"Corrupt" New Zealand government to repay $768,000

The New Zealand Labour Party today joined National, the Greens, ACT and the Maori Party in saying they would pay back the money received from Parliamentary Services that the Auditor-General says was wrongly used for electioneering.

The Auditor-General report, tabled today, found $1.17 million of taxpayer-funded parliamentary funding was misspent over all political parties. Labour was found to have overspent $768,000.

The Prime Minister is adamant the Labour Party did not break any rules, but she is still going to pay back money spent unlawfully in the lead up to the election.

Labour "strongly maintains" that its spending was within the rules as they were understood but given the new ruling it would refund the money.

"Labour has strongly stated its case as was its right...The party welcomes the Auditor-General's findings that inadequate guidance has been available to MPs and parliamentary parties on what constitutes appropriate advertising, particular in the pre-election period." Clark said.

The Government will now follow through with plans to pass retrospective legislation on election spending. Deputy Prime Minister and finance minister, Dr Michael Cullen says legislation will be introduced into Parliament next week to validate spending by parties dating back some years.

He argues the only legal remedy for the breaches identified by the Auditor General is for them to be validated by an act of Parliament.

Meanwhile National Leader Dr Don Brash is viewing the Auditor General's report on election overspending as a victory for National.

Dr Brash says it is only public, political and media pressure that is making the Prime Minister repay the money that Labour spent.

He claims she led a dirty campaign punctuated by threats, bullying and diversionary tactics, and he says she is clearly paying the money back with great reluctance.

Dr Brash says the Prime Minister should also apologise to the Auditor General, as she bullied him publicly to try to get him to change his report.

Dr Brash said it had taken a year to persuade Labour to "admit its guilt".

"I am delighted they have finally done it... after trying every trick known."