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Prime Minister-elect Christopher Luxon is yet to decide whether he will move into Premier House or stay in his own apartment in Wellington, for which he will now be able to claim up to $52,000 a year in a taxpayer-funded allowance.
Asked earlier this week whether he wouldlive in the Thorndon property that has been a Wellington home for most Prime Ministers, Luxon said he was yet to decide but probably would.
Luxon’s current Wellington base is an apartment near Parliament that he owns, which he claims an accommodation allowance for – his expenses show he received $31,000 in a Wellington accommodation allowance over the last year, the maximum allowance for MPs who are not ministers.
Should Luxon move into Premier House, he will not qualify for an allowance because it is an official property.
However, the Remuneration Authority’s rules allow for a PM to decide not to move into Premier House, which is dated and has suffered from a lack of investment, largely due to politicians being wary of a backlash from taxpayers paying to renovate it.
They can choose whether to take an allowance to live elsewhere – which has just been raised from $45,000 a year to $52,000 a year for a full-time base or up to $350 a night in reimbursements for a hotel (capped at $52,000 a year). The PM can opt out of getting that allowance.
Luxon will also get a pay increase from the Leader of the Opposition salary of $296,007 to the Prime Minister’s salary of $471,049 – and that is likely to go up in the next few months. The Remuneration Authority must review the salaries of parliamentarians and set the rates for the next three years. That will be back-paid to election day, and it could be a decent bump up, since MPs have not had a pay rise since 2017.
While Luxon might opt to keep staying in his apartment for the sake of convenience and comfort, there is the complicating issue of his diplomatic protection squad officers.
They usually stay onsite or on a neighbouring property to the PM’s. The Premier House grounds provide that base in Wellington, but an apartment building could be trickier.
Luxon’s entry in Parliament’s register of pecuniary interests lists his Wellington apartment among the seven properties he owns. The others are his family home in Auckland, a bach and four investment properties in Auckland. He has no loans or mortgages listed in the register.
One of those properties is Luxon’s electorate office in Botany, which Parliamentary Service pays a rent of about $45,000 a year.
Although Wellington-based Prime Ministers are now allowed to live in Premier House, neither Bill English or Chris Hipkins chose to do so, instead staying in their family homes.
Wellington-based Prime Ministers do not qualify for a Wellington accommodation allowance, because their primary home is in the region.
Former PM Dame Jacinda Ardern based her family there when in Wellington and occasionally told of leaks, possums in the walls and ceiling, and other issues. However, she was a fan of the beehives on the property, gifting pots of Premier House honey for Christmas.
Former PM Dame Jacinda Ardern's post about leaks at Premier House. Photo / Instagram
Prime Ministers live in the top floor of the building, while the lower reception areas and large kitchen are used for functions and events. The upper floor has not had significant renovations in more than 30 years. In 2018, the Government spent about $3 million on security upgrades and some essential repairs.
The lack of investment in the building has been a headache for Ministerial Services, which in 2020 warned that it was “dated and basic” and would fail the Government’s own healthy homes standards. It warned more needed to be spent on maintaining and upgrading Premier House to keep it up to standard.
The accommodation allowances for other MPs and ministers will increase in this term after staying at the previous levels since 2017.
In its decision released in August, the Remuneration Authority noted the cost of both rentals and hotel had increased markedly since then and MPs were struggling to find suitable accommodation within the cap. The Wellington accommodation allowance is only paid to MPs who are based outside the Wellington region but travel to attend Parliament.
The allowance is to help cover the costs of renting or owning a second home in the capital. Other MPs stay in hotels and the cost is reimbursed.
Under the new rates, the PM, ministers and the Speaker can get an allowance of up to $52,000 (up from $45,000) for a permanent base or get reimbursed for hotels up to $350 a night (capped at $52,000 a year) (up from $320 a night).
Other MPs will get $36,400 (up from $31,000) for renting or owning, or up to $260 a night for a hotel room (up from $240 a night).
The Prime Minister and Ministers get a higher rate to recognise they spend more time in Wellington, and many need room for family.
For travel around New Zealand, ministers, the Speaker, and the Leader of the Opposition can claim back up to $350 a night on hotels (or $425 a night in Queenstown, where hotel prices are higher). For other MPs, the top rates are $260 a night, or $290 in Queenstown.
