Harre home to face heat of Alliance meltdown

By FRANCESCA MOLD political reporter

The Alliance's likely new leader, Laila Harre, arrives back in New Zealand this morning, walking straight into a factional fight over party funds and the task of thrashing out how to hold the Coalition together until the election.

Ms Harre left her family holiday in Fiji early to come home and deal with the fallout from Alliance leader Jim Anderton's decision on Wednesday to defect from the party at the next election with six other MPs.

Both sides have said they will continue to work in coalition with Labour until the election.

But Alliance president Matt McCarten yesterday suggested it would be more difficult to avoid disrupting the Government than he had thought.

Prime Minister Helen Clark has accepted she will now have to deal with two Coalition partners.

She believes her junior partner's division will not threaten the stability of the Government and has ruled out the possibility of an early election.

Early discussions on managing the Alliance split are expected to deal with the division of its parliamentary funds, which total $848,000 a year.

The National Party yesterday alleged that Mr Anderton would use the money to set up his new party.

But the Parliamentary Service general manager, John O'Sullivan, said there were strict rules governing how the money could be spent.

He said all MPs elected under the Alliance banner had indicated their intention to remain with the party until the election, so there would be no need to change the funding.

There is also the process of working out what to do with party funds.

Mr McCarten has declared that money raised by the Alliance must remain with the party.

The Anderton side has indicated that it is unlikely to squabble over the funds, which have been estimated to be as low as a few thousand dollars and as high as $60,000.

A major problem is the fact that many of the accounts are administered by the Democratic Party, which has also split from the Alliance.

Another finance question is the future of tithes which Mr Anderton and six other MPs diverted to a new "campaign account" about three months ago.

The MPs deposit 9 per cent of their parliamentary salary to the account, which could now total up to $15,000.

The breakaway group began gathering funds for the new party just 24 hours after announcing its split from the Alliance.

An advertisement yesterday in the Herald, headed "Commitment", asked people to become founding supporters and make a donation.

The advertisement was inserted under the name of the Democrats.

A spokesman for Mr Anderton said a bank account had been set up to accept the donations but he and others could not explain who supporters should make cheques out to.

National leader Bill English said his party would be ready for an early election.

It had about 85 per cent of its candidates selected. The party would announce its economic policy in the next two or three weeks.

* A big majority of voters do not want Prime Minister Helen Clark to call a snap election because of the split in the Alliance, a One News poll revealed last night.

Of 500 voters polled, 71 per cent opposed a snap election, 16 per cent backed one and the rest did not know.