Review calls for sweeping changes to MPs' expenses

The review comes in the wake of a focus on the spending of MPs, including Labour's Chris Carter. Photo / Mark Mitchell

An independent review of the way Parliament spends taxpayer money has recommended sweeping changes to MPs' allowances and says they shouldn't set their own rules.

The Parliamentary Appropriations Review Committee scrutinises spending every three years and its latest report was released today.

It says the current regime for MPs' allowances and entitlements lacks transparency and accountability.

"MPs should consider whether it is appropriate for them to continue to be involved in determining the benefits they receive," it says.

"An increasing number of parliaments with whom the New Zealand Parliament might be compared have moved or are moving to have allowances and entitlements determined by an independent body."

New Zealand MPs have resisted this move for years, although their expenses and the money ministers spend are now open to public scrutiny.

Several have had to pay back money and there has been controversy around accommodation allowances.

The committee, chaired by former speaker Sir Douglas Kidd, suggests scrapping the international travel rebate for MPs and their partners and giving them a 10 per cent pay rise instead.

The rebate covers from 25 per cent to 90 per cent of international travel, depending on how long an MP has served.

The report criticises the uncapped domestic travel MPs are entitled to, saying it means an individual MP can effectively determine part of their own remuneration.

"The regime often mixes private benefit with the reimbursement of parliamentary business expenses within the same entitlement," it says.

"As a result it is often not possible to discern whether an MP's claim under the regime is remunerative in nature or relates to an expense incurred in carrying out his or her job as an MP."

The committee wants changes to the way MPs claim Wellington accommodation allowances, an issue which caused a problem for Finance Minister Bill English last year.

Prime Minister John Key changed the rules after that, but the report says tighter definitions are needed, and allowances should be limited to rent and utilities.

"MPs would no longer be able to claim mortgage interest payments as an expense incurred 'in respect of accommodation'," it says.

It also recommends changes to the way electorate offices are funded and says new MPs shouldn't be allowed to claim public funding for premises they own.

"Ownership of these premises exposes the MP to the suspicion that they are seeking to achieve private benefit at the public expense," the report says.

"It is currently entirely legitimate for MPs to receive public funding for premises they or an interested party own and we consider that, as a transitional arrangement, funding for such premises should be grandfathered while the MP concerned continues in office."

The report will be considered by Speaker Lockwood Smith and the Parliamentary Service.

- NZPA