New Ministerial Housing Rules

September 7th, 2009 at 5:10 pm by David Farrar

The Herald reports on the new simplified rules for Ministerial Housing.

The review looked at four options, being:

  1. The status quo
  2. Treat Ministers no different to MPs. Rejected as this does not recognise the extra time they spend in Wellington, and probability some of theri family may live down here also while Ministers.
  3. Use same expense reimbursement regime as for MPs, but lift cap from $24,000 to $48,295 (around $930 a week) being the assessed market value of suitable accommodation.
  4. An accommodation payment of a set level, being $37,500 ($720) a week. This is regardless of actual expenses incurred, but is set for less than the market estimate by around 25%. This is the option selected.

With option (4) the payment reduces to $30,000, if a Minister stays in the same house as they had as a backbench MP. This is equal to around $575 a week.

Option 4 overall reduces the cost to the taxpayer of the accommodation services provided. It will probably also lead to a staffing reduction in DIA, as the Department will expire the leases on the 14 leased properties and sell every property they own except Premier House.

Vogel House and the Bolton Street house were gifted with conditions, so will be interesting to see how they will be dealt with. Personally I would be sorry to see Vogel House go as it has significant history.

The total annual cost is $2.37 million. The cost of the payments in future will be around $900,000 based on 20 x $37,500, 5 x $30,000 and 3 x $0. There seem to be $500,000 of other costs (mainly Premier House) on top of that but overall it is estimated costs will drop to $1.48m. That is a 38% cost saving. If you exclude Premier House, then the costs are dropping 45%.

The PSA should be very very worried about the next pay round!

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19 Responses to “New Ministerial Housing Rules”

  1. PaulL (5,875 comments) says:

    Geez. I don’t think I would have gone that far. But certainly pushes it out as a political football. I would have liked to see some of those houses with some tradition kept, and basically the ministers get right of refusal, starting at most senior and working down. If you take one of them, you don’t get the allowance.

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  2. Rex Widerstrom (5,278 comments) says:

    $930 a week for “suitable” accommodation? Just who do these people think they are?!

    A quick search of property rentals in Wellington city shows plenty of suitable properties from 2 brm penthouse apartment in Evans Bay for $495 a week to a 3 brm home in Karori for $500 a week. And plenty more.

    In fact if you do a search for properties above $900 a week you get nothing.

    Even homes for $700 produces one hit.

    Why should Ministers live in vastly greater luxury than most NZers, and if there are so few places on the market at those prices, what happens to the balance of their allowance if — God forbid — they’re forced to live like the rest of us?

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  3. PaulL (5,875 comments) says:

    Rex – is that furnished or unfurnished? Does that include or exclude services? I presume that the $930 is all up, everything included.

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  4. Viking2 (11,147 comments) says:

    Here you go. Into the inbox today so is the latest stats.

    http://www.dbh.govt.nz/market-rent

    http://www.dbh.govt.nz/market-rent?TLA=Wellington&RegionId=9

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  5. Dean Papa (743 comments) says:

    Bill English paid back about half of the 50,000 that he was claiming to live in his own home. If he had any sense of pride he would have paid it all back. Now under these new rules he’s going to bludge about 30,000 a year. There are people out there who are too proud to apply for the unemployment benefit, no matter how difficult their personal circumstances might be. Bludger Bill and all of his like minded colleagues need to take a good look at themselves in the mirror.

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  6. Rex Widerstrom (5,278 comments) says:

    Thanks Viking2, that’s an interesting set of stats. So $640 a wek for 5+ bedrooms (plenty of room for the whole English brood!) in Karori. Still $300 or so lower than the pollies seem to think is acceptable. A 3brm in Thorndon averages $530.

    PaulL: Does it include services?! 8-O Last time I checked, we were paying Ministers more than enough to cover their power bills (unlike so many of NZ’s elderly and poor) and they were given home phones free under a separate allowance.

    Although the focus has been on Bill English over this, I think it’s unfair. He’s only doing what the rest of them are allowed to do, and what Labour Ministers did before them. It’s outrageous, but — like the Parliamentary super deal in the dead of night back in the 80s — it’s one of the few things to have bipartisan support. Funny that.

