Dom Post on MPs perks

November 2nd, 2010 at 3:00 pm by David Farrar

The Dom Post has an editorial and a story on MPs perks today, and both rather over-state their case in my opinion.

The editorial is on transparency over the MPs travel perks. Now my position is actually the same as the Dom Post’s – that the perk should be abolished. But the editorial goes too far when it says:

Dr Smith argues that the subsidy, which cost $432,989 last year, is actually paid for by MPs collectively forgoing part of their salary entitlement.

It is an argument that bears a passing acquaintance with the facts. The Remuneration Authority takes account of the cost of the subsidy when setting MPs’ pay.

That is not a passing acquaintance with the facts. It is 100% correct, even if the Dom Post does not like it.

The travel subsidy, like many other MPs’ perks, was initially introduced in lieu of a pay rise. However, when responsibility for setting MPs’ pay was transferred from Parliament to the Remuneration Authority’s predecessor, the Higher Salaries Commission, it ignored many of the entitlements MPs had voted themselves.

It did – up until 2003. In 2003 the Remuneration Authority moved to a total remuneration calculation where it calculates what should be the total remuneration for an MP, and deducts off the super subsidy and the travel perks.

Hence MPs receive what an independent body thinks their jobs are worth plus the value of the extras they have voted themselves over the years

No this is absolutely wrong. The independent body works out what their jobs are worth and deducts the value of the extras off the remuneration to calculate a base salary.

extras that inflate the base salary of today’s MPs from $131,000 to more than $180,000.

Not quite. The Herald calculates it as:

  • Salary $131,000
  • Super Subsidy $26,200
  • Domestic Travel $1,176
  • Partner Travel $3,449
  • International Travel $9,646

That is around $170,000 as the value of an MPs remuneration package.

That gives even the meanest MP an income higher than 99 per cent of his fellow citizens. Whether it is too much is a matter of judgment, but it is not a matter of judgment that should be exercised by those who stand to benefit from it.

Eight years ago Parliament was advised to set up an independent body to determine MPs’ pay and entitlements, but when the legislation reached Parliament’s standing orders committee – a body every bit as powerful and self-interested as any trade union – it was gutted.

The ongoing furore over MPs’ travel expenses is the price MPs pay for refusing to surrender control of their pay and perks. It is a price successive Speakers have been happy to pay, but it is not one the public should tolerate.

MPs’ pay and perks should be set by an independent body that takes account of comparable pay rates here and overseas, the state of the economy and workloads.

I agree they should all be set by the Remuneration Authority, but I don’t think it would reduce the “furore” over pay and perks.

Now in this article we read:

Members of Parliament are secretly planning to change the rules around their $24,000-a-year accommodation allowance to make it easier for those who make Wellington their home to still be counted as out-of-towners.

Under the new rules, MPs will be able to nominate a “home base” where they normally live when not doing parliamentary business in Wellington. If that is outside Wellington, they will qualify for the accommodation allowance.

I have not got a copy of the new rules, but from what I can glean the change is around wording, not substance. The old rules referred to primary residence and the new rules refer to a “home base”. The Auditor-general herself said the term “primary residence” was not a useful one as the test has never been where an MP spends most of their time. If that was the test, then no Minister would ever be found to live outside Wellington.

One has to approach this from a principled approach, in relation to the fact the job of an MP requires them to live in Wellington some of the time, and when in Wellington they need to be have a place to live. The principle is that an MP should not be out of pocket for what is a work related expense, but neither should they gain from it.

If an MP, before they became an MP, resided outside of Wellington then their Wellington accommodation expenses get met (up to a limit) by the taxpayer. The exception to this is if the MP abandons their out of Wellington residence – either by selling it or renting it out. If they do that, then they are gaining at taxpayer expense.

The Auditor-General ruled (as did Speakers Hunt and Wilson) that Bill English was entitled to a Wellington accommodation allowance because he still maintained his Dipton property. If he had sold it or was leasing it out, then they would have found differently.

The one change I would make is I would bar MPs from having a direct or indirect interest in the Wellington accommodation they claim the allowance for. The Greens had their super scheme own several as a way to maximise income for themselves – and in fact were even claiming twice for the same property. Other MPs have owned the places they rented.

So the change in the rules is fine – the only potential for abuse is:

But one MP agreed yesterday that under the new definition it might be possible for an MP to maintain a small empty apartment out of Wellington and nominate it as a “home base”, when it would not have fitted within the definition of a primary residence as most people understood it.

In theory yes it is possible an Minister could move their family to Wellington, and sell their five bedroom house in the electorate and designate a small apartment as their home base. But there is always a way for venal people to rort the rules – and if any tried to do that, I would hope the media will expose that.

