The last splurge

October 24th, 2014 at 10:00 am by David Farrar

The Herald reports:

Departing and defeated MPs went out with a splurge on the taxpayer tab, the latest expense details show.

The latest release of MPs’ and ministers’ expenses covered the entire election campaign period and the 10 days after the election.

It shows that most MPs spent less than usual during the election period.

In all, MPs spent a total of $1.5 million between and July 1 and September 30, compared to $1.7 million in the same period in 2013.

But a few MPs were not as frugal.

Mana leader Hone Harawira was the biggest-spending MP. In the last three months before he lost his Te Tai Tokerau seat he racked up $54,020 in expenses.

This compared to $44,737 in the same period last year.

MPs in Maori seats often had big travel bills because their electorates were larger than the general electorates.

Disgraced National MP Claudette Hauiti was again one of the bigger spenders.

Although she was not running for re-election, she spent more than $23,000 in three months – the second-largest bill for a National MP.

I wonder how much money Mana has left from Kim Dotcom? Will he keep funding them? The coalition agreement between the Internet and Mana parties will end next month. Will it be renewed?

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The free flights for the leadership contest

October 17th, 2014 at 7:00 am by David Farrar

The Herald reports:

The four Labour leadership contenders have defended using taxpayer funded flights for their campaigns, saying most of the other costs will have to come out of their own pockets.

The four — Andrew Little, Nanaia Mahuta, David Parker and Grant Robertson — were at Labour Party HQ this morning to sign a Code of Conduct and go through the campaign rules.

They can use the MPs’ unlimited air travel allowance to travel around the campaign — but have to pay for any other costs themselves including hotels, taxis and meals.

Mr Robertson said the use of air travel was within the rules. “[The taxpayer] is not picking up the tab for the contest. We are obeying the rules we have around airline travel. Everything else is our own cost.”

Mr Little said the contest did involve meeting with the public, which was part of an MPs’ job.

They’re meeting people to get them to vote for them – ie campaigning.

I think it is fine for MPs to get travel to party conferences, just as they also get free travel to speak to rotary clubs, business conferences, union conferences and the like.

But this is different. This is travelling to events which are specifically to get people there to vote for you. There is a direct personal benefit, rather than an indirect political benefit.

They should pay for their own airfares.

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Changes to MPs allowances

August 23rd, 2014 at 7:00 am by David Farrar

The Remuneration Authority has published its determination for travel and accommodation allowances for Ministers and MPs. This is the first time they have been set by an independent body. Prior to this, the Speaker and the Minister for Ministerial Services determined them. So it is good to have this now with an independent body.

What are the significant changes.

  • Cap on MPs’ Wellington accommodation increases from $24,000 to $28,000, the level it has been at since 2007. This increase reflects the 18% inflation we have had since 2007.
  • Cap on Ministers’ Wellington accommodation increases from $37,500 to $41,000, the level it has been at since 2009. This increase reflects the 11% inflation we have had since 2009.
  • Daily limit for hotels in Wellington increases from $160 to $190 for MPs and from $200 to $240 for Ministers. Again both these changes are near identical to the inflation level since 2007, so in real terms just a catch up.
  • Daily limit for hotels in Auckland and Christchurch increases from $180 to $210 for MPs and $290 for Ministers.
  • Spouse or partner travel was previously unlimited but is now capped at 20 trips a year for MPs and 30 for Ministers, and also now restricted to travel to accompany the MP on official business.
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MPs and Accomodation

November 11th, 2013 at 11:00 am by David Farrar

Jared Savage reports:

A Herald investigation of property records for all 121 members of Parliament has discovered that six National MPs use their private superannuation schemes to own property that does not need to be disclosed – unlike assets held in trusts. This is because of an exception in the rules of the Register of Pecuniary Interests.

This is similiar to what the Greens did in 2009. However the Greens were actually double dipping by having two MPs both claim for the same property.

My long standing view is that for MPs (Ministers are separate – will come to that), they should not rent Wellington homes they themselves own (either directly or indirectly). While Parliamentary Service does get independent rental assessments for the homes, I think the best way to make sure there is a fair rental is a landlord who wants the rent to be as high as possible and a tenant who who wants it to be as low as possible. When the same person is effectively landlord and tenant, you don’t have that price tension.

I said in 2009:

It has all been within the rules, but as I have said many times before I think that there should be a transition to a system where no MP can be paid for renting as Wellington accommodation a house they own either directly or indirectly.

Back to this story:

As well as the six MPs with Wellington properties in Super funds, a further 26 MPs who get accommodation allowances also have properties in Wellington which are disclosed on the register. Nineteen are National MPs and four are from Labour. The others are the two Maori Party co-leaders and NZ First’s Denis O’Rourke.

So there are 32 MPs possibly in this situation. Note that with some of them, the property they own in Wellington may not be the one they live in. And they can of course own investment properties elsewhere.

Of the six with undisclosed properties held in their Super schemes, Mr Bridges, Mr Sabin and Mr Auchinvole all said they would have no problem with disclosing the properties, but had been advised by the Registrar for Pecuniary Interests not to do so.

Mr Bridges said the properties were in his Super fund because of genuine investment reasons, not to hide them away. He had listed both the Wellington and Parnell properties in his initial return, but was given clear advice to take them out.

So the issue is whether the rules should change.

Mr Sabin said he set his up because he did not have KiwiSaver, and a personal scheme gave him greater flexibility. He had bought an apartment rather than staying in hotels because he had to spend four nights a week in Wellington due to the travelling time from his Northland home.

He said the Registrar of Pecuniary Interests had instructed them not to disclose properties in Super schemes.

“I have no problem declaring it for what it is. I’m happy to comply with any determination of the authority, but they set the requirements, not I.”

