Bill English to pay back part of allowance

Bill English has lived in this Wellington house with his family for two years. Photo / Mark Mitchell

Deputy Prime Minister Bill English has decided to pay back part of his ministerial housing allowance to Ministerial Services, saying that as Finance Minister he had to lead by example.

He will receive an accommodation allowance on the same basis as out of town MPs who live in Wellington.

"I understand that this does not look good," he told reporters on the way into Parliament.

On the basis of what he has received so far, that means he will be paying back about $12,000 of the nearly $24,000 he has received in the past six months.

It was not any acknowledgment that he had done something wrong.

"The fact is that no amount of detail will change the perception that in some way I am gaining a bigger allowance than other members of Parliament.

"So I have decided to deal with that perception. I'm a minister of Finance. It is my job to lead by example so I will be getting in touch with Ministerial Services to pay back the difference between the rate I am on and the other rate going back to the election."

Mr English has been at the centre of the housing allowance storm since it was revealed he was being paid about $900 a week to live in his own family home in Wellington.

That is almost double the amount ordinary out-of-town MPs can claim on Wellington accommodaiton.

While it was well within the rules for Mr English to claim the new amount when he became a minister, his housing circumstances had not changed, he had had a hefty pay increase, and he is preaching restraint to the rest of the country.

Mr English and his wife and six children have lived there for about two years and it is owned by a family trust.

Before qualifying for the ministerial allowance it was deemed an official ministerial residence and leased by the Government and provided back to the Mr English.

He said it did not look good and no matter what the technicalities were, "that is not a sustainable position."

Two other ministers, David Carter and Pita Sharples, are staying in their own Wellington flats and are limited to $24,000 a year or $460 a week.

Other ministers are housed in Government-owned property or in apartments paid for by Ministerial Services in the Department of Internal Affairs and the guideline for their rent is about $700 to $750 a week.

No one else is in the same situation as Mr English.

Mr English said his decision to pay back the money did not set a precedent for other ministers.

"I am in a unique situation."

He said he had not spoken about it with Prime Minister John Key, who is in Cairns.

Meanwhile, the review into ministers' accommodation expenses will be complete by the end of the month.

Prime Minister John Key ordered the review after concerns were made about double dipping on allowances after MPs' travel and accommodation costs were made public on June 30.

That move followed outrage in Britain when details of politicians spending were made public.

The Internal Affairs Department will conduct the review into the rules that cover ministerial housing.

Some MPs are getting market rates on Wellington properties they own, while claiming allowances to live in different properties.

In several cases MPs rented apartments to colleagues who would pay them in allowances.

Internal Affairs executive government support general manager Janice Calvert issued the terms of reference today.

They said the review would identify:

* how to ensure criteria for ministerial accommodation were simple, easy to understand, transparent and cost effective to administer;

* how to ensure value for taxpayer money;

* ensure ministers and their families get suitable accommodation in Wellington.

"It is intended to review all aspects of the delivery of accommodation services based on a best value for money principle," Ms Calvert said.

Review results would identify possible accommodation services options and would recommend either:

* keeping the current model;

* amending the current model giving options;

* replacing it all together or in part;

* giving timeframes for implementation of changes;

* address other issues that arose from the review.

The report would go to Mr Key by August 31.

- additional reporting by NZPA