KEY POINTS:
Prime Minister Helen Clark has conceded that Labour's proposals to tighten election advertising and campaigning rules may have gone too far, and she expects the controversial legislation to be changed by a select committee.
The Prime Minister also yesterday gave the strongest indication yet that Labour's decision not
to block the flow of anonymous donations into political party coffers was prompted by concern about its own ability to raise campaign cash.
The Electoral Finance Bill has drawn criticism from all sides since it was introduced to Parliament little more than three weeks ago.
It changes the laws on electoral funding and includes a restriction on the amount that third parties such as the Exclusive Brethren can spend on advertising during an election year.
But in trying to prevent a repeat of the Brethren's surprise 2005 election advertising attacks, the proposed law could also catch a wider range of legitimate pressure and interest groups.
National says the proposals are draconian and has accused Labour of making self-interested and anti-democratic changes.
Helen Clark yesterday repeatedly said that change was needed after last election's Exclusive Brethren campaign, in which seven businessmen associated with the church spent about $1 million on advertising attacking National's opponents.
But she also appeared to concede there could be a problem with theproposals.
"It may well be that in endeavouring to fix that, the net's been cast too wide," the Prime Minister said on Newstalk ZB.
"That's why you need good scrutiny at a select committee."
Later in the day, she said the bill would "undoubtedly come out changed".
Even those in favour of election financing reforms have been questioning aspects of the legislation because it does not stop anonymous donations to political parties - one of the things Labour had previously strongly favoured.
Explaining this, Helen Clark fired a personal shot at the National Party's multimillionaire leader, John Key.
"The problem is if you're going to totally clamp down on anonymous donations - which I'd be very happy to see - you do need some quid pros quos," the Prime Minister said.
"Because the Labour Party isn't led by me with a $50 million bank account."
She said the Labour Party had support from many people on low and modest incomes and "we are not in a position to just write large personal cheques".
Labour could not gain enough support from other parliamentary parties for more state funding of parties, which would have offset the loss of anonymous donations.
The minister in charge of the bill, Mark Burton, yesterday issued a document comparing the legislation with rules in the United Kingdom and Canada.
He said both countries had stricter rules on anonymous donations to interest groups wanting to campaign during an election year than those proposed for New Zealand.
National Party deputy leader Bill English said yesterday that the Prime Minister had been involved in drawing up the legislation.
She couldn't therefore suddenly distance herself from it.
"This bill did not miraculously appear from nowhere."
Mr English said the legislation had been the subject of lengthy Cabinet discussions chaired by the Prime Minister.
"Her decision to proceed with the bill as drafted is testament to how out of touch her Government has become."
