More on Ministerial Accommodation
September 9th, 2009 at 8:58 am by David FarrarThe Herald looks at the winners and losers, with Phil Heatley the biggest “loser” as his current accommodation costs almost $16,000 a year more than the new allowance.
The Dom Post queries Bill English’s arrangements again:
Finance Minister Bill English qualified for a $700-a-week rent payment from taxpayers after signing a declaration that he had no financial interest in the trust which owned his family home.
It has been revealed that officials took concerns to the prime minister’s office about whether Mr English qualified for the payment, which is double the amount he was entitled to as an ordinary MP.
But documents issued under the Official Information Act show they were told it would be okay as long as Mr English certified that he had no financial interest in the Endeavour Trust, which owns his $1.2 million Karori property.
My understanding is that Bill English is a trustee of the Endeavour Trust, but he is not a beneficiary.
The situation with trusts and parliamentary accommodation is not unique to English. Most Green Party MPs live in houses owned by their superannuation fund. This mean they can claim the full rental amount, rather than merely interest on the mortgage.
Having changed the Ministerial rules, I wonder if the parliamentary rules will also be reviewed.
And the Dom Post editorial does not like the new system:
His new regime for ministerial accommodation allowance fails because, while it is transparent, it is not independent. …
The public can have little faith in a review of a system by those who are its beneficiaries.
There should instead be an independent examination of ministerial, MPs’ and ex-MPs’ extensive array of allowances.
It should produce a comprehensive list of what should continue, and what should not, and what rules are needed to stop rorts.
Then the public could have a little more faith in what was decided. Asking ministers and MPs to set the rules smacks too much of asking the foxes to guard the henhouse.
This is not a bad suggestion and pretty much what was proposed in 2003 – hand it all over to a body such as the Remuneration Authority.
Related posts:
- Auditor-General on English
- New Ministerial Housing Rules
- Ministerial credit cards
- Auditor-General on Ministerial Services
September 9th, 2009 at 9:02 am
“..My understanding is that Bill English is a trustee of the Endeavour Trust, but he is not a beneficiary…”
oh..!..that’s ok then..!
sorry we even asked..!
eh..?
phil(whoar.co.nz)
Vote:September 9th, 2009 at 9:06 am
“but he is not a beneficiary”
but not in the context you’re used to
Vote:September 9th, 2009 at 9:08 am
An independent review is a great idea but I don’t know that I would call the Remuneration Authority independent. Call me Mr cynical if you will.
Vote:September 9th, 2009 at 9:10 am
“Bill English is a trustee of the Endeavour Trust, but he is not a beneficiary.”
Legally maybe. Are his family beneficiaries? Do benefits they get from the trust substitute what Bill English may otherwise give them if they didn’t use a trust to “arrange their affairs”?
I don’t see much chance of the trust situation being sorted if many politicians use them to their advantage – whoops, sorry, to their family’s advantage.
Vote:September 9th, 2009 at 9:13 am
The bill english thing sounds dodgy to me.
According to the suff website, English signed a declaration that he had no financial interest in the Endeavour trust.
But, the trust owns the home he lives in. Surely this means he has financial interest in the trust.
Lets just say, the house burnt down and was uninsured. Do you think Bill English would be financially uninterested in such an event?
Vote:September 9th, 2009 at 9:17 am
Financial interest is a legal term. If you’re not a beneficiary you don’t have financial interest. Why the outrage at Bill English when the Greens are doing the exact same thing? Why no outrage at them? How many Labour MPs or previous Ministers had rental property in Wellington?
As for the Dom Post, is there any analysis of the outcome necessary, or do they just take pot shots at the process? Surely they can stir a few brain cells and work out whether the proposed outcome is reasonable, rather than focusing on who proposed it. But I suppose that’s about what we can expect from lefty media.
Vote:September 9th, 2009 at 9:18 am
And Key must now decide where his primary place of residence is. Bit more on Red Alert from last night.