I do sometimes wonder if it would be easier for the Parliamentary Service to buy a block of apartments such as Kelvin Chambers and just provide them to backbench MPs as accommodation.

Important to note that there is a difference between how accommodation is done for Ministers and MPs, Ministers get paid a flat allowance of $37,500 (or sometimes $30,000) a year to cover the costs of accommodation to them and their family in Wellington. That is an allowance, not an expense reimbursement. They get that no matter where they live or what their actual expenses are. They could live in a $800 a week rental or bunk down with a friend – the taxpayer pays them $37,500 regardless.

For non-Ministers, it is a reimbursement of actual expenses up to a maximum of (off memory) $460 a week. So it is with MPs, more than Ministers, that you get a conflict of interest if they own the property they are renting. Because as the owner they would like to get as much rental income as possible.

One could make the case that Ministers and MPs should operate under the same regime. Maybe just give them all a flat allowance for accomodation, and leave it to them where and how they want to live while in Wellington?

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Grandstanding Greens

October 23rd, 2013 at 2:00 pm by David Farrar

Claire Trevett at NZ Herald reports:

Green Party co-leader Metiria Turei has been criticised by fellow MPs for breaking ranks over the sensitive issue of MPs’ travel entitlements.

A bill to hand over the setting of many of the MPs’ perks and entitlement to the independent Remuneration Authority was back in Parliament for the first time yesterday after being changed by the select committee so the Speaker would retain control over domestic travel entitlements for MPs.

Ms Turei was on the select committee which agreed to the change unanimously, but yesterday put up an amendment to change it back so the Remuneration Authority did take over control – apparently ambushing the other parties who had been expecting a united front on the issue.

That is grandstanding. If you don’t agree with it, you do a minority report at select committee. But to vote for it at select committee, and then oppose it at the next stage is playing politics.

Speaking in Parliament, Labour’s Trevor Mallard criticised her for grandstanding, saying she voted in favour of the decision to keep domestic travel with the Speaker in the select committee.

“Having not given a peep in opposition, she was a lamb in the committee. For her to come to this House now with amendments attempting to reverse that is an indication of someone who is either not on top of their job, or is a political grandstander.”

Trevor is right on this one.

Mr Mallard’s colleague Ruth Dyson also voiced disappointment at Ms Turei’s decision to lodge the amendment, saying there had been unanimous agreement on it in the committee after extensive consideration.

Ms Turei said the Greens had made it clear they did not agree with the decision to allow the Speaker to keep control of travel, but supported the bill as a whole as it made progress toward ensuring MPs’ entitlements were decided more independently.

Bull. If that is the case, you do a minority report saying exactly that. They didn’t.

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MPs Remuneration Bill

June 22nd, 2013 at 10:00 am by David Farrar

The Government Administration Committee has reported back the Members of Parliament (Remuneration and Services) Bill which was to transfer some expense decisions away from the Speaker to the independent remuneration Authority, which is a good thing.

The Herald reports the major changes:

A committee of MPs has recommended tougher financial penalties for themselves and their colleagues when they are away from Parliament without leave.

But MPs on the Government Administration Committee say decisions about MPs’ travel perks should remain with Parliament’s Speaker while the Remuneration Authority should decide on the level of their accommodation allowances.

The Government’s Members of Parliament (Remuneration and Services) Bill – drafted in response to the regular public anger over MPs’ remuneration – lifted the penalty for MPs absent without leave for more than nine days each year to about $270 a day from the current $10.

However, the committee has recommended that the penalty kicks in after just three days and is effectively increased by setting it at 0.2 per cent of the individual MP’s gross salary.

That works out to $289 a day for a backbench MP, $525 a day for Crown Ministers and the leader of the Opposition and $838 a day for the Prime Minister.

That is much better.

While the Prime Minister, other ministers and MPs are frequently away from Parliament on sitting days, they generally have a leave of absence. New rules setting out the criteria under which MPs are deemed to be absent without leave will be formulated by parties in consultation with the Speaker.

Hone may not end up getting paid much! He’s almost never there.

I’m disappointed however that the committee did not take up (or even mention) my proposal that MPs remuneration should only be reviewed every three years, with any changes to take place after an election. This would have avoided the public backlash around MPs getting pay rises, as no MP would get a pay rise during their term of Parliament. So when they get a backlash at the next pay increase, well they’ll have no one but themselves to blame.

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MPs (Remuneration and Services) Bill submission

May 21st, 2012 at 12:00 pm by David Farrar

SUBMISSION OF DAVID FARRAR ON THE
MEMBERS OF PARLIAMENT (REMUNERATION AND SERVICES) BILL TO THE GOVERNMENT ADMINISTRATION SELECT COMMITTEE

 About the Submitter

  1. This submission is made by David Farrar in a personal capacity. I would like to appear before the Committee to speak to my submission.

Overall Bill

  1. I submit in support of the bill proceeding. I think its provisions represent a welcome and overdue reform, especially in regard to having the Remuneration Authority take responsibility for most allowances and services, as well as salaries.

