PM John Key describes David Cunliffe's Labour leadership as a "shipwreck and a trainwreck" after Cunliffe admits should have disclosed donations

By Bernard Hickey

Prime Minister John Key has described David Cunliffe's leadership of the Labour Party as a "trainwreck and a shipwreck" after Cunliffe was forced to admit he should not have set up a trust last year to keep the identities of the funders of his leadership bid secret.

Earlier Cunliffe said he would apologise to his caucus and he identified three of the five donors.

Key taunted Cunliffe throughout Parliamentary question time about Cunliffe's initial decision to set up the trust and the subsequent criticism over the Labour MP's transparency.

"I'm interested that the leader of the Opposition is talking about shipwrecks at the moment because I wouldn't have thought he'd be worried about the Rena. It's his own leadership that's a shipwreck at the moment!" Key said. Cunliffe had asked about the fate of the Rena shipwreck near Mount Maunganui.

He taunted Cunliffe about being upfront and transparent about who had donated to Cunliffe's Labour leadership bid fund.

"Mr Speaker, it's about trust, or trusts as the case may be David," Key said to Cunliffe, who was relatively subdued through question time.

"I'm interested to see that the leader of the Opposition thinks that the biggest issue facing New Zealand at the moment is whether there's a shipwreck at the bottom of the ocean, rather than a shipwreck going on in the Labour Party caucus!"

Later in question time after a question about asbestos being found on KiwiRail engines

"It is absolutely fascinating that the leader of the Opposition has focused on trainwrecks and shipwrecks. Doesn't that sum up his week so far."

'Lapse of judgement'

Earlier Cunliffe had admitted to reporters before a parliamentary caucus meeting that he made a "lapse of judgement" by setting up the blind trust to accept donations.

He read a prepared statement saying a trust set up last year to fund his Labour leadership campaign complied with party rules and the parliamentary pecuniary interest register, but "did not fully represent" the values he would like to bring to the leadership."

He denied that the trust was set up to avoid disclosing donations to the Register of Pecuniary Interests, saying "it was to give donors a higher level of confidentiality and also to keep me removed from the detail (of who had donated)."

Cunliffe has gone back to the five anonymous donors who contributed to the fund, asking them to waive confidentiality in the interests of transparency.

Two donors, who contributed NZ$8,300 between them, wanted to remain anonymous, he said. Their donations would be returned and, if this left the trust in deficit, Cunliffe said he would make up any shortfall from his own pocket.

"We have all learned from this experience," said Cunliffe.

"For a start the Labour party's internal rules do not align well with the pecuniary interest rules and I think there is a general sense that the use of trusts is now not meeting the requirements of transparency," he said.

He said spending on his leadership campaign "would have been in the order of $20,000 odd.

"If we are rescinding donations the trust may be in deficit and I will be making that good because the buck stops with me."

Three donors, businessman Selwyn Pellett, longtime friend Perry Keenan and Labour party supporter Tony Gibbs, contributed NZ$9,500 between them and were prepared to be identified.

Family trust details

Questioned about his connection to other trusts, Cunliffe said he was beneficiary of the Bozzie Family Trust "and a bare trust called ICSL which does savings and investments." The Bozzie Family Trust (which he said was named after a family pet), owned his family home and had been declared to the pecuniary interests register. "It's standard," he said.

"My wife is a lawyer and most lawyers have their houses in trust as a matter of protection from liability."

Key questioned Cunliffe's decision not to reveal the names of the two anonymous donors when speaking to reporters before question time.

“Why is he going to such lengths to protect two people, claiming he doesn’t know who they are, but at the same time claiming he’s going to repay money to people that he says he doesn’t know who they are?," Key said.

Key told reporters before National's caucus meeting that despite recent strong poll showings National was unlikely to be able to govern alone and would have to find coalition partners. See Lynn Grieveson's article here.

Meanwhile, Labour's Associate ICT (Information Communication and Technology) spokeswoman Clare Curran was forced to release a document publicly that was titled 'ICT Policy Framework for 2014' after it was accidentally sent to the National Government's Communications and Information Technology Minister Amy Adams.

Labour's ICT Spokesman is David Cunliffe.

The Clark Labour Government changed electoral laws in 2007 to restrict political donations from third parties such as trusts. The law was repealed in 2009.

(Updated with details of Curran email snafu, Labour's history on electoral donations)