Thursday, October 29, 2009

Not acceptable

The Auditor-General has reported back on their inquiry into Bill English's Ministerial housing rort. English, you may remember, was charging the taxpayer $700 a week for living in his own house, on the fiction that he had no financial interest in it (and he really lived in Dipton anyway, despite having actually lived in Wellington for over a decade). The Auditor-General concludes that there is no need for a further inquiry - something English is attempting to spin as exoneration. But reading the report, it is anything but. The Auditor-General actually found that English's legal advice was "not applicable to this situation and was based on too narrow a test" and that Ministerial Services should not have accepted it:

Ministerial Services accepted Mr English’s declaration, although it was aware that the advice attached to it might not be directly applicable. It proceeded to get a market evaluation of the rent and to finalise a lease between Ministerial Services and the family trust for the house. The result was that the Crown was renting a property for Mr English from a trust in which he had an interest, and the arrangement was explicitly based on a view that he did not have an interest. Clearly, this was unfortunate. We emphasise that the Minister’s declaration was based on advice. However, in our view, the advice was not directly relevant to this situation. We consider that Ministerial Services should have raised this with the Minister.
So why did they recommend no further investigation? Because the changes to the system make the point moot. Now Ministers will be paid $37,500 a year to live in their own houses, no questions asked.

Meanwhile, the real question - whether it is acceptable for taxpayers to pay MPs and Ministers to live in their own houses - has been ignored. I think it is not acceptable, and I regard the Auditor-General's statement that English's arrangement of renting his own home from his family trust - an arrangement which coincidentally allowed him to work around the limit on paying only interest on mortgages, and get taxpayers to buy him a fancy new home in Wellington - were "not exceptional" to be an indictment on our current system for Parliamentary expenses. It is one thing to give MPs the actual, reasonable and necessary expenses required for them to do their jobs properly; it is quite another to pay them to live in their own homes or give them a free leg up on the Wellington property ladder (and taxpayer-subsidised capital gains) as a perk of office. These are simply rorts, ripping off the taxpayer, and they bring our entire political system into disrepute. But as we've seen time and time again, our political "leaders" are quite happy to do that to feather their own nests.

According to the Speaker, the system will be reformed. I await those reforms with interest. But I don't expect much. Given the precedent set for Ministerial expenses, where the accommodation allowance is basically a stealth pay rise of about twice the present average cost [PDF], I expect the Speaker to rubberstamp similarly greedy and non-transparent arrangements. And then politicians will wonder why the public does not trust them and regards them as lower than dogshit and less trustworthy than Nigerian spammers or used-car salesmen. They will have only themselves to blame.