Suggestions that the Beehive is seeking immunity for Government department advertising indicates it is concerned that taxpayer-funded publicity campaigns on Government policy next year - election year - could face legal challenges from critics of the election law reform.
The passage of such immunity would give powerful ammunition to the bill's opponents.
It could be cited as evidence that the Electoral Finance Bill imposes limits on spending by the Government's critics while allowing millions to be spent on Government-backed campaigns promoting its policies.
Auditor-General Kevin Brady was so concerned about the issues of fairness in election year spend-ups by Government departments that he wrote a report about it shortly before the 2005 election, urging caution.
The electoral reform law is due to come into effect on January 1.
The justice and electoral select committee will meet behind closed doors at Parliament today, and political deals brokered in the Beehive are likely to be supported.
Another deal on the bill brokered by party leaders is likely to include some limit on anonymous donations to parties and donations from trusts - a win for the Greens.
And Labour and New Zealand First are expected to get their way on keeping the extension to the period during which election spending is regulated - from the present three months before an election to almost the whole of election year.
The bill has attracted hundreds of submissions to the justice and electoral select committee.
But it has been so politically charged that the repair job on it has stretched beyond the select committee to the upper levels of the Beehive, to the offices of Prime Minister Helen Clark and Deputy Prime Minister Michael Cullen.
If the committee finishes its deliberations today, the legislation could be reported back to the House as early as tomorrow.
Millions are spent on Government advertising each year. Much of it, such as anti-drink-driving campaigns, is politically innocuous.
But some is sensitive, especially in election year. That would include promotion of flagship Government policies such as Working for Families entitlements and Kiwisaver.
Promotions next year of Labour's flagship sustainability issues and New Zealand First's SuperGold card for the elderly are expected to be highly sensitive.
The proposed exemption would allow such promotions to continue in an election year without fear of them facing any legal challenge.
The Electoral Finance Bill, as it was introduced to Parliament, does not have an exemption for Government advertising.
But the definition of election advertising in the bill is so wide - taking a position on a position held by a candidate or party - that some people making submissions to the select committee believed Government advertising would have been affected by the law's provisions.
In that case, Government departments would have been limited to spending $60,000 - or whatever limit the committee sets - in election year and would have had to register as third parties under the bill.
The definition of political advertising is certain to be refined when the bill is reported back to the House.
But it may still be open-ended enough to raise questions over whether some Government advertising next year might attract legal challenges.
WHAT WE PICK THE COMMITTEE WILL DO
* Introduce immunity for Government departments' advertising.
* Set some limits on anonymous and trust donations to parties.
* Stick to a longer regulated period, from January 1 in election year.
* Tighten the definition of election advertising.
* Lift the non-party spending cap to $120,000.
