KEY POINTS:
National's Bill English says that after six months, the Electoral Finance Act has been "even worse than we expected".
It was complicated and created uncertainty and more bureaucracy.
"The worst of it is that is has had a freezing effect on the expression of political opinion in election year."
But Justice Minister Annette King defends the act, saying it has made all political parties "take stock of what they do, and I think that is not a bad thing.
"People have to be transparent about what money they are spending and where they get it from and how they are spending it, and that was the intention of the bill."
Mr English led National's opposition to the law and in his bid to highlight its potential absurdities, he has rarely been short of material in question time each week.
Yesterday he highlighted Labour's post-Budget leaflet - the one featuring the American family. He has referred it to the Electoral Commission, in an attempt to show that the law should require the Labour leader's office, which paid for the leaflet, to be registered as a third party.
Others have suggested the funding of the leaflet should be classed as a donation to the Labour Party because it is not funded by the Labour Party.
If the Electoral Commission deemed the Labour-affiliated Engineering Printing and Manufacturing Union could not be registered as a third party, it would show the law to be absurd, Mr English said.
The Electoral Commission is due to release several decisions in the next few days but the EPMU one will not be among them .
That decision will make the difference between the union campaigning as a third party with a $120,000 cap or not as a third party with a $12,000 cap.
The commission will give more thought to that decision at its next meeting on July 29.
The Electoral Finance Act was Labour's response to a $1.2 million covert campaign last election by the Exclusive Brethren to support National and to National's billboard campaign which began well before the former three-month period for regulated election advertising - now it starts on January 1 of election year.
Mr English last night conceded that the act had made MPs a lot more cautious about how they used taxpayers' money at Parliament but "it essentially prevents MPs from publishing anything political".
"Trying to restrict the political opinions of non-politicians is hazardous is bad in principle and has turned out to be very difficult to do in law."
Parliament now approves and funds material for publication that is authorised as an election advertisement - to protect parties from prosecution if the material they produce out of Parliament is also deemed to be an election advertisement, such as Labour's post-Budget leaflet.
That is a consequence of Parliament passing two laws within weeks of each other that had vastly different treatment of election advertising - one for MPs that allowed them to produce virtually any advertisement so long as it didn't solicit votes; and one for everyone under the Electoral Finance Act that broadened the definition of election advertising.
Ms King said National's opposition was posturing because there was nothing stopping it or any party or third party campaigning right now, if they followed the right procedures.
"There is absolutely no impediment to the National Party for example putting up billboards that said 'Iwi Kiwi' now."
The fact that National was not campaigning had shown what it had intended to do had the law not been changed.
"That was to spend whatever millions they could up to three months before the election, saying that has no influence at all, and then in the three months before the election spend the allocated amount for political parties [maximum $2.4 million]."
She had heard National had a war chest of about $5 million - which would mean National could have spent more than the maximum, $2.6 million, outside the regulated period.
That would have made "absolute nonsense of democracy and freedom of speech."
Ms King believed there would be have been similar difficulties as there are now if the letter of the law had been applied previously.
The Electoral Commission, which has oversight of party advertising, has met almost monthly since January compared to the quarterly meetings it used to hold.
Chief executive Helena Catt said it would have had about 10 times to contend with during the old regulated period of three months whereas it had already dealt with closer to 100 items, combined with the Chief Electoral Office which handles candidates' advertising. The commission was having to develop processes at the same time it was building-up its interpretive base.
