Thomas Coughlan: MPs’ accommodation claims are a rort, here’s how they should be changed

THE FACTS

Once upon a time, the idea MPs should be compensated for their troubles was a radical and progressive idea.

Among the six core demands of the Chartist movement, which tore through Britain in the mid-19th century, was that MPs be reasonably paid for their troubles. This sat alongside more familiar democratic causes such as universal manhood suffrage, the secret ballot, and the abolition of rotten boroughs.

Despite significant democratisation in Britain during that century, which extended the vote to more and more people and made the country’s unevenly sized electorates more democratic, MPs only began to be paid in a way we’d recognise in 1911.

New Zealand, in typical fashion, moved a little faster.

In 1854, our first Parliament, after voting itself a liquor licence, also voted its members an allowance for expenses, which varied depending on whether or not MPs were based in the capital (then Auckland).

Expenses increased through the rest of the century. Finally, in 1944, a select committee declared the work of MPs was a fulltime job requiring a proper salary, declared to be £500, supplemented by a tax-free expenses allowance of £250.

For most of this time, the cause of paying MPs appropriately was a progressive one: for Parliament to truly represent the people for whom it legislated, MPs should be drawn from a range of backgrounds, not just from a class of people well off enough to give their services for free (or corrupt enough to find someone else to pay them for their troubles).

The gentries of Britain and New Zealand didn’t particularly need to be paid for the time they spent in Parliament. They were rich enough to not draw a salary, and clever enough to know that the opportunity to legislate in one’s own interest was far more valuable than any salary.

The Chartists knew even if they succeeded in winning the vote for themselves (or, before women’s suffrage, their husbands), unless MPs were actually paid properly, Parliament and the conditions of working-class Britons wouldn’t really change.

Social Development Minister Louise Upston, the MP currently in the gun for her accommodation allowance, would be unrecognisable to the Chartists – they might even view her as a symbol of their ultimate success. During their era, she would have been unable to vote, much less stand for Parliament and claim expenses in her own time. Now, in the 21st century, she’s taken time out of her private life and been compensated accordingly.

We of the 21st century, however, see it rather differently, perceiving, rightly, that the generous remuneration and expenses of our representatives aren’t making the Parliament look more like us – if anything, the rampant troughing is making Parliament look more like the legislative branch of the landed gentry that the Chartists and their hopes for MPs’ pay were trying to destroy.

If anything, it’s worse. More than a century later, MPs still legislate in their interests, but now they collect a healthy salary, paid by us, while they’re at it.

Labour is floating reforms of the accommodation allowance system and if the current climate persists, reform feels very likely. But what should change look like?

The system of salaries and expenses for costs is as necessary today as it was 200 years ago, and that is that personal circumstance should be no barrier to becoming an MP.

MPs should be fairly paid for their time, paid well enough to be dissuaded by corruption, and compensated for expenses incurred for time spent in the capital. Backbench MPs spend less time in Wellington, so it’s fair their allowance should be lower, enough to rent a small apartment or a hotel room while they’re in the city.

It’s fair that expenses for members of the executive are higher. Ministers effectively live in Wellington and those who enter the Beehive with little means have just as much right to live in some comfort as those who are rich. As they effectively live in Wellington, it’s fair that the allowance for ministers, at $1000 a week, could stretch to cover most of the cost of a flat with multiple rooms for family members.

Without these higher allowances, less well-off MPs, on becoming ministers, might not be able to live with their families, while wealthier ones perhaps could.

The trouble with the system is that unlike almost all other Government support, it’s not the least bit targeted. The poorest MP is entitled to the same allowances as the wealthiest. This means the only check on an MP’s ability to claim expenses is their own appetite for embarrassment, which, as we’ve recently discovered, is rather insatiable.

There’s an emotional attraction to the idea that MPs should be forced to demonstrate need before the taxpayer is forced to fork out – arguing their case for the accommodation they wish to rent and presenting receipts in order to be reimbursed. There’s something unseemly about the fact 18 members of the executive are claiming the full $1000 a week. It suggests an executive that isn’t claiming back expenses for costs incurred, but a culture of passing “Go” and collecting $52,000.

It’s the same emotional attraction to the idea that we should have performance pay for MPs.

Anyone who spends a decent amount of time in Parliament can see that the public gets an extraordinary amount of value from the $181,200 (as of next month) base salary paid to many MPs.

Sadly, the same person will also see that a large number of MPs don’t deliver very much value at all. Increasingly, lazy backbenchers don’t even write their own speeches, instead turning to generative AI to write them. New Zealand’s tightly whipped Parliament means these useless MPs don’t even need to vote. The ranking MP in the House simply gets up and casts it for them.

Tragically, the very worst of these MPs tend to stick around.

They know they’re on a good wicket and plan their lives accordingly. Many of the best ones work their arses off, become increasingly bitter about how little they’re paid for it, and then decamp to the private sector to earn the money they feel like they’re owed for their years of public service in Parliament – some will even be paid to undermine the very causes they went to Parliament to advance. The incentives are all wrong.

Sadly, though, this is a case of the cure being worse than the disease. Asking Parliamentary staff to decide whether one MP’s accommodation allowances are more worthy or legitimate is impossible and would put them in a terrible position. Unelected staff shouldn’t be asked to decide whether it’s fair for one MP to claim expenses for a large house for their family, while another MP, without a family, rented a smaller flat, for example.

Likewise, the idea of performance pay for MPs would only make our already excessively centralised political parties even more powerful. Lazy loyalists would be rewarded with cash, while potentially hardworking MPs from opposite factions would be squeezed.

The obvious fix is a simple one: ban related party leases for electorate offices and Wellington accommodation, and tidy up Parliament superannuation scheme rules to ensure MPs aren’t using private super schemes to build property portfolios.

It’s this particular issue that’s at the nub of most expenses scandals in the past decade or so: an MP claiming an awful lot of money to rent accommodation that they or a related entity own.

It’s within the rules now. But it shouldn’t be.

The current scandal began after Upston, when asked questions about changing eligibility rules for the accommodation supplement, said: “We want to target support for the accommodation supplement to those who need it most, and they are renters; they are not people who are using taxpayer support to increase their own asset”.

Words many New Zealanders would agree with, but words that sound ever so slightly hypocritical coming from an MP using their allowance to do much the same thing.

Banning related party leases would result in the weird outcome that MPs could rent accommodation in Wellington from anyone apart from themselves or a related party, but that weirdness is clearly preferable to the current system of MPs using accommodation claims to effectively top up their salaries.

Some MPs will regret the change. But they should contemplate arguing to the economically depressed electorate this November why they deserve a salary top-up worth tens of thousands of dollars more than their already generous base pay.

In many modern workplaces, claiming large expenses for services rendered by yourself to yourself would land you in a lot of trouble. It should be the same for MPs.

MPs, particularly from the Government, haven’t paid close enough attention to this scandal, and how appalling it looks to the public to have MPs and ministers live in such comfort while the rest of the country waits for the economic turnaround they promised.

The Government should pay particular attention to the fact this scandal arose from its changes to accommodation support for low-income households and the obvious line that can be drawn from that to MPs and their support.

Accommodation support for MPs is the price taxpayers pay for a Parliament that looks more like the country it is meant to represent. The naked rorting of the system by MPs to build personal wealth has meant the current system has begun to look an awful lot like the ugly, medieval system it was meant to replace.

Many MPs will find it painful to reform the rules, no doubt thinking themselves worth many multiples of the allowances they claim. They should remember they’re lucky any resulting system would still be more in line with their view of their own worth, and not voters’.