MPs and Accomodation

Jared Savage reports:

A Herald investigation of property records for all 121 members of Parliament has discovered that six National use their private 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 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 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 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 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 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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