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Defining rorts in Wellington

When is a rort a rort? The debate has spread to New Zealand, reports Norm Kelly

Norm Kelly 7 September 2009 906 words

Transparent? Parliament House, Wellington. Anita Mitchell/Flickr

Rort [rawrt] (transitive verb): falsify something – to manipulate something to personal advantage dishonestly or fraudulently
— Encarta

Rort (Australian informal, verb): to take unfair advantage of something
— Collins English Dictionary

The abuse of parliamentary entitlements has certainly been in the news this year. From Britain have come revelations that some MPs used their electorate allowances to pay for adult videos, buy toys and even clean out the family moat. The scandal resulted in the resignation of the speaker of the House of Commons, and a government promise to reform the system. In Australia, taxpayer-funded travel for current and former parliamentarians is a regular source of controversy. In July this year it was revealed that former MPs had spent more than $8 million on flights since 2001; this included the use of holiday travel entitlements by former Liberal ministers Andrew Peacock and Peter Reith.

Over the past month, it has been New Zealand’s turn to apply the blowtorch of media scrutiny to MPs’ entitlements – and specifically to ministers’ housing allowances. Finance minister Bill English has been claiming $1000 a week to rent the home that he and his wife have owned for the past seven years. After last year’s election, the title for the house was transferred from joint ownership to English’s wife, which allowed English to claim the extra money that he was entitled to as a minister.

The fancy footwork may have been legal, but was English “rorting” the system? According to the first definition above, probably not, as his actions were not fraudulent – he was claiming a legitimate allowance. New Zealand’s parliamentarians are entitled to $24,000 a year for accommodation in the nation’s capital, Wellington. This money can be used for hotels, rent or board, or to pay interest on a mortgage. Ministers are entitled to a higher allowance, which is currently uncapped but is reportedly limited informally to about $35,000 a year.

If you use the second definition – to take unfair advantage – then English could be accused of rorting the system. Because he is part of the government’s leadership team, some have gone further and argued that he has acted immorally. English has been strident in supporting the government’s public sector job cuts and calling for financial restraint in these troubled economic times. The hypocrisy of uttering such statements while pocketing the extra ministerial perk money was fortunately not lost on English. He has pledged to repay the money, while maintaining that he has done nothing wrong.

Other ministers have also been accused of rorts. In some cases, they’ve maximised their entitlement by moving out of their Wellington properties into rented accommodation and then renting out their own homes – in some cases, to other MPs. All of this reinforces a perception that MPs are in it for themselves, with media reports using vivid images of snouts in troughs to underline their message.

The whole mess raises several questions. First, what are reasonable entitlements? It’s certainly fair and reasonable to provide housing assistance for parliamentarians who have to travel regularly to the capital for parliamentary sittings and committee hearings. It’s also reasonable to provide a more significant allowance for ministers, who have to spend a greater amount of time in Wellington. In some cases, they will choose to bring their families to Wellington, as was the case for some of the ministers referred to earlier – when they were in opposition they purchased small properties in Wellington for themselves; upon becoming ministers they sought larger houses so they could settle their families in the capital.

A solution may be to provide a standard accommodation allowance for non-Wellington ministers, as is currently the case for MPs, but this raises the contentious issue of which ministers are actually “non-Wellington.” Bill English still claims that his “primary residence” is in his electorate in the south of the South Island, despite having lived with his family in Wellington since 1996 (he was a minister from 1996 to 1999).

While it might appear unfair to punish English for having resettled in Wellington by withdrawing his accommodation entitlement, it is also deceptive to suggest that he is primarily living in his electorate when obviously he is not. There are double standards at play here – it would be interesting to see whether the tax laws provide such leniency for other New Zealand workers, who sometimes have to relocate to obtain work.

And who should determine the level of these entitlements? Currently, MPs’ accommodation entitlements are determined by the speaker, while the prime minister sets his ministers’ entitlements. These are conflicts of interest that add to the public perception that MPs will look after themselves and operate by their own rules. A fairer system would be to establish an independent body to determine entitlements, or to use the Remuneration Authority, which sets MPs’ salaries.

A final question is one of transparency. How is the use of such allowances publicised? Details of Bill English’s entitlements became known because of a new system of public disclosure of travel and accommodation costs. This is an improvement on the use of freedom of information laws to get an indication of the costs to taxpayers. But because entitlements are administered by a number of government agencies, there is no easy way for the public to become informed. Instead, citizens tend to rely on information from the media, which unfortunately often sensationalises the issue.

New Zealand needs an independent review process for MPs and ministers’ entitlements – like the Australian system – not only to determine what is fair and reasonable, but also as an educational tool to inform the public of what is involved in these roles. •

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