KEY POINTS:
National may have escaped its GST problems, with a plan to buy advertising time for charities from broadcasters still waiting for $112,000 they are owed from the election.
National owes the equivalent of the GST on its election advertising bill to five broadcasters. Party leader Don Brash has said the oversight was an acutely embarrassing but honest mistake. But if National pays the money back it will breach the Broadcasting Act electoral spending cap, facing prosecution and a heavy fine.
Instead, National has proposed it spend a similar amount to buy TV and radio time for charities. The plan would not resolve the breach, but National hopes its creditors - TVNZ, TV3, Prime, Sky and Radio Bureau - will find it an acceptable compensation.
TV3 and the Radio Bureau have endorsed the plan, while Prime-owner Sky TV and TVNZ are awaiting further details.
National president Judy Kirk, who unveiled the proposal yesterday, said the party had clear legal advice that it would be unlawful to pay the money, or for the broadcasters to accept any such payment.
"We do not wish to break the law, and nor do we wish to place our creditors in the position of breaking the law," Mrs Kirk said.
The issue has been a festering sore for National. Having taunted Labour for months over $825,000 of unlawful taxpayer advertising for its pledge card - which Labour has now promised to repay - National MPs have had to endure having their catchcry of "pay it back" turned back on to them.
National's board met yesterday to agree on the proposal. Its release, the day after news broke that Nicky Hager had written a potentially embarrassing book full of revelations about National's inner circles, was pure coincidence, Mrs Kirk said.
"The board wanted to move to resolve the matter as soon as we could. We wanted to do what was morally right and we don't want the outlets to be out of pocket."
Asked what happened if the broadcasters turned the proposal down, Mrs Kirk said she hoped they would find it a good opportunity.
Brent Impey, chief executive of TV3 owner CanWest MediaWorks, said the deal was acceptable to the network and to the Radio Bureau.
Television New Zealand said it was "looking at the proposal with interest" and would comment later in the week. A Sky TV spokesman said the broadcaster was comfortable with the concept, and was awaiting written confirmation from National before making further comment.
Deputy Prime Minister Michael Cullen said National should front up to its mistake, pay the bill, and suffer the consequences of its mistake.
"This deal means National gets off scot-free," he said. "It doesn't change the fact that it broke the law ... At a time when National is mired in allegations about unethical behaviour, I am amazed it chose today to make the GST announcement."