Timing of Salary Determinations

  1. I propose that the bill be amended to legislate that the Remuneration Authority only review MPs salaries every third year, and publish their determination around three to six months before the scheduled election. The new determination should take effect for the term of the next Parliament.
  2. I submit this, not because I think MPs are overpaid and should be paid less. Quite the opposite. I think it is important that MPs continue to receive appropriate remuneration. However the current system of annual increases creates a regular self-flagellation exercise as media and members of the public lash “greedy” MPs voting themselves a payrise (even though that is an inaccurate description of the process), and pressure is put on MPs to turn down the payrise, and/or donate it to charity.
  3. The public will never like MPs getting payrises during their term of office. However they will accept that the salary for one term of Parliament will be higher than the previous three year term. In the days of high inflation, there may have been a case for annual payrises, but in today’s environment a three yearly adjustment should still not be too large an increase.
  4. They key thing is that no MP gains a payrise during their term office. The salary level for an MP is set prior to the election at which they are elected, and stays for that term. So the public know when electing MPs what the remuneration for the job will be – and candidates will know what the salary is they are elected.
  5. I would expect that the Remuneration Authority, if making a determination for a three year term, would take into account the fact it is for three years.
  6. I think this proposal is a win-win. It gives greater certainty to MPs, removes the annual flagellation around payrises, and still ensures that MPs salaries are set at the appropriate level over time.
  7. The formal amendment would be the addition of a Clause 9(5) which says “The Remuneration Authority will make a determination under Subsection (1) no later than 30 September in the year of a scheduled election, and the determination will remain in force for the duration of the next Parliament as detailed in Section 11.
  8. It could be prudent to have a clause detailing what should occur if there is a snap or early election. In this case, one could either have no new determination, or authorize the Remuneration Authority to make a determination prior to polling day.

Deductions for Absent MPs

  1. I support the increase in the deduction for an MP absent without leave from the House.
  2. The deduction is based on sitting days missed. It is worth noting that if the House is in urgency or an extended sitting, then multiple days may be counted as the one sitting day. This means an MP (for example) could attend on a Thursday yet skip a Friday and Saturday extended sitting, yet face no penalty. It may be wise to define a sitting day as any physical day the House of Representatives is sitting, rather than implicitly the definition used by Standing Orders.
  3. I think the deduction could be increased from 0.2% per day missed as with only 96 scheduled sitting days, that means (after deducing the nine days which gain no deduction) that an MP who attended not a single sitting day would only be deducted 17.4% of their annual salary (if an ordinary MP).
  4. I also think the nine “penalty free” days is too high, as this is only for MPs without leave, which is simple to obtain. I would submit a better threshold is three sitting days (one week) before deductions begin, and then deductions of 0.5% per sitting day. This means an MP who did not turn up to a single sitting day in 2012 would have 46.5% of their salary deducted, instead of 17.4%.

Frequency of Determinations for Services

  1. Clause 29 states that determinations for travel and accommodation services under section 18 should be made once per term, in the first two years.
  2. As with MPs salaries, I think it is more logical to have this determination made towards the end of the parliamentary term and apply for the following term. Again this removes the perceptions of MPs gaining some extra “advantage” during a term.
  3. I propose Clause 29 be amended so that determinations are made in the final year of a term of Parliament, and that they apply for the next term of Parliament.
  4. I support retaining 29(4) to allow for emergency amendments if necessary.

Official Information Act status

  1. This bill entrenches the welcome increase in transparency introduced by the current Prime Minister and Speaker over spending by Parliament.
  2. Some people have submitted in favour of going further, and bringing The Parliamentary Service under the Official Information Act.
  3. I can understand the reluctance of some MPs for this to occur, as it could mean that attempts are made to access (for example) internal communications between MPs and staff discussing political strategy and the like. You could end up with each party OIA’ing the communications and documents of all the other parties in Parliament. Draft policy documents could be OIA’d, for example.
  4. A pragmatic solution may be to agree to have the Official Information Act apply to The Parliamentary Service, but only for the purpose of financial documents. This would provide full scrutiny of parliamentary expenditure but protect political discussions and strategy.

Thank you for considering this submission. I would like to make an oral submission in support, and look forward to appearing.

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Ridiculous criticism

May 17th, 2012 at 4:30 pm by David Farrar

Idiot/Savant at No Right Turn blogs:

Why are we paying for Murray McCully to stay in hotels in Auckland?

According to his latest Ministerial credit card receipts [PDF, p. 12], we paid for McCully to spend two nights at the Heritage Hotel in Auckland. The expense is justified as “accommodation during RWC”. This would be entirely uncontentious, except for one thing: McCully represents an Auckland electorate, and I am informed he is on the electoral roll there. Which means he has a home of his own to go to in Auckland. So again, why the hotel? …

Ministers are given credit cards to cover actual, reasonable and necessary expenses – not because they feel like spending a night of luxury on the taxpayer, or just can’t be arsed driving home.

I’m sorry but this is ridicolous. First of all staying for two nights in the Heritage hotel is not a night of luxury. I’ve stayed there as TVNZ put you up there if you are up for one of their shows. It is a very standard hotel. Nothing wrong with it, but not a luxury hotel.

As for why McCully was staying there for two nights, during the Rugby World Cup. Well he was the Minister in charge of a event which is broadcast to a billion people, and has overall revenues of hundreds of millions. At an event like that you could well have meetings starting very early and finishing late, plus a hotel room allows you to hold meetings in it.

I speak from experience. I was the Chair of the organising committee for the ICANN meeting in Wellington some years ago. This is a fraction of the size of the RCW, but was a fairly major event to host, as you had 500 – 700 Internet policy makers here. Despite living in Wellington, I stayed at the official host hotel of the Duxton (and if anyone calls that a luxury hotel, they have not been there often) as it was decided that the extra cost was fairly minimal in the context of the importance of smooth management, which was having all the key decision makers staying together so that as issues arose, decisions could be made quickly.

In the context of an almost billion dollar events like the RWC, a decision by the Minister to spend two nights in the Auckland CBD rather than what can be an hour away in East Coast Bays, is unremarkable and trivial – and frankly criticism of it is ludicrous, especially painting it a night of luxury.

I think those that glamorise hotels have never stayed in one themselves. In the main they are just places they supply a bed you can sleep in and a bathroom you can shower and freshen up in. Sure there are some luxury hotels with stunning views and the like, but 95% of staying in hotels is just about a well located bed.

