More on Greens over-charging

The Dom Post reports:

The Greens have paid back $6000 wrongly claimed for accommodation allowances after discovering they had been double-dipping for two MPs sharing a house.

Co-leader Metiria Turei said the error was uncovered in June during an annual assessment of the property’s market rent after MP Catherine Delahunty moved into the house with Jeanette Fitzsimons.

“She and Jeanette each continued to claim the rent that Jeanette had claimed alone from February till May.”

The money was paid back last week, though Ms Turei conceded it should have been handed over in June when the overcharging was discovered.

Why on earth did it take until late September to pay it back, when the error was discovered in late June? Did the Greens notify the Parliamentary Service in June of the double dipping or did they just start charging less?

If the Greens had paid the money back in June, and in June put out a press release saying they had accidentally over-charged, then this would have been a very minor story. But by not paying the money back until TVNZ started asking questions some months later, and not living up to their self-proclaimed transparency standards, they have scored a real own goal.

The fund was set up in 1998 by former co-leader Rod Donald to take advantage of Parliament’s rules.

These allow an out-of-Wellington MP to qualify for an allowance, even if they own or have an interest in the property. They can claim for rent or interest costs (but not principal) on a mortgage to a maximum of $24,000 a year.

Opponents have criticised the Greens’ arrangement, saying while it is within the rules it allows them to claim full market rent, even if the mortgage interest is much less.

Yes. It is a legal rort. Now the Greens will not be alone doing it that way. I am sure other MPs have. But the rules should be changed so MPs do not have a direct or indirect interest in any property they rent. You can not be landlord and tenant in my book.

But Ms Turei said the rents were set below market value, and she was confident that in the past the Greens had always charged less than market rent.

But that is not the issue. The issue is that by vesting the property in their super fund, they are maximising the amount they could claim.

And while of course any rental payments are set at what some valuer says is the market rent, it is very advantageous to have a guaranteed tenant for ever, willing to pay whatever the valuer says should be paid (up to $24K a year per person), rather than actually having to find tenants, have periods of vacancy, use a property management company etc etc.

Ms Turei said the Greens’ setup was not a “rort”. But the system should be reviewed, including whether MPs should be able to personally benefit from an allowance, as they had for decades.

A rort is hard to define. But it is a situation where vesting the property in the super fund, has allowed them to claim far more money.

“When I first got into Parliament MPs from other parties told me that is the first thing I should do – buy a flat in Wellington – because the [mortgage] interest would be paid.”

Yes, but the Greens have gone even beyond that – as they get to claim full rental, not just covering the interest on a mortgage.