KEY POINTS:
There is concern within National that a worst-case scenario could see the party facing a bill of as much as $500,000 over GST.
National failed to add GST on to its broadcasting spending during last year's election campaign, and still owes $112,000 to the companies that carried its ads over a year ago.
If the party pays, it would breach its $900,000 broadcasting allocation - an offence which carries a fine of up to $100,000 under the Broadcasting Act.
But in a curious twist, some party insiders are worried National could face multiple fines. Their theory is that one fine would be incurred each time National paid each of the broadcasters it owed, which include TVNZ, Sky, Prime and TV3.
It is understood the prospect of multiple fines has been discussed internally by several MPs. There is also concern that whoever signs National's cheque to pay the GST would be the person judged to have knowingly broken the law.
Views within National's caucus over what to do about the GST debt are mixed, but several MPs hold the view that it should simply be paid and the consequences suffered, whatever they may be.
The situation has left National wide open to attacks from Labour, which is using every opportunity it can to call for its rival to "pay it back". National's GST calculation was put down to a "misunderstanding" between the party and its advertising booking agency.
Since it was discovered, National has tried unsuccessfully to introduce a private member's bill that would allow the party to pay the money without breaking the law.
That bill has yet to be drawn from the ballot, and in the meantime the broadcasters owed money have ended up paying the GST to Inland Revenue themselves.
A National MP told the Herald this week that the party had examined several ways it could pay the money, but to do so without breaking the law could require using something like an offshore entity to pay. Such a move would be a bad look for the party, which should just admit its mistake and pay, the MP said. "Everyone else except New Zealand First is tidy, and we're not - it'll come back to haunt us."
Some other National MPs are also known to be concerned the party is taking too conservative a view of its situation.
Indeed, Auckland University constitutional law expert Bill Hodge last night said that the chance of National committing multiple offences appeared slim. "The fine is for going over the cap," he said. "It's like a burglar going into your house, and first of all he steals your TV set, then he steals your stereo, then your microwave - I think the judge would say that's one act of burglary."
Dr Hodge said the "totality principle" would probably be adopted, and in this case it would be the totality of National going over its limit that might see it face one fine.
If National did pay, the Electoral Commission must refer the matter to the police if it thinks an offence has occurred. It was then up to the police to decide if there was a case.
