From Auckland to Wellington, it's all about the money

Forget the World Cup. Expenses and allowances are still the real football of the moment.

Here's a wee lesson for any aspiring politicians out there, whether they have local or central government office in their sights, courtesy of current Manakau City councillor (and aspiring Auckland Supercity candidate) Dick Quax.

If you are going to go on National Radio to self-righteously lambast your political opponent for his "nickle and diming of the ratepayer" on the basis that he used his council credit card to pay for his coffees and lunches while on official business, you probably shouldn't have claimed as travel expenses the $7 it cost you to drive to an ANZAC Day ceremony (an ANZAC Day ceremony no less!), or the $1.54 it cost you to drive 2 km to a council meeting. Oh yes, I'm sure every cent of the $10,834.96 in expense claims Quax made over the past 2 1/2 years were within the rules and entirely proper, but it does make him look - how to put this tactfully - like a complete douchebag.

I use that last phrase with fond dreams that New Zealand had the equivalent of John Stewart to cover this story. But as I fully accept that I am not that man, I'll pass on to what I really want to post about - the report of the fourth triennial parliamentary appropriations review committee. Because that sounds much more fun, right?

Some background here. Every three years since 2001 there has been a review of the money appropriated for parliamentary purposes (i.e. to pay for all the costs associated with having a democratically elected legislature). That review makes recommendations about the value the public is getting for its money, as well as ways the funding procedures might be improved. The most recent, just released review - carried out by former Speaker of the House Sir Doug Kidd and investment banker Philip Barry - appears at a time when there is a fair amount of interest in this subject. So you can bet that its contents will be poured over with an intensity we usually only see in Duncan Garner when Chris Carter's expenses claims come out.

And the report does have some quite sensible things to say about how the system of parliamentary funding might be tidied up. For example, it recommends the abolition of the international travel subsidy paid to MPs and their partners for private business. It suggests that an independent body decide what allowances and entitlements MPs should get. It calls for an end to the practice whereby MPs can personally gain from the accommodation allowances paid to out of town MPs (at least for any new MPs entering the House in the future).

All that seems fine to me, but a couple of words of warning. First of all, removing the subsidised air travel "perk" inevitably will result in a hefty pay increase for MPs next time the Remuneration Authority looks at their salaries. That's because the assumed benefit gained by MPs from this historical right is factored into their overall package of compensation, meaning that the taxpayer will keep on paying for it one way or the other. It's just that we won't have to see MPs like Roger Douglas or Rodney Hide frantically trying to explain why the cost of their holiday tickets are on us anymore.

Second, even if the international travel subsidy for MPs "personal" business is abolished, they still will have their "official" business paid for. So you'll see more stories like this one ("They fly, we pay") about supposedly profligate MPs living it up large on junkets overseas. And you can bet we'll see some head-scratching about whether a particular trip ought to be "official" or "personal" in nature.

Beyond the report's recommendations on MPs entitlements, however, is a more troubling message. The amount of money spent on running Parliament has increased at a fair old clip - by 75% in real (i.e. inflation adjusted) terms from 1991 to 2009, to a present total of nearly $140 million. Some of that growth has to do with the transition to MMP (which, remember, added another 21 MPs to the House), and some has to do with things like increased security post 9-11. But you also get the sense from this report that MPs - who, after all, ultimately decide for themselves how much to spend on running Parliament - haven't been as tight with the purse strings here as they have been in some other areas. For example, the number of parliamentary staff for each MP has risen from 4.2 to 6 in the last 20-odd years.

The report makes it clear that in the present fiscal climate this upward trend shouldn't continue - and perhaps should even go into reverse. But spending less on Parliament will require MPs to forgo some things that make their job easier, which is never easy to do. The report has some suggestions as to where savings could be made. One of those suggestions in particular is likely to cause some sparks to fly - it thinks MPs in the Maori seats (and other large geographic constituencies) get too much funding and should have this cut.

Again, some context. Because some electorates are much bigger than others (think West Coast-Tasman compared to Epsom), it was argued that some MPs need to have more electorate offices and electorate staff than others. And so back in 2007, the last time this review was conducted, there was a recommendation that MPs in these larger electorates should get more resources than MPs representing smaller electorates to meet the supposed extra costs involved in servicing them. Then, following the 2008 election, the National and Maori Parties' supply and confidence agreement provided that an extra $40,932 should go to MPs from 6 of the 7 Maori seats (with the smaller, urban Tamaki-Makaurau being excepted), as well as the 4 general electorates greater than 20,000 square kms.

The Government justified this increase on the grounds that it was just doing what had been recommended earlier (although as Tracy Watkins pointed out at the time, a lot of the 2007 report's other recommendations went by the wayside). But this new report unpicks a lot of that reasoning. For one thing, a sub-committee of the Parliamentary Service Commission recommended that only an additional $23,328 funding was needed - not nearly $41,000. For another, it turns out that the supposedly extra cost of hiring more electorate offices largely is illusory - MPs in geographically large electorates spend virtually the same on rent as do MPs in small ones. And finally, the report doesn't think that electorate size is really the issue at all - its more the socio-economic make-up of the constituents that matters in terms of placing demands on the services of the MP.

That all makes the decision to give the Maori Party MPs extra money look a little bit suspect. It looks even more suspect when you see that two general electorate seats (East Coast and Taranaki-King Country) that are geographically larger than some of the Maori seats didn't get any extra funding. In fact, a cynic might be excused for suggesting that an extra $41,000 per Maori Party MP was the price National agreed to pay for their votes in support in the House; whilst an extra $205,000 per annum is no doubt very useful for a new party seeking to build a strong electorate-focused organisation.

While I'm sure Sir Doug and Mr Barry are far too good natured to hold such a jaundiced view of the world, there's a suggestion in para. 8.143 of their report that they have concerns that others might:

"More fundamentally, we are concerned that the current system for determining funding for individual members’ support is open to ongoing change with the formation of successive governments.  There are few, if any, checks and balances in the current system on the level of funding for individual members’ support.  As a result, there is a real risk that expenditure in this area will be ratcheted up with successive elections.  At worst, the current funding regime allows for the prospect of a party buying its way into office.  In our view there is a strong case for funding of this entitlement to come under the control of an independent regulator."

Given that such an independent regulator may well agree that these MPs are getting too much by way of funding, and consequently decide to cut back on the amount of resources that they get, it will be interesting to see if National and the Maori Party are as quick to adopt this present recommendation as they were to adopt the one made back in 2007.