The 4th triennial parliamentary appropriations review

Every three years a review of parliamentary spending is done. The boring name disguises that these are very important reviews as it is almost the only external scrutiny of how functions.

This review was done by former Speaker Doug Kidd and economist Philip Barry. There are 28 recommendations – some well overdue. I’m going to blog and comment on most of them.

That an independent program manager be appointed by the five parliamentary agency CEOs (if necessary, by direction of the Speaker, the Attorney General and Prime Minister) with responsibility for and the necessary delegated authority and funding to deliver the ICT rationalisation program developed by Government Technology Services.

This is a minimum step. It is insane that different parts of Parliament are on different computer systems.

Personally I would go much further and seriously look at a full merger of all five agencies into one “Department of Parliament”. You would still have specialist sections for Cabinet Office, legal drafting etc and they can be given autonomy over their policy functions. However you would have just one IT system, one HR system, one accounting system etc etc. I reckon the savings would be in the millions.

That MPs’ out-of-Parliament staffing entitlements be converted to a monetary value and the funding integrated with MPs’ funding for out-of- Parliament non-staff expenditure.

That the funding for MPs’ executive assistants and some communications entitlements also be integrated within the single budget recommended in recommendation two above.

I strongly support these recommendations. It effectively bulk funds MPs and allows them to decide how to spend their budget. At present an MP gets one parliamentary executive assistant and two (one for list) electorate agents whose salaries are set by a scale, and around $65,000 on top of that.

This system would see an electorate MP get around $220,000 total and a List MP around $150,000, and they would have total discretion about how to spend it. A List MP might hire just one parliamentary staffer for $50,000 and spend $100,000 on communications. An electorate MP might decide to hire a top class EA for $75,000 and have only one electorate staff member for example.

The inclusion of communications into a bulk fund would also provide some incentive for keeping such costs down, as they are met centrally at the moment. Labour would be less likely to run phone banks from Rick Barker’s office if they had to cover the costs of the calls from their budget.

That a pilot scheme be set up permitting MPs or recognised parties to directly employ MPs’ support staff if they wish.

Staff are officially employed by The Parliamentary Service itself, even though the MPs decide who get hired and who gets sacked.There are some dangers in making MPs the official employers (would mean MPs themselves could end up in employment court) but the option of letting each parliamentary party be the employer has some merit.

That consideration be given to broadening the class of family members for which restrictions on employment as an MP’s support staff apply.

At present only spouses, partners and dependent children are excluded from working for their partner or parent. The suggestion is it includes siblings and parents also.

I’m not sure on this one. A wider ban is becoming common overseas, but I recall Rodney Hide had his sister as his EA for many years and it was absolutely successful and professional.

That the already-purchased x-ray machine facility be installed at the Bowen House entrance without delay.

No no no. Don’t do it. They’re a waste of time that was forced on Parliament after 9/11. I’m personally not inconvenienced by them as I have a pass, but they just give a false sense of security.

That the remunerative aspects of MPs’ entitlements be removed from the entitlements provided for in the Speaker’s Directions so that the parliamentary business expenses of MPs can be identified for the purposes of the next appropriations review.

That the rebate for private international travel by MPs and their spouses or partners be discontinued and a new entitlement be established allowing MPs to travel internationally for professional development purposes.

That domestic air travel for each spouse/partner and dependent (under the age of five) be limited to an appropriate number of return trips per annum.Those return trips could be anywhere in the country but should be associated with parliamentary business.

That entitlements for MPs to travel by rail, bus and ferry be restricted to travel for parliamentary business and their spouses/partners and dependents be restricted to travel associated with parliamentary business.

This set of recommendations has attracted the most headlines, but also the most misunderstanding. They are very good recommendations which should be supported. First we need to understand how an MPs salary is currently calculated. The Remuneration Authority calculates a total remuneration level for MPs, and then deducts off the value of certain “perks” to get a base salary.

