2005 New Zealand Election Funding Controversy - Auditor-General Report

Auditor-General Report

The Auditor-General investigated publicly funded party advertising for the 2005 election, with a preliminary finding that much of the spending was unlawful being leaked. A final report was released on 12 October 2006. It found that $1.17 million had been improperly spent, as follows:

• Labour Party: $768,000
• New Zealand First $150,400
• Green Party $80,900
• United Future $63,800
• Act $17,800
• National Party $11,300
• Maori Party $48

After a draft of the Auditor-General's report was leaked, the National Party repaid the amount that the report said was spent by it unlawfully. Labour strategist Pete Hodgson said on 13 September 2006 that his party would not be repaying any money, and the Government might introduce legislation to legalise the spending.

The Speaker of the House, who has responsibility for the Parliamentary Service, sought a legal opinion in response to the Auditor General's report. While she did not agree with the legal analysis of the Auditor General, the Speaker, Margaret Wilson, recommended that legislation be passed to retrospectively validate expenditure, that parties should pay back their overspending, not as a legal obligation, but in order to maintain the confidence of the public, that the administrative processes of Parliamentary Services should be reviewed, and that legislation be developed to clarify the law on expenditure.

The Labour Party announced immediately after the report was published that it would repay the money it owed. Helen Clark said "Labour strongly maintains that it spent its parliamentary budget within the rules as they were understood at the time, and in the same way as other parties have over a long period of time. Given the Auditor-General’s new ruling, however, Labour will refund the spending identified".