'We won't repay,' says Hodgson as Labour hits back at auditor

Pete Hodgson

Labour strategist Pete Hodgson says his party will not repay any taxpayer money unlawfully spent on its election pledge card.

His statement yesterday was the first time a senior member of the party has said it has no intention of paying any money back.

And Prime Minister Helen Clark accused Auditor-General Kevin Brady of unfairly changing the rules.

"The Labour Party considers it neither fair nor a process of natural justice to change the rules after the event," she said yesterday

She believed the Auditor-General had a problem with the rules.

They say no MP or party can spend parliamentary money on advertising if it is "party political, promotional or electioneering material for the purpose of supporting the election of any person or party".

Mr Brady has found most parties breached this rule.

Among the breaches cited is the spending of $446,000 on Labour's pledge card.

Until now, Helen Clark and her deputy Michael Cullen have said they would wait until Mr Brady's final report was completed before deciding what to do.

Dr Cullen said the Auditor-General was wrong. He believed the Treasury would want him to pass retrospective legislation to validate any spending deemed unlawful under the Public Finance Act.

Their comments were made before further expected leaks of the newly written report which the Auditor-General has given to the Parliamentary Service.

National leader Don Brash asked in Parliament what the point of the Auditor-General's report would be if Labour had made up its mind to ignore it.

Mr Hodgson gave several reasons for not paying back the money.

He said the expenditure was approved before the Auditor-General's draft finding.

"We had no way of knowing the rules were going to change."

And he said there had been almost no change in the rules between the 2002 election and last year's election, implying that what had been acceptable in one should be acceptable in the other.

But the rules were reviewed after the 2002 election because there had been concern about the use of parliamentary money for electioneering - mainly by National.

Previously the spending rules applied only to MPs; after the changes between elections they applied to political parties as well.

Parties were also required to put the parliamentary crest on material.

A new rule headed "Responsibility for information" was also passed stating that parties and not the Parliamentary Service had to take responsibility for the content of material.

Labour claims that the changes were minimal.

National deputy leader Gerry Brownlee told Parliament all parties agreed to the rules and to stick to them.

He said National would today ask the Parliamentary Service Commission to release minutes of its meetings to show that agreement.