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  7. Blue Coast (165 comments) says:

    I know of many who pay a lot more than $720 pw and don’t have to keep a house somewhere else. $720 is bugger all for a premium spot close to the CBD and these homes are not normally advertised.

    To advert a home around a grand a week will only invite tyre kickers who just want to be nosey.

    Who won the last election? State nanny or who

    Give private enterprise a chance or do you all want Uncle Helen back?

    Clearly the big green monster is alive and well.

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  8. peterwn (3,168 comments) says:

    The opposition leader should also get a ministerial type allowance, but the Deputy Prime Minister should be getting a 20 – 30 % premium compared with other ministers. this presumes that Premier House remains the Prime Ministerial residence and can accommodate a big family if need be (I feel very strongly that the Key family should move to Wellington but that is another matter).

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  9. calendar girl (1,177 comments) says:

    Rex, as I read it the figure decided upon is $37,500 p.a., i.e. $720 per week, not $930 per week.

    Even if it was the higher figure, I would still be comfortable. The people are Ministers of the Crown, after all, many with family homes to maintain elsewhere as well. At a cost of $720 per week they will not live in vastly greater luxury than most people of their relative occupational / professional standing. Ministerial salaries may appear ample by your standards, but in practice Ministers are paid less than second-tier executives of many top-50 listed companies – without enjoying the normal job security of full-time employees.

    If we as a country want to go down the track that you are advocating, we will end up with senior parliamentarians from the right being mainly wealthy types who support themselves from outside Parliament, or who are open to bribes. No thanks.

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  10. homepaddock (431 comments) says:

    Just imagine the reaction if the last lot of ministers had been told their allowances were being reduced like this. At least one would have choked on his baubles.

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  11. Rex Widerstrom (5,278 comments) says:

    calendar girl:

    The people are Ministers of the Crown, after all

    I’m not sure why people think Paula Bennett, for instance, should live in a style to which she is clearly not accustomed on my dime. Comfortable and reasonable yes. Luxurious, no. Unless like the PM and possibly Minister of Foreign Affairs they are using their home for entertaining official visitors.

    many with family homes to maintain elsewhere as well.

    The argument for large Ministerial homes as opposed to apartments is so that Ministers’ families can join them. Fair enough. But that means their homes back in the electorate are empty. Rent them for three years, then — it’s what normal people would have to do if they signed up for a transfer.

    Ministerial salaries may appear ample by your standards

    And by the standards of most wage and salary earners and small business owners in NZ, who pay these people.

    but in practice Ministers are paid less than second-tier executives of many top-50 listed companies – without enjoying the normal job security of full-time employees.

    That’s a spurious argument. They knew what they were signing up for and the attractions clearly go beyond money. In many cases the people in the Ministry couldn’t command a fraction of their present salary, let alone the perks, as Cactus Kate so succinctly pointed out a few months ago in a post aptly titled “What Kiwiblog won’t tell you”. And that’s just a handful of them. Then again there are people like John Key, whom the taxpayer couldn’t possibly hope to pay what he could earn in the private sector and who is presumably doing the job out of a sense of values.

    Sure there are a small proportion who might be worth what they’re getting. Most aren’t.

    we will end up with senior parliamentarians from the right being mainly wealthy types who support themselves from outside Parliament, or who are open to bribes

    Or we’ll end up with the kind of people who keep thousands of voluntary organisations* operating solvently and effectively, who serve on school boards, who administer their businesses and keep others employed — either for no return or for much less than the likes of Peter Dunne and Tariana Turia. People for whom the coincept of public service actually means something and isn’t just a phrase that sounds good in their maiden speech.

    I’m with Cactus Kate on this. Put MPs up at the $99 a night Ibis. And if that’s good enough for them, then a $575 a week home in Karori is just fine for Ministers.

    [DPF: The $720a week covers all expenses, so probably is not far off covering a $575 a week rental home.

    And I think is is enirely unreasonable to expect MPs to give up their electorates homes because they become a Minister. You just need to accept MPs need to maintain two homes - one in Wellington and one in their electorate. An MP spends more time in their electorate home and a Minister spends more time in their Wellington home, but a Minister still has electorate duties.

