John Armstrong: Ministers' sacrifice not so demanding after all

It is one of the oldest bureaucratic tricks in the book.

A Cabinet minister has a thorny problem to solve. The minister sends his or her officials away to look for answers. They come back with a number of options.

The list always includes the status quo which, of course, isn't an option.

That leaves the cheap but unworkable option; the in-an-ideal-world, but much too expensive option; and, naturally, the sensible, in-between compromise option.

The latter picks itself. It makes the minister look like he or she has adopted the offend-the-least-people-as-possible, middle-of-the-road solution.

Or at least the solution officials wanted the minister to adopt all along.

In the case of the Prime Minister's review of ministers' accommodation allowances, his officials presented him with the option he could hardly refuse as he sought to smother the political firestorm surrounding Bill English's claiming up to $47,000 in taxpayers' money to live in his Wellington family home.

The review's recommendation - which John Key has accepted - will see out-of-Wellington ministers get a fixed payment of $37,500 a year as a housing allowance.

That is some $10,000 short of the most expensive option - the $48,000-plus estimate of the financial value of residing in one of the existing rent-free Crown-owned or leased ministerial houses which will now be sold or vacated when leases expire.

"Ministers would ... be making a financial sacrifice in recognition of the current economic climate," the report says of its recommendation.

Just how much of a sacrifice?

The $37,500 is still more than $13,000 above the cheapest option - the $24,000 maximum to which an ordinary MP is entitled and the level to which English voluntarily lowered himself.

Having made the gesture to go down to $24,000, English now finds himself in a separate category where he can claim $30,000 because he is staying in the same home for which he is currently claiming the parliamentary allowance.

He ends up slightly better off than he has been but worse off than he was.

You can bet there was some equally fast arithmetic at work around the Cabinet table when ministers saw the various options.

Some will be worse off. Some may be better off.

It largely depends on personal circumstances - whether a minister shifts his or her family to Wellington, the number of children and so on.

However, assessing the degree of sacrifice requires a second look at the $48,295 estimate of the value of living in an existing ministerial house.

Of the $48,000-plus estimate, more than $8000 consists of phone, electricity and gas bills, hire of cleaners and gardeners and purchase of chattels.

Which leaves around $40,000 - which is not far off the $37,500 to which most ministers will be entitled and is not so middle of the road.

What ministers will effectively be losing are some perks attached to ministerial houses which were always questionable.

They will still be getting $721 a week to help pay the rent.

Plenty enough for a fully furnished, three-bedroom home in a leafy Wellington suburb like Wadestown or Karori.

Some sacrifice.