Dr Bryce Edwards, Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington.

OPINION

Should MPs be allowed to profit personally from taxpayer funding for the houses they own in Wellington? Most people would probably say “no”. But that’s long been what’s happened in Parliament, and at the moment, there are 23 politicians using an accommodation allowance of up to $52,000 a year to be spent on the mortgages of the second homes they own in the capital.

You can read more about this in Andrea Vance’s story in The Post today: 23 MPs rent back their own homes at the taxpayers’ expense.

The gist of this is that many MPs from outside of Wellington buy properties in the capital – usually apartments – which they live in when they are often in the city for work. Parliament gives all out-of-Wellington MPs and Ministers an allowance to pay for whatever accommodation they need. The capped allowance ranges from $34,000 to $52,000, with ministers and Parliament’s Speaker and Deputy Speaker being able to claim the higher amount.

The National Ministers claiming the Ministerial rate of up to $52,000 per year to pay themselves are Andrew Bayly, Judith Collins, Paul Goldsmith, Melissa Lee, Mark Mitchell, and Louise Upston. Speaker Gerry Brownlee and Deputy Speaker Barbara Kuriger also claim this allowance for properties they own in Wellington.

The National MPs claiming the MP rate for the properties they own are Paulo Garcia, David MacLeod, Stuart Smith, Catherine Wedd, Vanessa Weenink and Tim Costley.

The seven Labour MPs in the same situation are Keiran McAnulty, Willie Jackson, Deborah Russell, Jenny Salesa, Jan Tinetti, Duncan Webb and Arena Williams.

Act has two MPs in the same situation: Todd Stephenson and Simon Court.

MPs who live near Wellington claiming the accommodation allowance

MPs who live permanently in Wellington are unable to claim the accommodation allowance. Hence, Labour leader Chris Hipkins told RNZ’s Morning Report today that he has never been paid the allowance, as his home is in Upper Hutt. But what about MPs who live just outside Wellington? Should we expect them to commute to Parliament, or should they have access to the allowance of up to $36,400 a year? The rules say that the qualifying criteria for the allowance are that the MP must live “outside the Wellington commuting area”. However, that boundary isn’t defined in the Parliamentary rules. Andrea Vance has been looking at examples of MPs who live near Wellington but claim the accommodation allowance. On Monday, she published an article about National MP Tim Costley, who lives in Waikanae, about 58km from Parliament – see: Kāpiti-based MP rents back his Wellington flat at taxpayers’ expense (paywalled).

Costley, who collects the allowance to contribute towards the cost of the apartment he owns in Wellington, explains how the long hours of work make staying in Wellington appropriate: “As a junior MP I am required to stay on precinct until at least 10pm and often there later and after midnight in urgency. I am required to be back at Parliament for early meetings starting between 7.30 and 8.30am.”

He also claims that the costs to the taxpayer “works out at about the same as for MPs who stay in hotels”. Not everyone is convinced by that. Newstalk ZB Wellington broadcaster Nick Mills has labelled the MP “Costly Costley” and says that “a 40-minute drive” shouldn’t be too much for an MP, and asks: “How many people living in Waikanae have to commute every day?” – see: National MP Tim Costley is taking taxpayers for a ride.

Yesterday, Vance also delved into the example of Labour MP Kieran McAnulty, whose wife – Gia Garrick, the chief press secretary for Chris Hipkins – has an apartment in Petone that he stays at – see: Labour’s Kieran McAnulty claims housing perk to live in wife’s apartment (paywalled).

McAnulty’s primary residence is in Masterton, which he says is a one-hour, 40-minute drive from Parliament. He explains in the article that he used to rent his own place but now stays at Garrick’s apartment, which he says she bought before their marriage. Hence, “I do not own the flat, nor am I on the mortgage… I pay my share to stay there when Parliament sits.”

Time to reform the allowances system

I went on RNZ’s Midday Report yesterday to argue that reform is needed to this allowances system. I put forward the case that although MPs from outside the Wellington region should have access to state-funded accommodation, they shouldn’t be allowed to profit personally by renting their own houses and sending the bill to the taxpayer. It creates a situation in which MPs receive taxpayer assistance to purchase additional dwellings, from which they then get capital gains, which most people wouldn’t consider part of their job.

I suggested that politicians should only be able to claim the allowance for accommodation provided by third parties, i.e., they shouldn’t claim an allowance to live in their own properties. This wouldn’t save taxpayers money but would remove the pecuniary interest that currently complicates the issue. For more on this, see RNZ’s article on the issue, Christopher Luxon defends MP Tim Costley claiming allowance to live in own flat.

Similar points were made by former Press Gallery journalist Vernon Small in an opinion piece in March in which he said that MPs shouldn’t be able to rent either accommodation or electorate offices from themselves, even via trusts and superannuation funds: “It would be tidier and more transparent if they instead rented their Wellington digs or electorate offices from a third party, though the net effect is probably neutral for taxpayers. (For the benefit of Labour and the Greens, a political party or private superannuation fund are not third parties). In the interests of public confidence, it is a change our parliamentarians should have made long ago” – see: Perk blinds MPs to political risk (paywalled).

Perhaps a moment for reform will, therefore, take hold. And today Chris Hipkins stated that he’s open to the housing entitlement rules being examined again, possibly leading to a rule against MPs claiming an allowance for property they already own. Hipkins said: “I think the real question is whether MPs should have any pecuniary interest in the places that they’re renting” – see RNZ’s Chris Hipkins open to looking at MP accommodation allowannce.

MPs claiming funding for electoral offices they already own

In addition to being allowed to get taxpayer funding for their Wellington houses, MPs can also get the Parliamentary Service to pay rent on office space that the politicians own themselves. It means that the MPs are often the landlords of their own state-funded rentals. For example, in the case of Prime Minister Christopher Luxon, Parliamentary Service pays a monthly rent of $3750 for his Botany electorate office in Northpark, which Luxon owns and is valued at $1.52m. Similarly, Labour’s Willie Jackson charges the taxpayer for an office he owns – but charges the lower rate of $1750 monthly.

Two other MPs charge the taxpayer to rent electorate offices owned by trusts they are connected with – Labour’s MPs Jenny Salesa and Tracey McLellan. And six MPs rent offices owned by their political parties: Labour’s Chris Hipkins and Rachel Brooking, and National’s Paul Goldsmith, Melissa Lee, David MacLeod, and Miles Anderson.

All such MPs need to provide “conflict of interest” details on their office leases, and Parliament publishes these here: Annual Members’ ECO Lease Disclosure as at 31 March 2024.

Much of this debate is arising at the moment because of growing concerns about the gap between the wealth of politicians and a public that is mired in a recession – especially while politicians are making cuts to the public service. There is also increased scrutiny of politicians and their pecuniary interests, especially regarding housing.

For more on this, see my recent columns: MPs own 2.2 houses on average and MPs’ financial interests under scrutiny.

Finally, on RNZ yesterday, I suggested that Parliament might want to solve the problem of politician accommodation by establishing some sort of “state-owned hotel” for MPs. And today, Andy Milne of The Blue Review website has put together a satirical take on what this might look like – see: Parliamentary Dormitory Enquiries.