Perk adds cream to MPs’ salaries
More than $140,000 being paid for rent on electoral offices
Five MPs and their parties are creaming more than $140,000 in perks each year from the taxpayer, thanks to a generous quirk that allows them to rent offices they own back to Parliament.
The MP taking the most, National leader Christopher Luxon, enjoys a $45,000 annual top-up to his salary as Opposition leader of $296,007.
A spokesman for Luxon said the “arrangements for his electorate office have been declared to Parliamentary Service and comply with all of the relevant rules”.
The perk has been exploited for decades by MPs, but recent changes to disclosure rules have meant the MPs who made use of it, and the rent they charged the taxpayer, have never been published by Parliament.
That has changed — MPs must now disclose any such deals between themselves and Parliament, along with an independent valuation of the property’s market rent, and the rent they charge the taxpayer.
Most MPs have electorate offices for work they do in their electorates.
Parliamentary Service rents properties from private landlords on behalf of the MP for use as the MP’s office. Some MPs have used this as a way to top up their income by renting an office they own themselves back to the taxpayer.
They, or an organisation related to them, pocket the rent paid by the taxpayer as extra income and they can flip the property for a capital gain after they leave politics. It acts as a healthy perk for some MPs, topping up their $160,000 base salaries.
Parliamentary Service requires an independent market valuation for the property to ensure the MPs are not overcharging for the office.
The two MPs who rent to themselves in a personal capacity are Luxon and National’s Jacqui Dean, who earns $14,952 from the arrangement. Dean said the amount charged was “well below” the market assessment.
Labour also uses the perk to get additional funding for the party.
Labour MPs Jenny Salesa and Tracey McLellan have offices owned by the Labour Party, through its property arm, Labour Party Properties Limited.
Those two offices earn over $65,000 in rent a year.
Labour general-secretary Rob Salmond said the party owned “a small number of office spaces, which we lease on a commercial basis like any other rental property owner”.
“We have owned these properties for many years. Some of those leases are to Members of Parliament, and those leases are independently reviewed and approved by the Parliamentary Service,” he said.
Labour got into trouble in 2020 for a Hutt South electorate office used by MP Ginny Andersen, which the party earned a profit from under an opaque arrangement with the property owners, the Professional Firefighters Union.
Labour’s Nanaia Mahuta declared that she too uses the arrangement, netting $12,780 in additional income to an organisation with which she is connected. The office is administered by marae trustees on behalf of the iwi and hapu of Tainui. That means Mahuta does not personally gain from the arrangement.
Mahuta was approached for comment.
National MP Paul Goldsmith also has an office connected to his party. His electorate office is owned by Connemara Real Estate Limited, an entity connected to the National Party.
Goldsmith was late in getting his papers into Parliamentary Service, but he told the Herald the office was rented for $11,496 a year.