PM orders rethink on allowances

By COLIN ESPINER - Political editor - The Press

Prime Minister John Key has ordered a review of ministerial housing allowances after revelations that three of his ministers are claiming hefty accommodation expenses despite owning properties in Wellington.

Housing Minister Phil Heatley has collected $24,607 from the taxpayer in the past six months, or about $946 a week, despite already owning an apartment in central Wellington.

He also owns two homes in Whangarei, according to the MPs' register of pecuniary interests.

Foreign Minister Murry McCully and Trade Minister Tim Groser also own apartments in Wellington, but claim allowances from the taxpayer to live in larger apartments.

All three rent out their own apartments, pocketing the proceeds.

McCully claimed $12,865 for his new apartment, plus another $6000 for his one-bedroomed property. He also owns a holiday home in Whangarei through a family trust.

Groser claimed $7200 for his apartment before moving into a larger dwelling and has collected $8937 in expenses for living in that property so far this year. Groser also owns an apartment and a hotel room in Auckland.

McCully and Heatley are electorate MPs who formally live outside Wellington, while Groser is a list MP who lives in Auckland. All are on salaries of $243,000.

The spotlight on the three ministers' claims follows scrutiny of Finance Minister Bill English's claim of $23,763 to live in his own home in Karori. The Clutha-Southland MP gets the money because technically his primary home is in Dipton.

Key announced the review of the expenses system at his post-Cabinet press conference yesterday after several journalists began making inquiries about Heatley, McCully and Groser's claims.

Key said he did not believe any of his ministers were breaching the rules, but it was clear that "arcane" expense rules were leading to some "perverse" outcomes.

"They do not necessarily drive, in my view, the best outcomes, either for the taxpayer or the ministers themselves."

Key, who uses Premier House some nights during the week but does not claim any housing allowance, said: "There are huge demands on them [ministers] and the hours they work.

"Most New Zealanders would support me in my desire to see the marriages of my Cabinet ministers remain intact, and housing plays a part in allowing them to unify their families in Wellington.

"Having said that, I'm quite conscious of the issues the media have raised and I think the New Zealand public are entitled to answers to those."

Key said he had asked for terms of reference for the review by the end of this week. He expected changes would result.

It was logical that where ministers already owned Wellington properties they stayed in them, and there was a "very strong argument" that those who rented theirs out should receive a lower housing allowance, he said.

He would not have his ministers "persecuted" by the media.

"Let's put things on the table here. You are on the one hand arguing that Bill English shouldn't have stayed in his property and you're actually arguing Phil Heatley shouldn't have moved out of his," Key told reporters.

"You can't have it both ways."

A spokesman for Heatley said the minister owned a small apartment in Wellington, which he lived in while in Opposition. After becoming a minister he wanted to move his family, including three children, to Wellington.

"He wanted to have his family in Wellington, and they needed to be housed. The apartment was not big enough," the spokesman said.

"His advice was he was entitled to be housed. He recognises there is a cost to this and he is very appreciative of it."

A spokesman for McCully said the minister owned a one-bedroomed apartment that was not suitable for entertaining foreign dignitaries and other guests, so a larger apartment had been found.