    The principle is simple. If the job requires you to incur costs you would not normally incur, then the job should pay for it. Certainly when I was an employee, I would tell my employer to go fuck themselves if they said I had to spend five days a week living in another city, and I had to pay for the cost]

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  12. Michaels (1,317 comments) says:

    OR…. Build a complex for lets say 5 million and they can have everything they want in it and apart from running expenses… no more costs. GOTTA be a better option!!
    Hell, for a saving like that maybe they could have a bar too.

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  13. Michaels (1,317 comments) says:

    re the bar….. It would only work if Winston never got back in and it goes without saying that there couldn’t be a TAB attached if that was the case.

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  14. Rex Widerstrom (5,278 comments) says:

    DPF:

    Certainly when I was an employee, I would tell my employer to go fuck themselves if they said I had to spend five days a week living in another city, and I had to pay for the cost

    I wouldn’t have worn it either (though in some industries, like radio, you’re expected to. And in others, like mining, you’re provided with very basic accommodation while on the job). The debate isn’t whether they should be provided accommodation, it’s about whether they deserve to live better than 85% of the population whom they are supposed to represent.

    For $720 I could afford my current inner-city apartment (pool, gym, bbq etc) with views over the local botanic gardens (and in a rental market far tighter, and thus more expensive, than Wellington’s), plus utilities, and still have enough left over to pay the au pair.

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  15. scanner (340 comments) says:

    Get real, if managed to slime your way into parliament on a list, your job is in Wellington, MOVE.
    If you are a minister a reasonable allowance to cover your rental would be the go, and an electorate MP should be in a transit type hotel, as per Cactus Kate’s idea, when parliament is sitting, and then back to work for the people who put you there.
    This is 2009, not 1909, we now have things such as internet and telephone to enable these plebs to function remotely, and still generate the same low standard of service.
    What will be interesting will be the speed this passes through the system, I’ve got fair money to say that this will pass like “shit through a goose” as all the troughing bastards stand to gain from it?
    Why do I sometimes think that the last person to enter Parliament with any honest intentions was Guy Fawkes ?

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  16. calendar girl (1,177 comments) says:

    Thanks for your detailed arguments, Rex. I disagree with what I consider to be your relatively narrow approach (eg I don’t judge realistic requirements for Ministers of the Crown on the basis of your personal living standards), but I acknowledge that your views are shared widely by many “tall poppy syndrome” NZers.

    One further point: It’s most unfortunate that you particularise your arguments and /or examples to Paula Bennett. Personally, I prefer to applaud aspiration, ambition and success in people who start out on the wrong side of the tracks or who hit a rough patch in life.

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  17. annie (537 comments) says:

    I agree with scanner – list MPs should have to move, they have no function anywhere but Wellington. Welcome to the real world for them.

    Elected parliamentarians though have to maintain two places, assuming they do electorate work, and they need two homes of a reasonable standard. Some of the commenters here have found 4br homes for $500 pw in Wellington – I can tell you now as a Wellingtonian who rented briefly a couple of years ago what they will be like, bleak. A second home should be the sort of place a reasonably successful person would live in, not some damp Karori horror. Parliamentarians shouldn’t have their noses in a trough, but they shouldn’t be punished for having their job, either.

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  18. david (2,539 comments) says:

    Yeah right, ….. so I aspire to lift myself above the ordinary mob of MPs and become a Cabinet Minister …. for what? So that my extra earning power can be pissed away on the expenses that come with the office? The argument (yes you Rex) that they are paid well enough to meet the power bills is crap. the margin for the added responsibilities and effort aren’t worth it for intelligent p;eople unless they can afford to do it for the power trip and I sure as hell wouldn’t advocate filling the place with power trippers any more than it currently is.

    I just cannot believe how small minded the critics of rewarding Ministers are. Perhaps it is just envy.

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  19. philu (13,393 comments) says:

    tv one is reporting the actual ‘savings’ to the taxpayers..

    ..from keys’ new perks-plan…

    ..are $40,000 per year..

    (laughable..eh..?..)

    phil(whoar.co.nz)

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