When I go up to Auckland, I much prefer crashing at a friend’s place than staying in sterile hotels. However sometimes I will reluctantly go into a hotel, because the location in the CBD allows you to do business more efficiently.

Why did McCully stay in a hotel for two nights in Auckland? The exact same reason – it allowed him to do his job as RWC Minister more efficiently.

UPDATE: Looking closer at the actual DIA documents, the title page is headed up “Credit Card Statements and Reconciliations – Staff of the Office of Hon Murray McCully”. This means it is not McCully’s credit card, but his staff’s ones. And when they are paying for something on behalf of the Minister, they always note that. So when there is no such notation, then the expense is presumably for them, not the Minister.

Having made inquiries, it turns out that in fact the two nights at the Heritage was for a Wellington based staff member who was in Auckland for RWC duties. So I look forward to NRT doing a retraction.

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An independent regime for MPs travel

March 29th, 2012 at 2:00 pm by David Farrar

NZ Herald reports:

Travel perks for former MPs will now be protected in law under legislation debated by Parliament yesterday but the amount spent by each individual former MP will be revealed annually.

The Members of Parliament (Remuneration and Services) Bill costs taxpayers about $1.3 million a year.

Former MPs elected before 1999 and their spouses and widows and widowers are entitled to rebates on domestic and international airfares.

I would’t say the bill will cost taxpayers anything. The existing entitlements are what cost the taxpayers.

Incidentally only 23 of the 121 current MPs will enjoy travel perks when they retire.

The bill shifts responsibility for travel and accommodation of MPs and ministers away from the Speaker and Prime Minister to the Remuneration Authority plus an additional person with knowledge in the area.

This is the key change, and very welcome. Under the joint leadership of John Key and Lockwood Smith there has been both a unprecedented level of transparency with travel expenses released every quarter and every single item on ministerial credit cards released. Key has also reduced some of the Ministerial entitlements such as spousal travel overseas.

The bill also sets in law a requirement by MPs to disclose their travel and accommodation costs quarterly, a practice instigated on a voluntary basis by Speaker Lockwood Smith.

And the bill contains what is known as the “Chris Carter clause” after the ex-Labour MP who went awol after his expulsion from caucus: it increases the penalty for being absent from Parliament without good cause from its present $10 a day to $270 a day.

I think Carter also went AWOL before his expulsion.

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MPs expenses

February 9th, 2012 at 2:00 pm by David Farrar

The quarterly disclosures are out for MPs and Ministers.

Top Ministers in terms of internal costs were:

  1. PM $121,884
  2. Judith Collins $74,138
  3. Pita Sharples $72,473
  4. Steven Joyce $62,223
  5. Tariana Turia $57,260

Worth remembering that expenses are to some degree a reflection of activity and location. Also affected by whether their ministerial home is owned or rented.

Total ministerial expenses for Q4 2011 were $1.16m plus $0.32m overseas travel for $1.48m. The year before in Q4 2010 it was $1.13m plus $0.86m overseas travel for $1.99m total. Obviously with the election, less travel.

Top MPs were:

  1. Hone Harawira $54,961
  2. Phil Goff $32,566
  3. Rahui Katene $29,436
  4. Kevin Hague $28,763
  5. David Cunliffe $28,040

The total MPs expenses for the quarter were $3.15m. For Q4 2010, it was $1.80m. I guess the election saw a lot of taxpayer funded travel.

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A good move

October 6th, 2011 at 11:00 am by David Farrar

Stuff reports:

Decisions over MPs’ and ministers’ entitlements will be handed over to the independent Remuneration Authority, the Government has announced.

Prime Minister John Key said he had introduced legislation repealing the Civil List Act 1979 and bringing together more of the powers to decide MPs and ministers’ travel, accommodation and communications entitlements under one Act.

Under the new Members of Parliament (Remuneration and Services) bill:

* Most travel and accommodation entitlements for MPs and ministers would be set by the authority rather than Parliament’s Speaker or the minister responsible for Ministerial Services.

*MPs would be required by law to disclose their travel and accommodation expenses – they do so voluntarily at the moment.

* MPs will be docked 0.2 per cent of their salary – currently $270 a day – for non-attendance.

Over the last three years there has been a huge increase in transparency and accountability over MPs expenses. This continues that trend.

I still advocate that a further logical step is to change the timing of MPs salary years from annually in arrears to setting them once every three years just before the election. Then that pay rate applies for the term of Parliament, and MPs don’t have t put up with all the crap when the Remuneration Authority gives them a backdated payrise.

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A welcome move

October 5th, 2011 at 11:00 am by David Farrar

Stuff reports:

Decisions over MPs’ and ministers’ entitlements will be handed over to the independent Remuneration Authority, the Government has announced. …

* Most travel and accommodation entitlements for MPs and ministers would be set by the authority rather than Parliament’s Speaker or the minister responsible for Ministerial Services.

*MPs would be required by law to disclose their travel and accommodation expenses – they do so voluntarily at the moment.

* MPs will be docked 0.2 per cent of their salary – currently $270 a day – for non-attendance.

We’ve seen a massive change in transparency and accountability over MPs expenses in the last three years. This is another step in the right direction.

I still think that it would be very sensible to change the salary reviews from annually to tri-annually, so that the salary for an MP and Minister is set just before an election and remains in place for the three year term.

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Wong wronged

September 6th, 2011 at 10:00 am by David Farrar

Andrea Vance reports at Stuff:

The husband of disgraced former minister Pansy Wong wrongly claimed more than $2000 of taxpayers’ money for private business trips, a watchdog has ruled.

A report ordered by Speaker Lockwood Smith last year found the couple had abused the MP’s travel perk on one occasion, in December 2008, and forced them to pay back almost $500. Wong resigned as Botany MP in December.

