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THE NSW Liberals have been referred to electoral authorities and police after Labor claimed they breached electoral laws by “underclaiming” staff costs during this year’s election campaign.

With caps imposed on how much parties can spend on a state campaign, the Liberals this week only declared $8300 in staff costs compared to Labor’s admission of spending $961,381.08 on staff; the Nationals’ $424,137 and the Greens’ $438,767. The Liberals have denied any wrongdoing.

Labor has alleged the Liberals underestimated the staff cost in order to claim they did not breach their election spending cap under political donations laws, passed last year. The alleged underspend emerged when electoral returns were released on Monday.

Knowingly making a false disclosure carries a penalty of up to a year in jail.

Under the cap, the Liberals were only allowed to spend $100,000 per lower house seat they ran for (which was 73 seats, or a cap of $7.3 million) from January 1 to March 26. The Liberals, even with allegedly failing to properly declare staff, have admitted spending $8.1 million on the year in question but can claim some of the spending occurred before January 1.

Last night, Election Funding Authority director Brian DeCelis confirmed some parts of the act were a grey area, saying “the disclosure may well look to go over the cap for election expenditure” but it may not have.

A letter from Labor’s general secretary Sam Dastyari to Electoral Commissioner Colin Barry and Police Commissioner Andrew Scipione says an investigation is warranted.

Mr Dastyari also claimed the Liberals won Oatley, East Hills and Swansea by less than 1000 votes which Labor could have won except for the overspend.

Liberals state director Mark Neeham claimed yesterday that he was acting on verbal advice from the Electoral Commission when he did not declare permanent Liberal head office staff on the declaration.

He said he had declared all permanent staff costs on the party’s separate administration return and only put temporary staff on the campaign staff costs of the election return.

He said he could not speak for why the other parties had done differently and said he was “absolutely” confident that the party had not breached the cap.