Min Accom Review TOR out and to be done by Sep

Well John Key is not wasting time. The Govt has just announced the terms of reference of the review of Ministerial accommodation, and the review will identify:

• how to ensure criteria for ministerial accommodation were simple, easy to understand, transparent and cost effective to administer;

• how to ensure value for taxpayer money;

• ensure ministers and their families get suitable accommodation in Wellington.

It will consider

• keeping the current model

• amending the current model giving options;

• replacing it all together or in part;

I can think of several possible models off the top of my head

1. Ministers just get an accommodation allowance (as MPs get an expense allowance) of $xx,000 a year and totally up to them where they stay or live in Wellington. That is one extreme option.
2. Ministerial Services increases it housing stock to 25 houses, owning them all. Ministers have a choice of a Ministerial Services owned house or they stay privately at their own expense. The PM gets 1st choice of Ministerial House, DPM 2nd and so down until the bottom ranked Ministers get the one left over. This is another extreme. No more renting.
3. You allow Ministers to lived in a rented house, as is the case currently, but the house can not be associated with any Minister or MP in any way – including superannuation funds and trusts.  This will not save money (may in fact cost more) but would mean any perception of “gain” from having a Ministerial House provided is removed. This is my preferred option (at this stage).
4. If a Ministers own a house in Wellington and rents it out, that rent is credited against the cost of their Ministerial House. That makes little sense to me as Ministers with money to invest will simply invest in properties in Auckland or Christchurch. It is worth remembering a house is simply a form of investment if you are not living in it.
5. DIA converts the basement of the Beehive from a carpark into a dormitory for Ministers, where all 28 Ministers and their families can live in a big commune. This is the cheapest option and would probably win a public referenda.
6. You have a mixture of maximum rent levels for Ministerial accommodation, based on family size. So for example a Minister with no partner or dependent children may only qualify for $550 a week place, while a Minister with a partner and six dependent children could qualify for say $750 a week.

One complicating factor will be what happens to MPs accommodation allowances. If my option (3) is adopted, then that should also apply to MPs. So that means the Greens Super Fund would no longer be able to rent its houses out to Green MPs etc. I think many MPs would be affected by such a change.

The Herald praises Key for his quick action:

The Prime Minister is commendably quick to order a review of ministers’ accommodation grants after the disclosure that some have gone to unseemly trouble to maximise their income. …

These arrangements have probably been common practice for as long as anyone in Parliament can remember. They have come to light now because the recent expenses scandal in Britain has forced greater disclosure from other parliaments. It is a pity it should have taken public exposure to awaken the Prime Minister and his Cabinet to the hypocrisy of their private arrangements. …

John Key has many more important problems on his plate but this one needs to be fixed. Good example matters.

Another Herald story talks of there being a rule change that lets Bill English claim more than previously. I tend to follow these things quite closely and this was news to me, so I have made some inquiries.

My understanding is that there was no rule change in May 2008 that changed the level of entitlement. There was a clarification that if a Minister did live in a home owned by themselves (limiting them to the $24,000 a year) that expense was still an expense paid for out of Ministerial Services, not The Parliamentary Services, despite being at the level for an MP. This was already the practice, but it was not explicit.

I have asked for copies of the old and new determinations, and will blog copies of them if I get them. Until I have seen the actual determinations I can’t say for sure whether the clarification did in any way affect entitlements.

I welcome feedback on the options for reform I have outlined above, plus any other options people identify. I’m not sure if the DIA review will take public submissions, but if I have the time I’ll make an unsolicited submission anyway.

UPDATE: I now have the two determinations – the 2003 and 2009 ones. Executive Travel, Accommodation, Attendance, and Communications Services Determination 2009 and Executive Travel, Accommodation, Attendance, and Communications Services Determination 2003.

My reading of the documents is the Herald has misunderstood the change. All the new clause 4.3 says is i you do not take up a Ministerial Residence, you are still entitled to an MPs accommodation supplement but it will be paid for by Ministerial Services. The implication that this change in any way allowed Bill English to claim more money is quite wrong.

UPDATE2: All academic now anyway as Bill English has announced he is going to reduce his accommodation allowance from the level he is entitled as a Minister, to that of an MP. This means he will repay around $12,000 and receive around $25,000 less contribution towards his Wellington accommodation. NZPA quotes him:

“The fact is that no amount of detail will change the perception that in some way I am gaining a bigger allowance than other members of Parliament.

“So I have decided to deal with that perception. I’m a minister of Finance. It is my job to lead by example so I will be getting in touch with Ministerial Services to pay back the difference between the rate I am on and the other rate going back to the election.”

I wonder what hurt more – this decision or having to fund the cycleway 🙂

I do hope that the review of the rules is covered in a less sensationalistic fashion now.