But, Auditor General Lyn Provost said another trip – in  June 2008  to China’s Lianyungang province – was for “private business purposes” and Sammy Wong should not have asked for a rebate.

However, Provost said her investigations found there was ”no pattern of wrong doing” by the couple “or of extensive business activity linked with overseas travel”.

Wong said she welcomed the report because it found they had not “intentionally abused the system”.

She denied her husband meant to mislead the first inquiry.

In a statement she said: “At the November 2010 inquiry, Sammy Wong contacted the company in Lianyungang, China, to ascertain the dates that he visited there. He received a list detailing trips he had made and the June 2008 trip was not on it.  None of the trips listed involved any parliamentary travel rebates. He accepted the external confirmation in good faith and had no intention to mislead any inquiry.”

Wong added: “I hope the findings of the Office of the Auditor General and my actions taken demonstrate that accountability was accepted and any mistake made was unintentional.”

While in no way condoning the claiming for two trips which were ineligible, I would note Pansy has paid a very high price for just $2,000 of wrong claims. Many other MPs were found to have inappropriately charged more than that to credit cards etc, and they got away with just paying it back.

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Transparency in spending

May 11th, 2011 at 7:00 am by David Farrar

One of the better things John Key has done is to introduce transparency to ministerial spending. Previously you never knew how much each Minister spent, or what it was on. And even more than that, their detailed credit card expenses are now put online.

This allows us to track spending. Now while Labour never released their spending, DIA did provide this for comparision purposes for the first six months of 2008, so we can compare that to the last six months of this Government:

  • Out of Wellington accom down 40% from $78k to $46k
  • Domestic Air Travel down 17% from $559k to $466k
  • Domestic Surface Travel down 10% from $1,589k to $1,428k
  • International Travel up 1% from $1,199k to $1,211k

Wellington accom expenses not included as impossible to compare apples with apples, as houses owned by Min Servs are not shown as an expense.

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Taxpayer funding the Mana Party

April 29th, 2011 at 11:00 am by David Farrar

The NZ Herald reports:

Independent MP Hone Harawira spent $43,000 on travel in three months – nearly as much as the entire Maori Party’s bill of $44,410.

I guess he’s had lots of huis to attend.

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Perk only partially gone

January 18th, 2011 at 1:00 pm by David Farrar

Claire Trevett at NZ Herald reports:

Parliament’s Speaker has moved to officially abolish politicians’ international travel perks, and will vet any travel applications by MPs to ensure they do not abuse the new system.

His new set of “directions” – the rules governing MPs’ spending and entitlements – has abolished use of the perk for private travel, from January 1. And it can no longer be used for spouses in any circumstances.

That is good, and well overdue.

MPs can still claim a rebate if their trip is primarily for parliamentary purposes – a broad-ranging definition which includes “research” and international conferences.

This is well intentioned, but is open to exploitation. If an MP wishes to go over to the UK and attend the Labour or Conservative Party conference, then they will be able to. Catch up with a couple of mates who happen to be MPs there and you have your research component.

But the vetting will ensure no one can set up a work-related meeting on holiday as justification for a rebate.

The Speaker is in charge of vetting those trips, for which MPs must pay part of the costs themselves.

This is better than no vetting, but an inferior solution to what I prefer – that the costs of any international travel be funded out of a parliamentary party’s bulk fund. This would provide a real incentive for MPs to only travel when there is real value in doing so – because there are other things you can spend the bulk fund on – more staff, external research, advertising etc.

The international travel subsidy will continue to be ring-fenced. This provides an incentive for MPs to try and maximise its use.

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Unbelievable

December 23rd, 2010 at 9:00 am by David Farrar

The Herald reports:

Independent MP Chris Carter was going to use his international travel perk for an overseas holiday but cancelled it after media found out, it was reported tonight.

Mr Carter booked flights for himself and his partner Peter Kaiser, business class to Colombo, Sri Lanka, just before Speaker Lockwood Smith last month stopped MPs from using the taxpayer subsidy for holidays, TV3 News reported.

It would have cost an estimated $13,900 – with 90 per cent paid for from the public purse.

Would have been somewhat fitting if the last use of the MP perk had been by Chris Carter.

Mr Carter is quitting politics at next year’s election, and as a former MP he will be able to use the international travel rebate for the rest of his life, without media scrutiny.

It may give him the incentive to quite before the election, so he can start using it earlier.

And Kate Chapman at Stuff also reports:

Mr Carter was not keen to discuss details of the trip when contacted last night. “We have cancelled it. We’ve lost the deposit. We’ve cancelled. We’re not going. Ok, fair enough? You guys have had yet another victory. So thanks, that’s the end of the discussion.”

Poor Chris. This transparency thing is a real burden.

Mr Carter has accused Dr Smith’s office of leaking the details of his trip.

“The leak had the date I was leaving, the hotel I was staying [at] in Singapore, the flight numbers – the only people that know that are Parliamentary Travel and the Speaker’s office, I’m quite sure that Parliamentary Travel wouldn’t have leaked it, so that only leaves one suspect,” he said. The leak was ” incredibly pathetic, vindictive and spiteful”.

Dr Smith has denied leaking the documents and said he did not even know about Mr Carter’s planned trip.

“I didn’t want to comment because I didn’t want to lend dignity to his accusation, but I didn’t even know he was going anywhere, so there was no way I could possibly have leaked anything.”

I have no idea who leaked it, but I agree unlikely to be parliamentary travel. The parliamentary travel office probably have awarded Chris the title of “Most Valued Customer” for his outstanding contributions to their sales targets.

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Goff’s judgement

December 17th, 2010 at 10:00 am by David Farrar

Phil Goff has managed to not actually break the rule on accomodation funding, yet still manage to get himself seen as hypocritical, having broken his word, demonstrating a sense of entitlement, and inappropriately using taxpayer funded staff to do commercial business for him.

