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Limits on how much money people spend arguing their view on MMP are needed or people might not trust the outcome and another referendum might be needed, an electoral expert says.
Otago University Professor Andrew Geddis appeared before Parliament's electoral legislation committee to talk about the Electoral Referendum Bill this morning.
Holding the referendum was an election promise from National.
Under the bill voters in the 2011 general election will be asked whether they want to retain MMP and secondly which alternative system they prefer from a list of options.
If the vote is for change a run-off between MMP and the most popular option will be held at the same time as the 2014 general election.
If more than 50 percent of voters opt to retain MMP in the first referendum, the Electoral Commission will undertake a review to consider whether changes to it are needed.
Prof Geddis said while there was no spending cap for the referendum when the country opted for MMP it was needed.
He said there were limits on candidates and parties and the reasons for those were valid.
Various groups had suggested different limits and he gave $750,000 as a ball park figure but said research should be done into what it would cost a major nationwide retailer to advertise its annual sale.
"Find out how much Farmers spends, find out how much Briscoes spends, advertising their year-end Christmas-big sale and allow promoters to spend that much."
There was not enough research to say definitively the impact on large budgets on outcomes.
"I cannot hand on heart say without such limits a big spending individual or group could buy an outcome to the referenda."
However,clearly political parties all thought it worked because they spent large amounts of money. More important was what the public thought.
"People's trust in and acceptance of the electoral outcome depends upon believing that the basic ground rules of the election is fair.
"If it is widely, even if wrongly, believed that election related spending may influence the outcome of the vote and if there should be a significant disparity of spending in favour of the side which actually wins the referenda then the fairness of that outcome will be widely questioned."
How lasting results were would depend on the level of confidence people had in the vote.
Prof Geddis raised other concerns with the legislation including that groups may be able to register as a "promoter" under the bill in a way that people would not know who was involved.
"A group can be set up and shielded so that no information of any value is made public regarding who is actually behind the advertisement."
He said there should be a review of MMP whether there is a vote for change or not.
"The vote in 2014 should be between the preferred option of 2011 and the improved version of MMP."
He said there was also an issue where a voter's ballot was disallowed and whether their referendum ballot would be too.
Right-wing blogger David Farrar said the referendum should be held separately from the election. He said wording needed to be changed so bloggers' free speech was protected.