This means that if you eliminate the “perks”, then the base salary will increase. But this is not an increase in their total remuneration. And in fact it is more transparent and caps the ability of an MP to game the perks. Take the 2008 remuneration:

  • Salary $131,000
  • Superannuation $26,200
  • 5% of MPs domestic travel $1,176
  • 45% of spouses domestic travel $3,449
  • 100% of MPs/spouses international travel $9,646
  • Total $171,471

The percentages are what proportion of an entitlement the IRD has calculated to be of “private benefit”.

Now what the review has proposed is that spouses travel be restricted to parliamentary business and they get rid of the international travel entitlement. These are valued at around $13,000 so it would automatically increase the salary by that much to keep the package the same.

I think it is fairer and cleaner to stop the entitlements, and have the salary package reflect this.

That entitlements and allowances for MPs be set by an independent body. This body could be an independent Officer of Parliament.

This is common sense but don’t hold your breath waiting for it to happen.

That, for the purposes of the Wellington accommodation entitlement, MPs entering Parliament from the next general election not be able to claim public funding for premises owned by either an MP or an interested party. The funding for premises owned directly or indirectly by current MPs should be grand-parented while the MP continues in Parliament.

This is exactly what I have been advocating for over a year. MPs should not be their own landlords – either directly or through fronts like the Greens superannuation scheme.

The definition of an interested party should include family, another MP, or a political party, plus associated companies and trusts.

That the level of the Wellington accommodation entitlement remain capped at $24,000 p.a.

This is around $460 a week, which is sufficient to rent an apartment or to cover three nights a week in a hotel.

That the Speaker’s Directions be amended to define the expenses that may be claimed as expenses incurred “in respect of accommodation” and the definition be limited to rent and utilities.

This is a minor change to exclude rates and cleaning.

That the definition of the Wellington commuting area be extended to include the Kapiti Coast up to the Waikanae River.

Seems fair. Basically it means if you live in Pararparaumu you are expected to commute in, rather than live in Wellington.

That the amount of the individual members’ support entitlement be set by an independent regulator.

Yes. The agreement between National and Maori Party to increase funding to Maori electorate MPs was the wrong way to do it and set a bad precedent,

If an independent regulator is not given responsibility for determining the individual members’ support entitlement, that:
a. a cross-party agreement on the appropriate funding regime
be entered into;
b. the funding for the Maori/largest electorates be altered to
c. East Coast and Taranaki-King Country electorates be added to the Maori/large electorate tier of funding; and
d. that an additional intermediate tier, receiving $87,588 (but not an extra staff member), be established consisting of the
Northland, Rangitikei and Wairarapa electorates and up to five
electorates in the lowest socio-economic areas of the country.

I much prefer to have some clear principles and have the level of support funding determined independently. The backup proposal above is an improvement on the status quo but still flawed. For example the rental costs in metro central city electorates can be massively higher than in other seats. So having extra funding tied just to size is problematic.

Also with the proposed extra funding for electorates in low socio-economic areas can be improved. Personally I would give those electorates an additional staff member rather than extra funding.

That MPs entering Parliament from the next general election not be able to receive public funding for out-of-Parliament offices owned by an MP or an interested party. The funding for premises owned directly or indirectly by current MPs should be grand-parented while the MP continues in Parliament.

The definition of an interested party should include a political party and a union affiliated to a political party. The review excludes them from being an interested party.

If recommendation 24 is not accepted, that funding for an MP’s out-of-Parliament office owned by an MP or interested party be limited to 80% of the independently determined market rental for the property. The present funding arrangements for premises owned directly or indirectly by current MPs should, however, be grand-parented while the MP continues in Parliament.

This is also something I have advocated.

That the above recommendations for changes to the system of allowances and entitlements for MPs take effect from the start of the next parliamentary term.

Makes sense. Let’s hope MPs will act or most, if not all, of the recommendations.

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