John Armstrong: An inquiry we've seen before

Can John Key succeed where others have tried and failed? Will his review of what he calls the "arcane" rules applying to the provision of Wellington accommodation for Cabinet ministers come up with a simple, workable and transparent alternative - as required by the review's terms of reference - while also being fair to the taxpayer?

Or will the review meet the same fate as other attempts to break down the brick wall of resistance on the part of parliamentarians to reform ministers' and MPs' allowances and end up being largely ignored?

The big difference this time is that this review is confined to ministers' accommodation. The review also has the weight and authority of the Prime Minister behind it, even though the work is being done in Key's capacity as the person in charge of the Ministerial Services portfolio.

Key has a lot riding on the outcome, not least the requirement the review go far enough to placate public unhappiness with Bill English who in the space of a week has gone from linchpin to something of a liability.

The exposure of the sums English was claiming in allowances while living in his Wellington home is unlikely to have dented his credibility as Finance Minister in political, economic and financial circles. Outside the Beltway, however, big chunks of Voterland will have stopped listening to what he has to say and have switched him off.

The necessity of getting those voters to switch back on means English's Cabinet colleagues may have to swallow hard and give more ground than they might otherwise want in terms of losing entitlements.

But don't hold your breath. This is not the first time there has been a serious attempt to bring some sort of order and rationale to what amounts to legalised double-dipping.

Back in 2001, the then Auditor-General David MacDonald scrutinised allowances after two ministers - Labour's Marian Hobbs and the Alliance's Phillida Bunkle - got into serious strife for claiming out-of-Wellington expenses when they had made Wellington their place of residence by virtue of registering to vote in the Wellington Central electorate. MacDonald did not mince his words. He found that the existing rules were inadequate, disjointed, too complex and confusing, inherently weak and unsound. He wanted a more coherent regime where spending was soundly based, transparent, effective and efficient, and, moreover, was seen to be so by the public.

Strangely, that sounds exactly like what the Prime Minister's current review of the rules seeks.

In particular, MacDonald wanted one agency to take "ownership" of responsibility for the various allowances paid to parliamentarians, rather than responsibility stretching across several institutions.

He suggested that role fall to the old Higher Salaries Commission, since renamed the Remuneration Authority. Legislation was accordingly drafted along those lines. But the bill was subsequently altered by a select committee of senior MPs from all sides of the House.

Responsibility for ministers' travel and accommodation allowances stayed within the orbit of the Internal Affairs Department's ministerial services unit, while Parliament's Speaker retained oversight of ordinary MPs' allowances.

To ensure everyone was in no doubt about which side of the bread was being buttered, the MPs also decided that the Parliamentary Service Commission - in other words themselves - should review those allowances with "a view to improving transparency".

Promises, promises. Nearly a decade on from MacDonald's hard-hitting report, things are still as transparent as mud.

That is despite the Parliamentary Service Act requiring the Speaker to establish an independent review committee at least once during a parliamentary term to examine how well things are working.

The committee's recommendations are not binding, however. The best example was the 2007 review's call for a rethink of whether former MPs should still get generous travel discounts. Nothing happened.

That is because MPs come to believe such perks are a right rather than a privilege. Moreover, the public was never going to find out who was making most use of them.

At least not until the new broom of Lockwood Smith's Speakership lifted the carpet on this "culture of entitlement".

The revelations just kept on coming. Ministers had moved into Crown-owned apartments or homes and then made money through renting out Wellington properties they own to more junior colleagues who used the night allowance to pay the bill. Or - as in Bill English's case - they had their own Wellington homes designated as an official residence so they could pick up a hefty allowance and associated perks. It has been just a bit too convenient for comfort. It left taxpayers feeling they had been ripped off at a time when their wages and salaries are falling in value in real terms because they are not getting pay rises.

The Prime Minister now has the task of defusing this public rancour, which, though having a strong plague-on-all-your-houses element, is likely to damage his Government far more than the Labour Opposition. Until Chris Carter broke ranks yesterday and called a press conference to defend his large travel bill, Labour had managed to restrain some of its more excitable elements from going public and exploiting National's discomfort.

This is a time to button lip and avoid drawing attention away from National and let that party stew in its own predicament.

That way Labour avoids retaliation - as well as avoiding having to say what it would do about the allowances.

Labour will be wary, however, of John Key coming up smelling of roses with a better, fairer system of accommodation allowances which satisfies everyone. That is going to be hellishly difficult to achieve, however.

For starters, many people will assume the review will substantially trim back or even get rid of allowances altogether. Otherwise, why bother?

They are doomed to be disappointed. Paying an allowance to MPs who live outside Wellington has been the practice since 1951. Key would face a rebellion in his own ranks if he abolished it. Being narrowly focused, the review does not deal with other vexed questions, such as the cost of private overseas travel by ministers and MPs.

On the other side of the fence, ministers are displaying little willingness to make grand gestures of sacrifice. English is only paying back the extra he got on top of the $24,000 maximum annual allowance to which all out-of-Wellington MPs are entitled. He still intends claiming the $24,000.

And that is the nub of it. The furore is all about English. The conundrum the review must tackle (but probably won't) is how to reconcile English's insistence he is not a Wellington-based MP and thus qualifies for the out-of-Wellington allowance when he has effectively made Wellington his primary place of residence for the last decade or so, rather than Dipton, his home town in his Clutha-Southland electorate.

On this score, English is a portrait of stubbornness reinforced by what he would see as principle - that only he knows which one is really "home"and that no one can impose a decision on him.

That leaves the argument in limbo. Truth be told, however, English has already paid a high political price for sticking to his guns, whether rightly or wrongly. Key's job now is to ensure that price does not go any higher.