The issues are quite complicated, so let us start from the beginning.

At some stage in the 1990s Phil Goff purchased an apartment in Wellington, and lived in it. Parliamentary Service would have paid him an accomodation allowance up to the level of the interest on his mortgage.

Then he became a Minister and got provided with a ministerial house. So he moved into the Ministerial House (which by chance was two minutes from where I live) and rented out his apartment. Nothing too out of the ordinary here.

Then Labour lost the election, and Goff lost his ministerial house. At this stage he had a choice. He could move back into his apartment, or he could rent out a new apartment at taxpayer expense and continue to rent out his apartment.

By this stage it is almost inevitable that the mortgage has been paid off. So if Goff moved back into his own apartment, he would not get a taxpayer funded accomodation allowance.

Goff has claimed he could not move back into his apartment as it had tenants. This is a red herring. S51(1)(a) of the Residential Tenancies Act 1986 states that only 42 days notice is needed to terminate a tenancy if the owner wishes to live there. With the election loss in early November, the apartment could have been free by the end of December.

But Goff chose the route which is of maximum benefit to himself. Now he is far far alone in doing so. In 2008 such arrangements were still secret as john Key and Lockwood Smith had not opened the arrangements up to public scrutiny. So I don’t judge harshly MP’s decisions in the pre-transparency era.

But then we had the transparency and Labour ripped into Bill English for his accomodation allowance use. Note that Bill English was actually found by three Speakers and the Auditor-General to be entitled to a Wellington accomodation allowance.

At that time Phil Goff was asked about his situation where he claims an accomodation allowance, and gains rental income from his property in Wellington. Goff could have defended his right to do so, but instead he pledged “The flat is currently tenanted and I plan to sell it”, as reported by TV3.

That was a very clear indication that he planned to sell it, no later than when the tenants moved out. He could incidentially have sold it at any time the tenants were there – in fact it is probably easier to sell with tenants in it. He had 18 montsh to live up to his word and sell it, and quite simply has just not bothered to do so.

You might expect such a mistake from a junior MP, but from the Leader of the Opposition it is worse. If you make a public commitment, and in a time of such scrutiny on these things, you should follow through on it.

But worse the current tenants moved out, and Goff doesn’t sell the place as promised. He advertises for new tenants. And worse he gets a member of his taxpayer funded staff to be listed as the contact person, and on four occassions show people around the apartment – during work hours.

This is a breach of the rules. That is using taxpayer resources to help Phil Goff make private money. It is in fact the exact thing they hounded Pansy Wong for.

It staggers me that the Leader of the Opposition would agree to having one of his staff be listed as the contact person for his private investment property. That is massively bad judgement. Of course Goff may not have time to do it himself – but there are specialist property managers such as Quinovic who will do it for a fee. Basically Goff chose to use a free taxpayer funded staffer, rather than pay for a professional.

Then to compound his already multiple misjudgements, he defends his renting it out as “it’s my superannuation”.

Can you think of a phrase more likely to piss off the voters? Because Phil Goff is one of those rare MP on the old gold plated parliamenary super scheme. After 30 years in Parliament he will leave with a massive superannuation payout – well into seven figures.

Then Goff blunders again on TV3. He defends his staffer working on renting out his apartment as doing it as a friend, not as a staffer and not in paid time. But this is clearly untrue – at least two of the interviews were done during the day.

I’ve worked for a political party leader, and yes they can be yogur friend as well as a boss. I’ve gone around to their place to fix their home PC (which you could argue anyway is needed for work). But when doing this, always on a Saturday.

Having a staffer find tenants for your investment property is an appalling error of judgement for the man who wants to be Prime Minister.

And in the media today, Goff carries on saying that he was entitled to do what he did, as it was within the rules. Has he learnt nothing from the last 18 months – that the public hate hearing those words “within the rules”. If he was smart, he would apologise for not keeping his word and most of all for using taxpayer funded staff to find tenants for his residential investment property.

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Law Commission on Parliamentary Salaries and Perks

December 7th, 2010 at 1:28 pm by David Farrar

The Law Commission has published its review of the Civil List Act 1979, which sets out MPs salaries and expenses. They recommend:

  • Travel, accommodation, attendance and communications services for members of Parliament and members of the Executive should be determined by an independent body – an enhanced Remuneration Authority which includes a former MP and a person with appropriate skills and
    experience in the administration of Parliament
  • The RA should also determine entitlements to funding and services to support parties’ and members’ parliamentary operations
  • The Official Information Act 1982 should be extended to cover information held
    by the Speaker in his role with ministerial responsibilities for Parliamentary
    Service and the Office of the Clerk; the Parliamentary Service; the Parliamentary
    Service Commission; and the Office of the Clerk in its departmental holdings
  • The OIA should not apply to information held by members in their capacity as members of Parliament, information relating to the development of parliamentary party policies,  and party organisational material, including media advice and polling information.
  • Unauthorised absences of greater than nine days should result in 0.2% of annual salary being deducted a day. That is around $250 a day, up from $10.

Overall this looks very good. I’ve long supported the OIA applying to the financial aspects of Parliamentary Service, but have not supported full inclusion, where someone like me (for example) could send in an OIA asking for all e-mails between Phil Goff and his press secretaries. No parliamentary party could operate with its internal e-mails being made available to the media and other parties.

So I think the Law Commission have done a good job on the OIA side, as their proposals hopefully stand a good chance of being adopted.

The handing over of perks, expenses and parliamentary party funding to an independent body is also an idea whose time has come. Having a former MP and someone with parliamentary administration experience on the Remuneration Authority should mean that its decisions will be made on practical experience, not textbook theory.

