David Farrar has given his usual intelligent and considered response to Labour’s submission on electoral finance at Kiwiblog.
The only thing I want to add is a very loud no to Labour’s self-serving and unprincipled suggestion that the taxpayer should fund poltical parties.
We have a very low hurdle for registration as a political party – just 500 members. The idea that any other organisation with as few members as that and as little accountability as most poltical parties have would get taxpayer funding as of right would never be countenanced and there is no reason why political parties should be treated differently.
Democracy is supposed to be of the people, for the people by the people not of a party, by the taxpayer for a few political groupies.
The Orange Man puts it succinctly at No Minister.

No, no and thrice no.
Too much power has already been vested in political party machines by the MMP electoral system which allows unelectable party hacks to squeezed into Parliament via the list vote. This would be another retrograde step.
State funding of political parties is a complete no no.Any political party worth its salt gets out there to fundraise and ensure a political infrastructure.It always appeals to left wing groups where under the protection of government they can spread their tentacles.
Labour and the Greens always support this idea because they are not good at fund raising as well as getting volunteers over the whole country.
Above all, state funding can also mean state control.