KEY POINTS:
Labour will have to include the costs of a taxpayer-funded leaflet in its election spending after an embarrassing Electoral Commission ruling that it was an election advertisement.
The brochure - titled "A fair economy for a strong future" - was paid for by the Prime Minister's office and bore an authorising statement from the party's financial agent, Mike Smith.
It promoted Budget initiatives and became controversial because the photo on the front was of an American family bought from a stock photos website.
The commission said the leaflet did not breach the Electoral Finance Act, because of the authorising statement, but said it was an election ad, meaning Labour will have to deduct its cost from the party's $2.4 million spending cap.
The leaflet does not breach Parliament's spending rules, which were liberalised to cover MPs' spending unless it is direct electioneering.
But it opens Labour to further criticism for spending public money on its election campaigns.
National deputy leader Bill English said it was Pledge Card Part II.
"We are opposed to the use of taxpayer funds for partisan election advertising, but then it's nothing new for Labour," he said.
The Prime Minister has previously refused to release costings, say how widely the leaflet was distributed or whether it would be included in the party's election expenses.
Yesterday she would not comment on the commission's decision.
Labour had to pay back $824,000 in unlawful expenditure from the public purse in the 2005 election, including more than $400,000 on its pledge card.
The Government later changed the law to make such spending lawful retrospectively, a provision that was carried over to this election.
Meanwhile, Progressives leader Jim Anderton has suggested some "common sense" might be needed after the commission referred one of his ads to the police to decide if it should be prosecuted for breaching the Electoral Finance Act.
The Progressives' ad was paid for out of Mr Anderton's parliamentary budget and concerned a law change to classify BZP as a class-A drug.
The commission said it was an election ad because it included a party election slogan but did not have the proper authorising statement.
The decision means all four parties that supported the controversial electoral law changes last year have now fallen foul of the tight new rules on election advertising - mostly for not carrying authorising statements.
Mr Anderton was a vocal supporter of the new law after he was targeted in one of the Exclusive Brethren campaigns before the 2005 election.
"I thought the EFA would stop anonymous, devious advertising, and I still think we should protect ourselves.
"But to be reported to the police for putting my name all over something when I'm not trying to hide anything? There's got to be a certain amount of common sense applied here."
He said he had not believed it was an election advertisement because it was about a law change made in his area as associate health minister.
Other decisions:
A taxpayer-funded NZ First newspaper advertisement opposing the China free trade agreement was not an election advertisement "by a close, but distinguishable margin".
The Electoral Commission said the ad stated party policy on an issue at that time, rather than hinging on the election. The commission has asked police to investigate a reported case of apparent push-polling after a member of the public reported being phoned for a "purported survey" which included arguments for and against support of political parties.
The PPTA's "How dense do you want them?" billboards, advocating smaller class sizes, was "not presently" an election advertisement.
However, the commission made it clear the ad's status could change if political parties began to campaign on smaller class sizes in the build-up to the election.
PPTA president Robin Duff said it would be "ludicrous" if the union was caught by the act for its everyday work of lobbying for better education outcomes. "Campaigning for better conditions for teachers and students is part of the PPTA's core business. There is no way that should have to grind to a halt because it is an election year."
A National Party van funded by the Parliamentary Service and used by its Wellington-based MPs was not an election advertisement. The decision follows the Chief Electoral Officer's notice to Labour MP Trevor Mallard that his van was an election advertisement and needed an authorising statement. Mr Mallard's van was painted red and had "Labour" in large letters on the bonnet and "Trevor Mallard" on the rear. Neither the commission nor the Chief Electoral Officer would comment on the reasons for the different rulings.
New Zealand First and the Greens were cleared for filing late donation returns after the commission decided they had reasonable excuse for doing so.