I hope the Government, and indeed all parties, support the report. There may be some fine-tuning to be done, but the principles look good to me.

UPDATE: Yay the PM has just announced that the Government has accepted in principle the recommendation to have MPs and Ministers expenses set by an independent body. By the end of this term of Parliament, things will be hugely more transparent and accountable compared to 2008 and before.

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The Pansy investigation

November 28th, 2010 at 12:31 pm by David Farrar

Jonathan Marshall reports in the SST:

EMBATTLED MP Pansy Wong has been “interrogated” by officials over allegations of travel perk misuse.

The National MP and former minister is under investigation by Parliamentary Services after admitting travelling to China with her husband using a travel perk that entitled her to a 90% discount. Rules state the perk can only be used for private travel but her husband, Sammy, conducted business while there.

All of Wong’s travel, including 10 trips taken while a minister in the current administration, are under review.

Last week Wong was hauled into an “interrogation” by investigators, a source close to the inquiry said.

“Pansy was spoken to and it is expected the results will be ready within a few days,” the source said.

Good. Decisions should be made on the basis of a thorough investigation and the facts as they are revealed.

There are generally seven outcomes from MP “misbehaviour”. In rough order they are:

  1. No action taken at all
  2. Money is repaid, but no other action – various Ministers and former Ministers who had minor inappropriate spending
  3. A formal reprimand or warning – Phil Heatley
  4. A demotion but no loss of pay – Chris Carter, demoted from front bench to second bench over his perks
  5. Sacking/forced resignation from a role which results in loss of pay – sacked from Cabinet, or as Deputy Speaker etc
  6. Suspended or expelled from Caucus
  7. Criminal charges laid

No 5 has already happened. What we don’t know is whether the facts support No 6 or No 7 occuring. No 7 will not be a decision for the Government, it will ultimately be a matter for the Police of the SFO.

No 6 will be a matter for the party caucus. It is generally used over issues of party loyalty – Chris Carter for example was not suspended over his use of perks – he was suspended for his letter to the press gallery. Even Taito Philip Field was not suspended for his corrupt behaviour – he was suspended/expelled for saying he might stand against Labour.

It is possible No 6 could happen if Caucus felt that the report is so damning that Pansy should resign immediately from Parliament. However the view might be that having a by-election in election year is a waste of money, if (for example) Pansy indicates she will be retiring at the election anyway.

It is good the report is likely to be complete soon, as that will then allow judgement and decisions to be made.

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Perks gone

November 18th, 2010 at 6:13 am by David Farrar

As expected:

The Speaker has finally sounded the death knell on travel perks after almost 40 years of MPs enjoying taxpayer-subsidised flights for their private international trips and holidays.

Lockwood Smith announced last night that the perks giving MPs discounted international travel would no longer be available for them. …

However, he intended to set up a scheme to allow backbench and Opposition MPs to travel on parliamentary-related trips of their own initiative, rather than the limited opportunities for official travel.

He said the new scheme would have tight rules and was likely to require some personal contribution from MPs towards costs.

I still think the appropriate way to do this, is to increase the bulk funding each parliamentary party gets. Nothing will ensure only high quality trips are funded, like the fact they would be competing for funds with staff, research, policy and comms.

Any sort of dedicated fund or entitlement will end up with controversy.

The Remuneration Authority will decide if MPs will get an increase on their base salary to compensate.

They will – it is basically required by law. The real question is how much.

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Wrong on Wong

November 17th, 2010 at 7:41 pm by David Farrar

Stuff reports:

Former Cabinet minister Pansy Wong will be entitled to a 90 per cent international travel rebate for the rest of her life if she quits Parliament.

This isn’t quite right. The entitlements were frozen. I actually got it wrong on Twitter yesterday as I assumed they were frozen at the end of 1999, when the perk was abolished  for new MPs, but in fact it is 2008. Here is the Speakers Direction:

6.14 A person who was a member before the 1999 general election has his or her travel entitlements frozen at the level for which he or she qualified at the end of the 2005–2008 term of Parliament.

At the end of the 2008 term of Parliament, Pansy has completed four terms. And 6.15(1)(g) defines what you get:

  • Less than 2 terms – 0 %
  • 2 full terms and was in the Executive – 50%
  • 2 full terms and not in Executive – 0%
  • 3 full terms – 60%
  • 4 full terms – 75%
  • 5 full terms – 90%

What does this mean, then for those who are still MPs and who entered at each election. When they retire it will be:

  1. 2008 – 0%
  2. 2005 – 0%
  3. 2002 – 0%
  4. 1999 – 0%
  5. 1996 – 75%
  6. 1993 or before – 90%

Now who can be first to say how many MPs will get 75% when they retire, and how many will get 90%, and how many 0%?

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Labour on perks

November 17th, 2010 at 9:00 am by David Farrar

Claire Trevett reports in the Herald:

Speaker Lockwood Smith will decide tonight whether to abolish MPs’ travel perks – but a wholesale scrapping is increasingly unlikely as some MPs argue to keep a limited discount for work trips. …

While there is broad consensus over scrapping the perks for holidays, Labour MPs at least are expected to argue in favour of retaining some funding for MPs to go on trips related to their parliamentary work, such as meeting MPs overseas or attending conferences. …

Labour leader Phil Goff has made it clear he sees the use of the rebates for holidays as unjustifiable but legitimate work-related trips were important. Opposition MPs and backbenchers are limited to official parliamentary delegations and there are few opportunities to take trips of their own initiative.

I support MPs being funded for international work related travel, but if you continue with it as an “entitlement” it will get abused, beyond doubt. If there is an entitlement  for say one “work” trip every three years, then I am sure many MPs will manage to put together a trip which will qualify for funding.