Vote:September 9th, 2009 at 9:25 am
you’re right PaulL, the Greens are in a far more questionable position
Vote:September 9th, 2009 at 9:26 am
“Financial interest is a legal term. If you’re not a beneficiary you don’t have financial interest. ”
But this isn’t just about legal terms is it? It is also about the moral obligations of our lawmakers. Especially of finance ministers pushing for cutting government spending. But also for Greens or any other MPs. Maybe they don’t care so much about reducing tax rates because they have worked their own ways around paying full rates.
Vote:September 9th, 2009 at 9:34 am
DPF, last time I asked about it, the only property the Green Futures superannuation fund owned in central Wellington were one house and one one bedroom apartment. If “[m]ost Green Party MPs live in houses owned by their superannuation fund” it must be pretty cramped.
And the Green Futures super fund owning property that is rented to MPs for which they claim an accommodation allowance is nothing like what English has done. The property owned by the Green super fund would be tenanted anyway, regardless of whether MPs were the tenanats; and if the MPs who live in them were renting somewhere else, they would be claiming the accommodation allowance for that. So there is no financial advantage for either the MPs or for the super fund. The only possible advantage for the fund is that there is a guaranteed tenancy for three years unless an MP tenant resigns, dies, or decides to live somewhere else.
English, however, was listed as having a beneficial interest in the Endeavour Trust which owns his Wellington home in 2008, but changed the arrangement so he no longer has a beneficial interest. His name was on the title last year, but was removed in March of this year. “Coincidentally”, this change of circumstances qualified him for the larger accommodation allowance he claimed. And all that is aside from the issue of whether he is entitled to claim as an out of Wellington MP anyway.
Oh, and by my calculations under John Key’s proposal he will get back $13,500 of the additional allowance that he agreed to relinquish when the rort was first exposed.
Vote:September 9th, 2009 at 9:42 am
“Green Futures superannuation fund owned in central Wellington were one house and one one bedroom apartment”
Toad – does your ‘central’ mean the CBD?
Vote:September 9th, 2009 at 9:45 am
I know perfectly well that financial interest is a legal term.
However, is Bill English using loopholes to exploit the rules? Thats what I suspect. And, morally, that would be wrong, but whats morals between a few pollies?
Anyone else who does this are also guilty. Greens included.
Vote:September 9th, 2009 at 9:46 am
Trevor – regarding the comment you edited – the fact that English personally paid back the allowance has nothing to do with whether the trust received rent.
Toad – if English wasn’t living in the house the Endeavour Trust owns in Wellington, it would be rented and someone else would live in it. The rent would be higher than the rent the trust currently receives. And he would be renting somewhere else, and receiving a higher accommodation allowance for that. The situation is similar to that you claim for the Green’s, except that in English’s case, the current arrangements are costing the Endeavour Trust money and saving the government money. You know this and yet you continue to claim the situations are different. Why is that?
Vote:September 9th, 2009 at 9:52 am
Patrick, I’m not privy to all the detail but am fairly sure it owns only two residential properties anywhere in Wellington.
Vote:September 9th, 2009 at 10:03 am
PaulL, the difference is that English and the Endeavour Trust altered their circumstances and those altered circumstances allowed him to claim a higher accommodation allowance as a Minister than that he would otherwise have received (and the Green MPs receive).
The other, arguable, difference is whether, given that his wife has a long established medical practice in Wellington, his children go to school in Wellington, and his company return lists his residential address as Wellington, he is entitled to any accommodation allowance at all as an “out of Wellington” MP.
Vote:September 9th, 2009 at 10:17 am
Toad
You seem to be very keen to squash this story, what is it that you do not want the press to find out about the Greens little housing rort?
Vote:September 9th, 2009 at 10:33 am
“squash this story” == “answering questions on Kiwiblog” ?
Vote:September 9th, 2009 at 10:35 am
I wonder if Bill English will continue to pay rent to the trust when he retires?
