The Parliamentary Purposes Exemption

I love it when I am proved right.

When I saw the new exemption (from party spending caps) for parliamentary purposes clause in the Electoral Finance Bill last year, I concluded and blogged that Labour were trying to change the law so that their private rules over parliamentary spending would over-ride the Electoral Act. Labour blatantly broke the law in 2005 with its $800,000 of over-spending and they argued to the Police that anything approved by The Parliamentary Service under Speaker’s Guidelines over-rode the Electoral Act.

Never mind that this was against the explicit advice of the electoral agencies, the Parliamentary Service itself and the clearly stated case law from the 1988 Wairarapa Electoral Petition.

But Labour did not want people to know what they were doing. If they didn’t mind, then the Electoral Finance Bill would simply have said:

Any material approved by The Parliamentary Service as an appropriate Party or MP’s parliamentary expense, will not be an election expense.

But what the EFA says in s94(2)(g):

does not include the cost of … any publications that relate to a member of Parliament in his or her capacity as a member of Parliament.

Now the Herald reports that Labour thinks the law is as it wanted it:

The view in Labour that all material with a parliamentary crest should not be attributed as an expense under a spending cap imposed on all parties is not shared by the Electoral Commission.

Acting Prime Minister Michael Cullen yesterday showed his frustration with the Electoral Commission when asked if its view was the same as his towards parliamentary-approved material and election expenses.

“I would advise them perhaps to take clear legal advice because the law is quite clear that where an MP is acting in accordance with their normal duties as a member of Parliament then, in fact, that [material] is not attributable.”

And at this point, I should remind people that they also changed the Public Finance Appropriations Act so all but the most explicit campaign advertisements could be funded by the taxpayer, and as an even better bonus exempt from spending limits. But they knew they could not state it as blatantly as this:

Labour dares not amend the act with a more explicit exemption for parliamentary material because of the potential voter backlash.

Now the Electoral Commission CEO warned publicly before the EFA was passed that the exemption was confusing and unclear. So Labour has no one to blame but itself for the fact that there is great confusion over what the exemption does or does not cover.

Colin Espiner also writes in The Press on the issue:

The law says publications and advertisements are not attributable to party campaign spending limits if they are produced by MPs in “his or her own capacity” as an MP.

The commission is understood to be worried that this could represent a loophole through which parties could use their multi-million-dollar Parliamentary Service budgets to run election advertisements and claim they were the work of individual MPs going about their parliamentary business.

The Commission should be worried, except that this is not a loophole, as in some sort of accidential consequence. It is in fact a very deliberate attempt by the parties who supported the EFA to have the taxpayer funded their campaign, and even better not have it count towards their expenditure limit.

Espiner also reports a useful reminder from Bill English:

English said that any assurances from Labour that it would attribute the money to its spending limit were worth little, as Labour assured the Electoral Commission just before the 2005 election that the $800,000 pledge card would be counted against its expenses and then, two days after the election, reneged.

“Why should we believe any undertaking the Labour Party makes about this?” English said.

Actually the pledge card was only $400,000 – the other $400,000 was other taxpayer funded expenditure. But sadly English is right – the Labour Party General Secretary wrote to the Chief Electoral Office a few days before the 2005 election and agreed the cost of the pledge card would be included as an election expense. Then after the election he wrote again to say he had changed his mind. In my eyes that was enough to move the over spending from an illegal practice to a corrupt practice. But thanks to the Police, we never got to find out if a Judge would have agreed.

Hodgson said the misunderstanding arose because the pledge card was similar to the 1999 and 2002 pledge cards, which had been determined to be within the rules.

Not totally. Yes the Parliamentary Service approved the earlier pledge cards as able to be paid for from their budget. They were wrong to do so, but they did approve them.

But they were never approved or cleared by the electoral authorities as not being a campaign expense. The simple reality is that the electoral authorities never knew that Labour had not been including them in their expense returns previously. The old return forms never asked for individual items to be listed, so there was no way they knew the previous pledge cards had illegally not been included.

Likewise the Auditor-General never was aware that the earlier pledge cards had been paid for out of parliamentary funds. If he had been aware, there is little doubt they too would have been ruled a breach of the Public Finance Act.

So in fact it is highly probable that Labour has broken both the law in every election since 1999. Hence their conclusion that the law had to be changed, rather than they simply start obeying it.