The reality is that even some “work” trips have little parliamentary aspects to them, and are mainly party political or recreational. Quite easy to visit three or four European countries to catch up with your political mates, spend a few days being wined and dined at a party conference in the UK and for good measure see the All Blacks play as you just happen to be there at the same time.

That’s at one end of the scale. At the other end you might have say the Shadow Education Spokesperson travelling to a couple of countries to meet with Education Ministers, their officials and perhaps tour around some schools being run under a new model. That is entirely legitimate and should be encouraged (again many of the best policy ideas come from overseas).

Parliamentary Service should not be placed in a position where they have to judge whether a trip has enough “work” in it to qualify for a subsidised airfare.

The answer, as I have said before, is to fund international travel out of the leader’s budget. A party leader is far better positioned to decide whether a trip is worthwhile, and they will have an incentive not to say yes to the more dubious proposals, because the more they approve for travel, the less they have for other purposes (staff, policy, research, propaganda etc).

So it is vital that any money for travel not be ring-fenced. The moment you do that, you encourage people to come up with ways to use it all. It must be part of the “bulk” fund that goes to each parliamentary party.

Now there is an argument that the current allocation of $57,000 per (non-Executive) MP isn’t designed to cover international travel, other than for the Leader. This is a fair enough point, and a consequence of abolishing the travel perk could well be to increase the level of funding to the parliamentary party to allow legitimate overseas travel to be funded.

How much should any increase be? Well my rough calculation would be that on average you would expect an MP to do a trip say every three years. The senior ones will do more, and the junior ones less. The average cost of a business class fare is $9,000 so maybe you look at increasing funding from $57,000 to $60,000 per MP per annum. You could argue one trip every five years, so that would be $1,800 extra per annum.

The one thing that should not be done is to retain a travel subsidy as an “entitlement”. That will just lead to rorting of the system. National has signalled it wants the entitlement abolished. Labour’s position is less clear. I hope they will clearly signal tat they do support abolishing any international travel entitlement, rather than just modifying the criteria for it.

No other business has an “entitlement” for international travel. If there is a good case to travel overseas, you make a proposal to your boss, and they agree to fund it out of their budget – or not. That is how Parliament should work also.

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What will happen to MPs salaries?

November 16th, 2010 at 9:00 am by David Farrar

The Herald reports:

An increase to MPs’ salaries is almost inevitable if the Prime Minister’s bid to get rid of their foreign-travel perks is successful.

It is. As people now all know (and something I was the first to highlight over a year ago as it was obscurely buried in the Remuneration Authority’s 2003 determination, and had not been explicitly listed since) the value of the perk (as calculated by IRD) is deducted from their salary effectively.

If the Speaker just abolished it unilaterally, then MPs would have their base salary increase by $9,500 by the Remuneration Authority.

Although the demise of the perk seems certain, the taxpayer is likely to have to make up for it by an increase in MPs’ salaries.

Mr Key said he expected any rise to be “very modest” and putting salaries up by the full $9800 value of the perk was “unacceptable to me”. A significant increase would only expose MPs to more criticism, even though they had no say in their pay, he said.

Mr Key has urged the Speaker to ask the Remuneration Authority to decide how to abolish the perk and whether changes should be made to salaries as a result.

This is where the PM has been quite cunning. He is basically asking the Remuneration Authority to say in advance how much they would increase salaries, if the perk is abolished – with a rather unsubtle note that an increase to the full value is “unacceptable”.

So the Remuneration Authority now has to decide what to do, which is challenging as the most logical would just be to stop deducting the $9,800 from the base salary.

Annual totals for international travel perks for existing MPs:

1992-93 – $263,567
1995-96 – $387,950
2008-09 – $600,000
2009-10 – $432,989

Here’s what I would do. Divide $433,000 by 120 MPs and that is $3,500 per MP. Add that to the base salary and you can claim the exercise is revenue neutral. It’s not the principled way to do it (that would be the $9,800 option) but it is a pragmatic solution.

Labour leader Phil Goff agreed with Mr Key’s request for the perk to be reviewed independently, but said it was essential to retain some entitlement to international travel to allow MPs to go overseas on parliamentary business.

He had used his rebate for his recent trip to Australia to meet Prime Minister Julia Gillard and senior Cabinet ministers. “That enables me to do my job properly and is a legitimate use. Trying to justify the use of it for holidays will never be regarded by the public as a legitimate use.” …

Act leader Rodney Hide said he agreed with the Prime Minister that the perk should go and although it was for the Remuneration Authority to decide on salary increases in lieu of the perk, “you’d hope they’d be a wee bit judicious”.

He disputed Mr Goff’s call for some provision for work travel, saying there was already enough discretionary funding for it in party leaders’ budgets – a bulk sum they get to run their offices.

I’m actually more in agreement with Phil Goff on this point. I do think MPs should be able to travel internationally when it is work related. Many of the best policy ideas come from initiatives in other countries etc.

Now Rodney is right that such travel can be funded from the leader’s office budget. And that is where it should be funded from – rather than a separate dedicated fund. If you have a fund for travel – then people will make sure it gets fully used. If it comes from the bulk fund, then the leader (or their COS) has to decide whether the value of that travel is greater than the value they would get from spending it on more staff, or policy research, or a pamphlet etc etc.

But what I think Goff wants, and I agree with him, is a review of the level of funding for the Leader’s Office to ensure it is adequate to be able to fund legitimate work related international travel by MPs, now they can not use the perk to fund it.

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Perks to go?

November 15th, 2010 at 4:28 pm by David Farrar

Stuff has just tweeted:

BREAKING: Prime Minister tells speaker to abolish MPs perks.

Excellent. Amazing how quickly things can change in a couple of years, once you have transparency. No details yet.

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