You could try and have a rule that an MP does not downgrade their home residence while they are an MP, but frankly it is unworkable – what if their kids move out of home etc.

So no problems with the change, but I do think it would be desirable to do a further change – to ban MPs from claiming the allowance for a property they have a direct or indirect interest in.

Tags: , , ,

13 Responses to “Dom Post on MPs perks”

  1. bhudson (4,734 comments) says:

    DPF,

    Facts don’t sell newpapers

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. KevinH (1,131 comments) says:

    A solution to the dilemma of a housing subsidy for MP’S is to allocate them a comfortable state house up in the Hutt or Mana .These are excellent homes and would meet the needs of MP’S perfectly.
    On the issue of travel allowances a non redeemable voucher system would work fine.MP’s would be issued vouchers for rail and buses as well as economy seats on airlines.

    [DPF: I'd rather have MPs at work, than spending an extra 20 hours a week in buses and traffic]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. lastmanstanding (1,204 comments) says:

    I agree with KevinH or though he is far more generous than I as regards the housing.

    Seeing as how they are all so in touch with all things Maori how about building some whares in Parliaments grounds for them. Would also save the cost and time of getting to work in the mornings

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. gravedodger (1,516 comments) says:

    My well based and almost total support for Speaker Smith’s empowering efforts to make the parliament more professional, particularly the enormous contrast in his raising the standards at Question time compared to the pathetic efforts of his two immediate predecessors, leave me feeling that he has dropped the ball here with the line open.
    I accept the history that has developed to where we are now with subsidised travel for current and past MPs and their spouses but with the inherent ability of the duplicitous to rort the system we need the glare of the headlights to shine on this facet of their spending of my stolen money.
    If privacy is the issue then let the buggers pay for any travel that may be of embarrassment to them from their own pockets and then I couldn’t give a rodents posterior about where they go with who and for how long so long as it is legal under the law.
    At least with the sanitising effects of light they then have to consider if the travel, if they want me to pay for it, will be ultimately be seen as a good look or not.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. Nick R (497 comments) says:

    I think the Dom Post’s main concern about the travel expenses is that they will be deprived of an easy source of news copy. If the Speaker stops releasing individualised travel expenses, they would actually have to find that information out – i.e. do some work.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. gazzmaniac (2,317 comments) says:

    Regarding housing costs – I think you’ve got it wrong DPF. The easiest way to administer it would be to provide a yearly allowance to let that MP spend as he or she thinks appropriate. If that means they pay their own mortgage, great. If they save money by getting a one bedroom unit, let them pocket the difference. If they get a big house on the hill, then let them, but don’t pay them any more for the priviledge.
    As for travel, yes the data should be released. But if it’s work related, it shouldn’t be included as part of their pay, rather as an office expense of some sort. For most of us who travel for work it’s really not that much of a perk, and I’d be disgusted if it were considered part of my take home pay.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. big bruv (13,311 comments) says:

    $170,000 a year for the likes of

    Locke
    Delahunty
    Norman
    Hughes
    Hatfield
    Beaumont
    Pillay
    Dyson
    Street
    Ginga Hughes
    Paul Quinn

    Are we fucking mad?…..not one of those people would earn half of what we pay them if they had to find work in the public sector.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. frog (84 comments) says:

    Okay, the Greens have released their expenses, including the travel perk ones that Lockwood Smith says MPs don’t need to be publicly accountable for anymore.

    Which other parties will follow suit?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. Rodders (1,790 comments) says:

    Phil Goff has released details of Labour spending

    http://www.stuff.co.nz/national/politics/4299776/Labour-leader-releases-MPs-spending

    Will the self-appointed martyr from Te Atatu do so as well, or will he use the excuse that he doesn’t want to upset Mr Speaker?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. bhudson (4,734 comments) says:

    The numbers above from both DomPost & Herald (assuming they are both accurate) show that the travel benefits are costing us less than would be the case if they were cashed up in the total remuneration package.

    Simple maths would suggest we are better off keeping them as is. (In which case, unfortunately, the MPs have a right to keep what amounts to their personal expenditure to themselves.)

    [Simple maths was $433k subsidy/# MPs, compared to the Herald's estimates of remuneration value of the travel benefits.]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. CharlieBrown (909 comments) says:

    Give them the average wage. MP’s are supposed to be there to serve their country, no-one should be getting rich by being an MP. It is wrong having career mps – the likes of Helen Clarke, that live their life of the public teet without a clue about the real world.

    I would even go as far as saying that all government servants should be earning 10% less than the industry average.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. BeaB (2,058 comments) says:

    Yawn.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. GPT1 (2,090 comments) says:

    Slow news days so kick everyone’s favourite target.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.