Vote:September 9th, 2009 at 10:52 am
Toad, you bloody well know (or should do considering your descriptions of your past) that the Title lists the names of trustees as a trust is not a legal entity in its own right and therefore cannot “own property” in the trditional sense. The property is held by the trustees “in trust” for the beneficiaries. So it is not surprising that Bill English’s name was on the Title. So you are either being wilfully mischevious or woefully ignorant to imply otherwise.
Vote:September 9th, 2009 at 10:54 am
And BTW has anyone noticed that if rent was paid to the Trust, it would be taxable in the hands of teh trust which immediately discounts the rent by 33%.?
Vote:September 9th, 2009 at 11:07 am
david, you are seeking to misdirect, methinks. The main issue in that regard is not the name on the title or whether English is a trustee – it is that English was registered as a beneficiary of the trust in 2008, but not in 2009, and that change just happens to coincide with his application for the additional accommodation allowance.
Vote:September 9th, 2009 at 11:22 am
Your point is what toad? That someone structured their financial affairs so as to conform with the requirements of the policy? Well, shit, thanks for the captain obvious observation. And the fact that the Greens have structured their affairs so that their super fund can rent property to the taxpayer – both in Wellington for accommodation, and in the regions for party offices and the like? As have the Labour party with many electorate offices? Once again, captain obvious observation that parties would do that.
My question is – is it a problem? The rent was going to be paid to someone. The fact that an MP decides “hey, I’m a pretty good tenant – why let someone else rent to me when I can rent to myself” I don’t personally see as a problem. It gives them an incentive to actually be a good tenant, and there is no money being spent by the government that wasn’t going to be spent anyway. We’re just pruriently sticking our noses into someone else’s financial situation because we think it makes good politics. But, given that all we achieve is costing them some money and security but no actual saving in expenditure for government, why are we all so interested.
I’m strongly supportive of the new scheme suggested by parliament, that we give them a flat rate of money and they do what they damn well want with it – live in a caravan in Petone and pocket the difference for all I care. Surely there is something that is relevant to NZ that we could talk about instead?
Vote:September 9th, 2009 at 11:27 am
it’s ok that english isn’t a benificiary of that trust..
cos’ he’s got seven superannuation plans to fall back on..eh..?
count them…!
seven..!
it’s all a ‘tax’ thingy..eh..?
phil(whoar.co.nz)
Vote:September 9th, 2009 at 11:46 am
Apart from the transfer of “tax” on your benefit from WINZ to the IRD, and the GST you pay on purchases, what the fuck would you know about paying taxes phil?
Vote:September 9th, 2009 at 3:55 pm
Apart from a small minority (charities etc), every trust existing in this country has been created for the purpose of (a) avoiding fair tax (b) minimising fair govt recovery of rest home costs (c) minimising personal income to claim excess govt benefits (d) preventing ethical allocation of funds to business creditors and spouses/partners in a business or relationship collapse. All of these are about dipping unethically into the public, or other peoples purses just like the Bill English example. Our society might be better off without trusts altogether…
Vote:September 9th, 2009 at 6:29 pm
Hmm, another take on Bill English’s expenses, give Idiot/Savant’s contribution today.
I wouldn’t go as far as he has in labeling it as “fraud” – at least yet. But I do think it needs some further investigation.
Vote:September 10th, 2009 at 6:36 am
So has English has misled Key?
http://www.stuff.co.nz/national/politics/2849457/PM-defends-English-home-vow
PM defends English home vow
By TRACY WATKINS – The Dominion Post
Last updated 05:00 10/09/2009
Prime Minister John Key is standing by deputy Bill English as questions mount over the way he qualified for a $700-a-week accommodation perk.
Mr Key revealed yesterday that he had received assurances from Mr English that his affairs had not been rearranged in order to qualify for the weekly rental, which is about double what he received as a backbencher.
“He’s given me an assurance that’s not the case and I accept him at his word,” Mr Key said.
The assurance was given about the time that officials brought questions to Mr Key’s office over whether Mr English could have his rent paid while remaining in his family home, which he bought with wife Mary in 2003.
