Office rented from partner

Andrea Vance reports:

Labour list MP Louisa Wall is using taxpayer money to rent her Manurewa electorate office – from her civil-union partner.

Although within the rules, the loophole has previously sparked debate about who should benefit from parliamentary funding arrangements.

Three years ago it was revealed seven MPs – including Prime Minister John Key and current Cabinet ministers Phil Heatley, Gerry Brownlee and Amy Adams – had bought their offices and then billed the taxpayer for the rent.

MPs are given a capped allowance to cover the cost of running offices outside Wellington. They must declare if they have a pecuniary interest.

Ms Wall says Prue Kapua bought the Manurewa office in December after she won her safe seat.

The former Silver and Black Fern insists the Great South Rd property is being rented at below market value and she is not benefiting financially. She could not say how much the rent was.

Parliamentary Service said it does not discuss individual MPs. However, a spokeswoman said if “a partner/significant other/member owns a property, a market valuation is taken and the rental payment by the service is based on that valuation”.

This story was broken by Whale Oil, and I am surprised that the Stuff story doesn’t reflect he (or at least someone other than them) broke this story.

As to the substance, my views are:

  • It is desirable for electorate offices not to be owned by anyone associated with the MP, so it is an arms length transaction
  • Sometimes there may be compelling grounds for an MP to own their electorate office, so they have security of tenure, and can modify the building as they see fit.
  • In the case where an MP (or family member) owns the building, the rent should be set well below market level – say 50% of market, so there is no suggestion that the MP owning the building is profiting from it.
  • Also in the case where the MP (or family member) owns the building, the level of rent should automatically be publicly disclosed

I don’t think the status quo is good enough, when an MPs or their partner can get paid market rental for their building. They are still benefiting from having the MP able to guarantee them as a tenant for three years. Any rental in this situation should be well below market levels, and should be public.

Records show the property was sold on November 9 to a company called TKL. Ms Kapua, a lawyer, is the sole shareholder and director. It was bought for $405,000, $25,000 less than the July rateable value.

“There is a list of MPs who own their own offices … so your question to me is what?” Ms Wall said.

It was incorrect to say the property was bought before the election. But she added: “I don’t know when it was bought, but it was bought after the general election.

Louisa is incorrect here. The property was purchased by her partner around three weeks before the election.

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