Stolen Chinese money likely spent on Auckland property - Little

There are claims corrupt Chinese money could be flowing into the booming Auckland property market as well as the coffers of political parties.

Labour claims money from Chinese economic fugitives is making its way into the New Zealand property market. Source: 1 NEWS

Labour's leader, Andrew Little, says he turned down a handsome donation when he was party president because he couldn't be sure if the Chinese donor was legitimate.

Auckland's booming housing market seems a logical place for Chinese fugitives to launder dirty money, as far as Labour is concerned.

"You'd probably have to say it is likely that at least some of that money has made its way to the Auckland property market," Mr Little told reporters.

The Chinese President claims former Chinese officials are holed up in New Zealand with millions in stolen cash.

And Finance Minister Bill English concedes some could end up in property, telling journalists, "Oh well, it's quite possible."

But when pushed on a whether a foreign buyers register might help quantify the problem, Mr English sprung a surprise, revealing officials had been working on a register, despite the Government having signalled little need for one.

"I gather there is some [work] going on," he said.

Land Information Minister Louise Upston said: "There's been a number of questions I've asked over the last couple months. So they've been just doing some preliminary work."

That's not quite how their boss sees it, Prime Minister John Key saying: "Land Information might be looking at the broader issue. But far as I'm aware they're not working on a register."

Labour's seizing on the mixed messages about a register.

"One minute they're saying its racist and xenophobic, the next minute they're open to it," said Phil Twyford, Labour's Housing spokesman.

Meanwhile, the spectre of dirty Chinese money may also extend to political party donations.

Mr Little says he turned down money from Chinese donors when he was Labour's party president.

"I wasn't satisfied about the origins of their funds. I had a hunch that it wasn't appropriate to accept them and we didn't accept them," he said.

National Party President Peter Goodfellow admits corrupt money could have also come its way but says it has little way of vetting where donations come from.