No public confidence in MPs' travel perk - Key

John Key. Photo / NZ Herald

Prime Minister John Key has asked the Speaker to abolish MPs' international travel perk.

Mr Key said he had asked the Speaker to refer it to the Remuneration Authority to determine how to abolish the controversial perk.

Mr Key said it was clear there was no public confidence in the way the system worked - and that was undermining the institution of Parliament.

He said any salary increase in compensation should be "very modest."

MPs' travel perk - what they're entitled too:

After 3 years in Parliament - 25 per cent subsidy
After 6 years - 50 per cent subsidy
After 9 years - 75 per cent subsidy
12 years or more - 90 per cent subsidy

Mr Key's move came after Labour MP Pete Hodgson raised more questions about whether National MP Pansy Wong had used taxpayer money for private purposes.

Ms Wong resigned her Cabinet portfolios on Friday, admitting she misused her taxpayer-funded travel subsidy by paying for her husband Sammy Wong's travel to China in 2008, while he was on personal business.

Mr Key told reporters the Wong affair had again raised "in the public's mind" questions about the international travel rebate used by MPs and their spouses, and ex MPs and their spouses.

"The strong view of National Party MPs is that this entitlement has now outlived its usefulness, and should be abolished as soon as possible," Mr Key said.

"To that end, I have today advised the Speaker of the House that National's strong view is that the entitlement should end.

"I have asked the Speaker to refer this matter to the Remuneration Authority, which is independent of all MPs and political parties.

"It should be for the Remuneration Authority to determine how best to abolish the entitlement and to determine what changes, if any, should be made to MPs' salaries, but it would be my expectation that if any change to MPs' salaries was to be countenanced, it should be very modest."

Act MPs Rodney Hide and Sir Roger Douglas and former Labour Cabinet Minister Chris Carter have all been involved in using the perk outside what appeared to be reasonable bounds of public expenditure.

Mr Hide's girlfriend went on holiday with him in Hawaii last year, then on a ministerial trip to Britain, Canada and the US, costing the taxpayer about $22,000.

Sir Roger claimed 90 per cent of airfares for he and his wife to visit their son and grandchildren in Britain, part of his $44,000 travel bill in the first half of 2009.

Mr Carter tallied $57,000 in parliamentary spending in travel in his first six months as an Opposition MP.

MPs elected since 1999 no longer get the international travel discount after they leave Parliament, but those elected before that date can still use it.

Mr Key said those MPs would retain the perk, as it was not practical to retrospectively renegotiate employment conditions.

"Looking at the National Party caucus, we would expect around a dozen of the 58 MPs would fall into this category."

The issue of whether MPs' remuneration and expenses should be placed in the hands of an independent body was "worthy of consideration", he said.

A forthcoming Law Commission report would allow further debate of that matter and he was open to that, he said.

Mr Hodgson said today Mr Wong had interests in two private companies registered at Ms Wong's Botany electorate office.

While members of Parliament are ultimately responsible for how they use public money, expenditure must only be incurred in respect of public business, and individuals must be open about how they use public resources.

Mr Hodgson said it was not known whether the companies traded from the office, held separate leases or shared any services.

- with NZ Herald staff