In March this year, the title on the $1.2 million Karori property was transferred to his wife alone. Ministerial Services leased the property through a family trust, the Endeavour Trust. Mr English signed a declaration in February that he had no beneficial interest in the Endeavour Trust.
Mr Key confirmed that Mr English’s situation had been brought to his attention after officials raised it with his office, though “not immediately”.
“The advice I was given was that he fully complied with all the rules that were required to be met.”
Asked if it was credible that Mr English had no pecuniary interest in the house he had lived in with his family since 2003, Mr Key responded: “That’s the legal test and that’s absolutely correct.”Mr English declared a beneficial interest in the Endeavour Trust in the 2008 register of pecuniary interests, but he has since confirmed changes in the trustee arrangements for “personal and family reasons”. He has given an assurance that the change was not related to qualifying for parliamentary allowances and was done while he was an opposition MP.
A spokesman said yesterday that Mr English “absolutely” stood by that assurance. He said Mr English would not answer further questions.
Labour MP Trevor Mallard said yesterday that Mr English should explain what those personal reasons were. He offered an opportunity for Mr English to give him a confidential briefing to lay the matter to rest. Otherwise, questions would remain over whether the arrangement was a rort, he said.
“That’s what it looks like. It looks like a rort. It looks like a device to improve his family’s financial situation by removing himself as a trustee.”
Documents made available under the Official Information Act show that ministers are entitled to up to $700 a week in rent from Ministerial Services to cover the costs of living in Wellington.
But they also show that the $700 cap was routinely broken because ministers were unable to find suitable houses in that price range.
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This week Mr Key moved to close down the controversy over ministerial housing by announcing that ministers would be bulk-funded from now on for their accommodation costs. They would receive up to $37,500 for accommodation and be expected to make their own arrangements, saving up to $220,000 in administration costs.
It will be up to ministers how they spend the money and, if they find a cheaper place, they can pocket the difference.
Vote:September 10th, 2009 at 6:50 am
> hand it all over to a body such as the Remuneration Authority.
Well, that is a possibility. But there is a much simpler solution, which you are well aware of. That is, Ministers should make their own arrangements without demanding handouts from taxpayers. It’s amusing to see the Right so confused about this. When Paula Bennett released private details about beneficiaries’ incomes, the Right were keen to put the boot into these good-for-nothing parasites. But who would’ve thought that a highly paid Minister would also need State assistance?
I note that Bill English has also claimed expenses for electricity and cleaning. Why are taxpayers picking up the tab for these? Is Bill so short of money that he can’t pay his power bill?
Vote:September 10th, 2009 at 6:59 am
The thought that Blue Bill gets the taxpayer to pay his power bill makes me rather ill.
Vote:September 10th, 2009 at 8:03 am
@Viking2 6.36am:
Note how many times the words “assurance” or assurances” appear in that article. If I were applying to Work and Income for an accommodation supplement I would need to supply some bloody evidence of my circumstances, not just assurances. Why should Bill English be any different?
This is not going to go away unless and until English puts all the relevant documentation detailing what happened and when into the public domain. If it’s good enough for Paula Bennett to put beneficiaries’ personal details into the public domain without their consent, then surely English can front with his own when there is a cloud over the propriety of his actions.
Vote:September 10th, 2009 at 10:06 am
Give it up toad. You can’t really stir that much shit for Bill English doing exactly what the Green party have been doing for years.
Vote:October 5th, 2009 at 1:56 am
Anyone who thinks that the Greens have never been governed by self interest, think again. MMP political system being the ultimate example. The Greens spent their early years in Parliament trrying to pretend that they were the white knights of politics and that MMP really did mean everything they claimed, (that the Greens were the paragons of the political system that MMP was supposed to produce). Since Donald left the scene there have’t been much claims like that any more.
The fact is, every politician is governed by self interest to some lesser or greater degree. It goes with the territory.
Vote: