Explanatory memorandum
Note: The following explanatory memorandum should be read in conjunction with the explanatory memorandum(s) appended to the:
This memorandum is not part of the determination, but is intended to indicate its general effect.
This determination comes into force on 20 September 2020.
The Act requires the Authority, in making its determination, to have regard to a number of factors, including fairness to the taxpayer and independence of approach.
Starting points
The starting points for the Authority in making this determination have not changed from those of its previous determinations. They are that—
members and Ministers should not personally have to meet the expenses, such as accommodation, that they require to enable them to do their job:
any personal benefit to members and Ministers should be kept to a minimum:
public resources are used efficiently and effectively.
Members and Ministers are generally recognised as having 2 places of work, namely,—
Wellington, where they attend Parliament and, in the case of Ministers, where they also attend Cabinet; and
their home base, where they attend to a wide range of matters affecting constituents.
Therefore, it is appropriate that the costs of Wellington accommodation, if Wellington is not their home base, should be a public expense. However, the Prime Minister’s accommodation in Wellington is an exception to this. It is our view that the Prime Minister should be able to reside in Premier House/Te Whare Pirimia even if the Prime Minister’s home base is in Wellington. There is a high degree of symbolism in, and solid practical reasons for, having an official residence for the head of the government. It is also a more cost-effective option than other alternatives.
As part of their work, members undertake a significant amount of travel, both within their electorates and around the country. This is also the case with list members. List members customarily have bases in electorates as well as responsibilities for nation-wide communities of interest. All members routinely attend evening and weekend meetings and other events. They must be constantly available to constituents, the general public, and the media in a way not required of most other groups. The pressures on Ministers and the Prime Minister are especially demanding. As a consequence, members and Ministers have much less of a family life than that which other New Zealanders take for granted, often over a long period of years. Therefore, we have continued to provide for some limited family-friendly measures designed to recognise that reality.
The Act gives the Authority responsibility only for some of the services required by members and Ministers. Travel services, office space, communications, and other support for members remain the responsibility of the Speaker. Travel services for Ministers remain the responsibility of the Minister Responsible for Ministerial Services. Within the constraints of that framework, we have continued the approach that treats members and Ministers similarly. For example, both members and Ministers are entitled to an annual accommodation payment. In addition, certain services for the Prime Minister, the Speaker, the Deputy Speaker, and the Leader of the Opposition are generally aligned with those for Ministers, and certain provisions for qualifying electoral candidates with those for members, while allowing some differences to recognise unique roles.
Process followed
The Act prescribes the process to be followed in making a determination. The Authority engaged with members about preparing this determination. We sought the advice of the Minister Responsible for Ministerial Services and the Speaker, and had the benefit of receiving the views of a cross-party committee established by the Parliamentary Service Commission.
We sought the views of the Parliamentary Service and the Department of Internal Affairs—Ministerial and Secretariat Services, given their responsibilities for the administration of the services provided for in this determination. Nationwide and regional market data provided by industry and government sources informed the setting of the accommodation rates.
We consulted the Commissioner of Inland Revenue about the taxation consequences of the determination. Consequently, we have assessed that there has been no change in the value of any personal benefit or potential personal benefit from what had been assessed for the 2017 determination and the amendments to that determination.
As required by the Act, we provided members and Ministers with the opportunity to comment on the determination in draft form.
Accommodation payments
The Remuneration Authority has reviewed both the Wellington accommodation payments and the non-Wellington accommodation payments. COVID-19 has created a rapidly changing environment that is having an immediate and unprecedented impact on the New Zealand economy and on the accommodation industry, particularly the hotel sector. The impact on accommodation rates is difficult to measure at this early stage. Therefore, the Authority has decided to maintain the accommodation rates stipulated in the current determination. It will continue to monitor accommodation (rentals and hotels) rates during the term of this determination. If required, the Authority may issue an amending determination to address any future changes to the accommodation rates.
Changes from previous determination
The main changes that have been made by the Authority in this determination are set out below.
Definition of parliamentary purpose
This determination has replaced the definition of “parliamentary business” with a definition of “parliamentary purpose” to maintain consistency with the directions by the Speaker, which have replaced the phrase “parliamentary business” with the phrase “parliamentary purpose”.
Subletting of Wellington continuous accommodation
A new clause has been inserted into the determination to place a limit on the Wellington continuous accommodation payment where a member sublets their accommodation when they are not in Wellington.
Accommodation services outside Wellington
Members now have the ability to claim expenses in respect of accommodation outside the Wellington commuting area if they could not reasonably be expected to travel to their home base by conventional methods or safely. This clause meets modern health and safety obligations and it enables members to travel to and from remote locations or locations where conventional transport is limited, particularly in the evening and at night.
Providing accommodation payments for members vacating seat
The Speaker’s Directions provide travel and communication services for members for a period of 4 weeks after they have vacated their seats at a general election or during a parliamentary term. To support this entitlement, this determination has provided accommodation services to members for 4 weeks after they vacate their seat so that they can attend to matters associated with leaving Parliament.
Spouse or partner and child travelling on non-scheduled service
The clause covering travel by family members has been amended to enable family members to travel on non-scheduled air, rail, ferry, and non-urban bus services throughout New Zealand if the travel has been approved for the member under directions by the Speaker of the House of Representatives.
Removal of limit on child travel
Some members felt that the limit placed on a child’s travel was too restrictive. While it does not appear to be a huge demand, for those members impacted it is a serious issue. Therefore, the Authority has removed the limit on the number of one-way trips that may be taken by a member’s child who is under 18 years old.
Mileage claim for spouses and partners when they travel to join member
A new clause has been inserted into the determination to entitle a spouse or partner to be reimbursed for mileage and vehicle operating costs when travelling by private car connected to an activity undertaken by the member for a parliamentary purpose. The rate of reimbursement is the same as that provided to the member under directions by the Speaker of the House of Representatives.
Section 32(1) of the Act requires that once in each term of Parliament the Authority must make a determination on the accommodation services for members and Ministers as well as the travel services for their family members. This determination commences on 20 September 2020 (ie, the day after the general election) and is intended to endure for the following 3 years. However, should the need arise, amendments to address specific issues may be issued during the period of the determination.
Note: The preceding explanatory memorandum should be read in conjunction with the explanatory memorandum(s) appended to the: