Every political party mishandles election donations - Peter Dunne

Former MP Peter Dunne claims all New Zealand political parties manipulate election donations in the way the National Party has been accused of.

On Tuesday, former National Party MP Jami-Lee Ross' complaint to the police regarding mishandling of election donations by National was referred to the Serious Fraud Office (SFO) for investigation.

In October last year, Mr Ross went to the police over allegations National leader Simon Bridges was involved in unlawful activity relating to the handling of a $100,000 donation.

Mr Ross claims that donation was broken into smaller amounts to avoid detection from the Electoral Commission.

Mr Dunne, who led United Future during the party's confidence and supply arrangement with the previous National and Labour administrations and was a minister in them, said the rules were very clear about election donations.

"If you donate beyond a certain sum, $10,000 in the case of an individual candidate and somewhat more in the case of a party, you have to disclose it," he told Magic Talk's Drive with Ryan Bridge on Tuesday.

"If you donate, say instead of one $10,000 donation, you make nine or 10 $999 donations, each one of those doesn't have to be disclosed. This is a way of getting around that."

He said such actions were rife among political parties and the SFO's investigation may set a precedent if it decides someone from the National Party did mishandle donations.

"What the Serious Fraud Office is going to test is the validity of that. Every party has done it since time in memoriam, so there will be quite a lot riding on this," said Mr Dunne.

"If the Serious Fraud Office takes the view that that is fraud, that will not affect only the National party but will affect just about every other party as well."

He said it was common across parties but denied willingly conducting the behaviour himself when he was leader of United Future.

"I can honestly say I didn't, but you work out after the event when the disclosures are made, when the record is declared after the election, you can work out financially that there was obviously a series of donations.

"This practice has been more honoured in the breach than anything else, and if the Serious Fraud Office finds that if it is a fraudulent behaviour... that will set the cages rattling amongst all the parties, and it may be no bad thing."

He said splitting donations to gain anonymity could be considered wrong and it was "sinister" if people were doing it to get influence over politicians which could not be scrutinised.

"Is it unethical? I think people would say in some senses yes. But in others cases, there might be very good reasons why they don't want their name disclosed.

"This is going to be a very interesting test case to see how the Serious Fraud Office handles it".

Mr Bridges continued to deny the allegations on Tuesday, saying it was a "matter for the National Party to cooperate with the SFO".

"I've got nothing that concerns me about any of this... I don't think National MPs have anything to worry about. We have nothing to hide. We do want to see swift justice here."

While Mr Dunne said there was "no legal requirement for [a politicians] not to know [the identity of donors]", Newshub's Political Editor Tova O'Brien told The AM Show on Wednesday that Mr Bridges was clearly trying to distance himself from the National Party.

"He came out yesterday and created a gulf between himself and the National Party, saying 'I am completely clear, this has got nothing to do with me, go and ask what those guys have to say'," she said.

"When you are talking about party donations there needs to be an element of church and state between the party and the politicians, especially the political leaders."

O'Brien said it was interesting that all the allegations made by Mr Ross were aimed at Mr Bridges, and now the National leader is trying to put "this all on the National Party".