PM: Disputed spending $350m

Helen Clark with the pledge card.

Prime Minister Helen Clark says as much as $350 million spent by all parliamentary political parties over 16 years may be implicated in the Auditor-General's report on unlawful election expenditure - a claim National dismissed as "nonsense".

She sought to distance parties from any blame in the funding row, saying that the dispute, in essence, was between the Auditor-General and the Parliamentary Service - the bureaucracy that administers Parliament. The service works according to the rules set by MPs on the Parliamentary Service Commission.

"No political party sets out to break any rule established by the Parliamentary Service," Helen Clark said yesterday.

"What I am taking exception to ... is any inference that our party set out to break rules. Absolutely not. People set out to work within the rules."

She also firmly backed the concept of transparent state funding of political parties as the best outcome from the debacle.

The Auditor-General has sent party leaders a draft report about taxpayer-funded expenditure by political parties in the three months before the September 2005 election.

National leader Don Brash says he has followed the rules set out in Speaker's Directives of November 2003 and has incurred no liability from his leader's fund.

Other leaders, including Helen Clark with Labour's $446,000 pledge card, have been found in the draft report to have breached Parliament's 2003 spending rules, which prohibit expenditure on material to be used for electioneering.

Dr Brash: "A pledge card circulated to virtually the entire country launched when Labour launched its campaign three or four weeks out from the election itself pledging to do a bunch of things after the election, it is hard to regard that as anything but electioneering."

The Auditor-General cited a Crown Law opinion which quoted from the Speaker's Directive, November 2003, which followed the multiparty review of the rules "and that directive makes it crystal clear that parliamentary funds are not to be used for electioneering".

Helen Clark yesterday dismissed the suggestion that the Speaker's Directives of 2003 should be the starting point, saying the changes made then were minor.

She said the estimate of expenditure approved by the Parliamentary Service was $350 million going back 15 or 16 years.

She produced what she called examples of spending "which in my view go right over the edge".

Newsletters from National list MPs Georgina te Heuheu and Mark Blumsky included a "phony" questionnaire. At the bottom of the page was the statement the information was being collected by the MPs for "electorate and related political activity".

"Neither of these members has an electorate so one assumes the sole purpose is related political activity."

National last week paid the Parliamentary Service $10,588, the total spent against the budgets of seven MPs that the Auditor-General found unlawful.

Helen Clark described it as a "futile gesture". If the object was to "clean up the New Zealand political system", she advised taking a close interest in rules around the funding of political parties.

"I suggest that our system would benefit from more transparent forms of state funding.

"It should be remembered that one of the reasons the National Party is so sanctimonious about the last three months of the election campaign is that it had vast amounts of money from the Exclusive Brethren and very large corporates."

National's deputy leader, Gerry Brownlee, said Helen Clark was doing a good job of confusing the Electoral Act spending rules with Parliament's own spending rules.

It was "nonsense" to dismiss the 2003 directives which Labour's deputy, Michael Cullen, had had a key role in formulating.

Mr Brownlee also pointed to the commission's own principles adopted a month after the Speaker's Directives which said: "Ultimately members are personally responsible for the way they and parliamentary political parties use the public resources entrusted to them."

Today is the last day for MPs to make submissions to Parliamentary Service before it makes submissions back to the Auditor-General.

LABOUR'S PLEDGE CARD SPIN

What party wants you to believe and what really happened:

The spin

The rules allow parties to spend parliamentary funds to promote their policies and no party set out to intentionally break the rules.

What really happened

Parliament's rules state parties can only spend such money on advertising of an informational nature relating to "parliamentary business".

The rules expressly ban "producing or distributing promotional or electioneering material".

Labour's pledge card and an accompanying brochure were delivered to households nationwide in the final weeks of last year's election campaign. Auditor-General Kevin Brady had already expressed concern before then that much parliamentary party publicity was of a highly political nature and warned of the implications of distributing it just prior to an election. "Even if the publicity and advertising is for clear parliamentary purposes, there is undoubtedly significant potential for collateral party political benefit."

He has since ruled public money should not have been spent on the pledge card.

The spin

The Auditor-General is changing the rules for the game after it is over. Labour only did what it had done in 2002 and in the election before that.

The line he is now taking means millions of dollars of party advertising dating back many elections was also unlawful.

What really happened

Brady's report is concerned with the spending in the three months prior to the 2005 election.

Parliament's rules covering such spending were rewritten in 2003 and carried the authority of Speaker's Directions.

They were reinforced through insertion in the Members' Handbook of Services, which outlines MPs' responsibilities.

They were backed up by guidelines issued by the Parliamentary Service Commission, the multi-party body which runs Parliament.

Those initiatives followed Green Party complaints about NZ First advertising during the 2002 election.

The rewrite of the rules applied to the 2005 election.

What happened prior to 2003 is not relevant to what happened in 2005.

The spin

This is really a dispute between the Auditor-General and officials from the Parliamentary Service who okayed the spending on the pledge card - not the politicians.

What really happened

In late 2003, the Parliamentary Service Commission, made up of MPs, adopted a set of principles to govern advertising paid for out of the Parliamentary Service budget.

The principles expressly state MPs are "personally responsible" for the way they and their parties use public money and that the responsibility "cannot be avoided".