Under section 16(2) of the Members of Parliament (Remuneration and Services) Act 2013, the Remuneration Authority, the Speaker, or the Minister Responsible for Ministerial Services must assess the value of any personal benefit for members, Ministers, or their family members arising from each entitlement to services determined, and the Authority must take that assessed value into account when determining salaries and allowances under section 8 of that Act. The Authority must include in its determination of the salaries and allowances a statement that sets out how it has taken that value into account in determining the relevant salaries.
The items that give rise to a personal benefit are members’ domestic travel, their partners’ and dependants’ domestic travel, the use of ministerial cars, mobile phones, home phones and the Internet, and home security. This is the first year in which this has been a requirement, and for some benefits there is little or no reliable data on which to assess the new levels of personal benefit. This year the Authority took a very broad-brush approach to the values it takes into account when setting salaries. In future years, the Authority expects there to be better data to assist its decision making.
Members’ domestic travel: Based on 2013/14 usage and the Inland Revenue Department’s assessment as to the proportion of total cost that is subject to fringe benefit tax (FBT), the assessed value of the personal benefit (including FBT) is $1,138 for ordinary members and $1,209 for Ministers. The Authority has used a value of $1,200 for the purpose of setting an ordinary member’s salary.
Partners’ domestic travel: The entitlement to this benefit has changed to become more restrictive. A small survey of members in the latter part of 2014, together with the Inland Revenue Department’s assessment as to the proportion of total cost that is subject to FBT, indicated an assessed value (including FBT) of about $5,500 per member. The Authority has used a value of $2,000 per member when setting salaries. This reflects the Authority’s view, explained in its 2014 determination on MPs’ services, that it is appropriate to display a family-friendly approach to members and Ministers. The assessed value of $2,000 per member for partners’ domestic travel also reflects the Authority’s wish not to penalise members who do not have partners, or whose partners make little use of the benefit.
Dependants’ domestic travel: The entitlement to this benefit has changed to become more restrictive. Based on 2013/2014 usage, assuming that usage would have met the new constraints, and the Inland Revenue Department’s assessment as to the proportion of total cost that is subject to FBT, the assessed value of personal benefit (including FBT) is about $1,400 per member. The Authority has used a zero value per member when setting salaries to recognise the package as being family-friendly as well as not penalising members who do not have dependants, or whose dependants make little use of the benefit.
Ministerial self-drive cars: The average purchase price of ministerial cars is about $44,700 (including GST). Based on Automobile Association data, and recognising that the cars are available for ministerial as well as personal use, the Authority has assessed a personal value of $9,000 per Minister. This is not used in the salary-setting process but can be regarded as being part of a Minister’s remuneration package.
Mobile phones, home phones and the Internet, home security, and the use of VIP cars: There is some assessed personal value in these items, but the Authority has placed a zero value on them for the purpose of salary setting because the Authority considers them to be tools of trade.