Scoop Election 08: edited by Gordon Campbell

Taxpayer support for Bill English’s home and happiness

August 4th, 2009

In recent days, there has been an odd symmetry between Graham Henry’s response to the All Blacks defeat in Durban and John Key’s rationale for the equally lamentable hole his deputy Bill English has dug himself into with his ministerial housing expenses. In both cases, basic mistakes in handling have been made, and reputations damaged – but the coach has kept saying there was nothing really wrong with the basic approach taken by his team. The only problem? The awful result.

Undoubtedly, the highlight of the Prime Minister’s brief press conference yesterday was this classic exchange between Key and the Dom-Post’s Vernon Small.

Small: When you said he [English] changed the trust arrangement [ with regard to his family home] after the election, and that was the thing that qualified him for the Ministerial Services allowance, and yet he didn’t do it to qualify for the allowance, it was just a co-incidence?

Key: That’s my understanding.

English receives $276,700 in his annual salary as deputy Prime Minister. What is at issue here is the extra $914 a week accommodation allowance he is now claiming for the Karori house he bought in 2003 and has lived in with his family for some years – while claiming his other home in Dipton as his actual family home. The Karori home is owned by a family trust. In March, title was transferred to his wife, Mary. Reportedly, the Karori home has been recently valued at $1.2 million.

During the whole of 2008, English got around $24,000 a year as a taxpayer top-up for his housing costs. At a time when hundreds of ordinary New Zealanders are losing their jobs each week – the amount he now pockets from the taxpayer for living in the same house has virtually doubled over the past 12 months, even as his annual salary has also virtually doubled. You may be wondering if the income of his spouse – who is a GP – is treated as relevant to his eligibility for assistance from the state. No, it doesn’t – such factors seem to apply only to the unemployed.

Though it is lawful and within the current rules on ministerial expenses, this arrangement, is to say the least, a very bad look. True, other ministers in the past have profited from similar arrangements – but what makes the English case seem worse is that reportedly, we are in the midst of the worst recession in decades. More to the point, English has been the government’s main advocate of financial restraint, and has been urging thrift and self sacrifice on everyone else. This has included asking for compulsory savings of five and ten per cent in the budgets of government departments that provide services to the taxpayer.

As Russell Brown has suggested – if the house in Dipton is so crucial to English’s activities as a constituency MP, perhaps it could be treated as English’s secondary home and be the recipient of state assistance, instead of the Karori home. It would probably be cheaper to do so. Meaning : surely, before the money is paid out, shouldn’t there be some occupancy test of what is, or isn’t, the main family home ?

Overall, there is karmic justice to the fact that English and Sir Roger Douglas have been the most glaring examples of working the system. Douglas’ defence of his entitlements was impossible to satirise.

Can we now expect the Act Party to cease beating up on the welfare system and the alleged culture of dependence – given that just like Sir Roger, people on benefits are merely accessing their due entitlements under the law? Perhaps when and if Sir Roger can forego his own culture of dependence on the taxpayer for his travel subsidies, we can start to take his political philosophy more seriously. Libertarianism starts at home – or in this case, at the airport.

Key has now promised an independent review of the rules on ministerial expenses. Currently, Tim Groser, Murray McCully, and Housing Minister Phil Heatley for instance, are receiving ministerial accommodation expenses while owning investment property in Wellington. In the wake of the review that Key has promised, such ministers could well be asked to make offsetting payments in future for the housing expenses they claim, despite choosing not to live in such properties.

The current rules, Key says, are ‘arcane’ and ‘don’t necessarily drive the best outcomes for either the taxpayer or the Minister.’ ( No kidding about the first one – a bit harder to see how the Ministers are suffering.) Given the long hours that Cabinet Ministers work, Key was certain the public would understand: “Most New Zealanders, I believe, would support me in my desire to see the marriages of my Cabinet Ministers and the happiness of their families remain intact.”

Hello? Is Key suggesting that when Ministers are already on an annual salary of $243,700, that foregoing the extra cash for their housing subsidies would put their happiness and marriages at risk? Many families are working two jobs, raising families and putting their marriages and happiness at risk on one fifth of Bill English’s basic income. Even so, they are being taxed on that income – apparently, in order to help provide English with his extra $914 a week in housing assistance to live in his own home. Even Graham Henry would struggle to justify this standard of second phase play.

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    1. 7 Responses to “Taxpayer support for Bill English’s home and happiness”

    2. By Sam Vilain on Aug 4, 2009 | Reply

      Douglas’ defence of his entitlements was impossible to satirise.

      Rubbish. Yesterday’s Herald editorial did a marvellous job with:

      Of all politicians of his generation Sir Roger Douglas has probably done most to earn the country’s lasting appreciation.

    3. By stuart munro on Aug 4, 2009 | Reply

      They made themselves rich and their country poor. How can they hope to represent it.

    4. By Mike on Aug 4, 2009 | Reply

      What a gang of crooks.

    5. By bob on Aug 4, 2009 | Reply

      I can understand why they chose the trust option for the house. She’s a medical professional he’s a public figure, I’d imagine they would be worried about losing the house if either got sued.
      I don’t know why he deserves $925 per week though. I would have thought the cost of a one person apartment would be appropriate. After all, if your kids and wife see more opportunities in Welllington, I don’t see why he can’t pay for their accomodation and utilitiy use.

    6. By James on Aug 4, 2009 | Reply

      What the hell Bob? The ACC bar on suits for personal injury covers medical misadventures in NZ so Mrs English would not be liable as a GP for negligence suits. Ok, you second point is valid, MPs are often liable for defamation suits etc, but this doesn’t explain why the English family decided transfer the property to the trust in the past year. Bill English has been an MP for 19 years — surely he would have done so earlier; perhaps when he was in the opposition and more likely to get embroiled in legal battles. There was only one motive for his actions, and that was to remove his legal title from the property through a trust so that he could receive a ministerial housing allowance.

    7. By Len on Aug 4, 2009 | Reply

      A couple of other issues:
      - The extent that our MPs are up to their eyeballs in taxpayer subsidised property speculation. Instead of an allowance to pay the interest on speculative investments, why shouldn’t the taxpayer own the property and be pocketing the capital gain?
      - All these allowances are ‘tax free’? If so, they are worth 50% more than the stated value to any other high income taxpayer. To be tax free in the private sector an allowance must be on a reimbursement basis (with receipts).

    8. By nznative on Aug 6, 2009 | Reply

      This tidbit of information was pointed out by a poster in the publicaddress comments section.

      Bill English recieves MORE for just his housing allowance than the TOTAL income of the solo mothers who the natianals were slagging off as being paid to much .

      Apparently this also applies to Paula Bennett ………..

      So the Nats are happy for anger and hatred to be dirrected at Solo parents, when the solo parents that the Nats hung out to be abused and slagged off were recieving LESS money to house, clothe, feed and bring up children than the GREEDY Bennett and English were recieving for their houseing allowances.

      Dirty filthy politicians.

      Labor = bad and rotten

      Natianals are just plain evil.

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