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National confirms GST error in broadcast spend

Media Release
New Zealand National Party

6 December 2005

National confirms GST error in broadcast spend

The National Party today confirmed it made an error in the booking of its broadcast radio and television advertising for the 2005 election campaign.

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, as had been allocated by the Electoral Commission.

National discovered the error when it was reconciling invoices received for August and September (the two periods for which campaign advertising was permitted) prior to sending the September invoice on to the Commission for payment. The Party advised the Commission immediately and has since been working with it to resolve the issue.

“It was a genuine error that came about as a result of a misunderstanding between the two organisations,” National Party Campaign Manager Steven Joyce said.

“We believed we had told the booking agency that the amount included GST, and they assumed it was exclusive of GST. Unfortunately we don’t have anything in writing between us confirming the amount including GST.

“Commercial organisations generally work on an “excluding GST” basis but political numbers are calculated inclusive of GST. Unfortunately we didn’t pick up the error until it was too late to correct it.”

President Judy Kirk said the Party took responsibility for the mistake. “Of course we wish it hadn’t happened but it has. Unfortunately the mistake cannot be undone. We are working with the Commission to deal with the issue,” she said. “We would of course be prepared to pay the GST amount to the affected broadcasters, but under the Act we are not permitted to do so”.

The error is not an Electoral Act matter and does not affect the election results. The allocation of radio and television advertising funds is determined under the Broadcasting Act, which provides for a possible fine if any Party is found to be in breach of the Act.

Parties are given a taxpayer-funded allocation for advertising for each General Election. For the 2005 election the National Party was allocated $900,000 by the Electoral Commission, while the Labour Party was allocated $1.1million. All figures include GST.

ENDS

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