2005 New Zealand election funding controversy

The 2005 New Zealand election funding controversy occurred in the aftermath of the 2005 New Zealand general election.

Under New Zealand's political system, parties may only spend, during the 90 days before the election, up to a certain amount on campaigning (excluding broadcasting). They must raise that money from their own sources. Other funds are available through The Parliamentary Service to Members of Parliament for "parliamentary purposes", which may include advertising but not "electioneering material". Following the 2005 election, there was widespread debate as most parties had breached either election or parliamentary spending rules in some respect.

Labour and five other political parties were investigated for alleged breaches of election spending rules relating to the 2005 election. The Electoral Commission, the independent body charged with supervising compliance with campaign rules, referred the Labour Party to the police after finding that they had overspent by over $400,000. Labour's election campaign included the production, using Parliamentary Service funds, of a "pledge card". The party had wanted to exclude the $446,000 it spent on the pledge cards from its campaign expenses, but the Electoral Commission ruled the pledge cards should be included. The police found that "there was insufficient evidence to indicate that an offence under s214b of the Electoral Act had been committed." While police considered "there was sufficient evidence to establish a prima facie case" of an offence under section 221 of the act (which requires a party secretary to authorise party advertising in writing), they decided not to lay a prosecution, preferring instead to warn Labour that similar future offences would risk prosecution, because it was not clear that the offence was intentional. They said a number of other parties had also used similar tactics and it would have been unfair to single Labour out.

National was left owing a number of broadcasters $112,500 after spending its broadcasting allowance without accounting for GST. National argued that "due to a misunderstanding between the Party and its advertising booking agency, the agency booked advertising for National on radio and television for the campaign totalling $900,000 excluding GST, instead of $900,000 including GST". Police were not able to attribute responsibility for the mistaken GST over-expenditure to either the NZ National Party or to the Party's media buying agency and did not charge either.

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