MPs are in line for a 10 per cent pay rise as compensation for losing international travel perks, but may also lose other allowances as officials try to rein in the soaring cost of running Parliament.

A review of parliamentary expenses has recommended ending the travel perk, in which up to 90 per cent of MPs' overseas airfares are paid for them and their spouses on private trips.

But the report by the parliamentary appropriations review committee also said MPs' salaries should be adjusted by 10 per cent to recognise the loss of the entitlement.

The travel perk costs taxpayers about $600,000 a year. A 10 per cent salary increase for MPs would cost an extra $1.7 million.

But other savings could be made through recommendations to curb costs of MPs' families' domestic travel and accommodation.

The Unite union, which represents 9000 workers, last night attacked the pay rise recommendation, saying it was unfair as many workers - particularly lower-paid people - were struggling as a result of rises in petrol prices, GST and electricity bills and the Emissions Trading Scheme coming to effect.

Union general secretary Matt McCarten said it was unbelievable.

"It would make every New Zealander vomit in their Weet-Bix tomorrow morning. They put themselves out to be a cast of workers who are treated differently from others.

"Most New Zealanders are struggling. They don't enjoy any perks - they don't get any allowances or anything like that. It's not fair."

Speaker Lockwood Smith has defended the travel perk as a way of increasing MPs' remuneration without raising salaries.

The recommendation to end it was one of several in the committee's three-yearly review of spending on services to Parliament and MPs, which has gone from $54 million in 1991 to almost $140 million last year.

That increase and the tight economic environment meant it was time to constrain parliamentary spending, said the committee's chairmen and the report authors, former Speaker of the House Sir Doug Kidd and economist Philip Barry.

The committee also recommended ending new MPs' right to claim money for out-of-Parliament offices or Wellington housing they, a relative or other interested party own.

"Ownership of these premises exposes the MP to the suspicion that they are seeking to achieve private benefit at the public expense," the committee said.

MPs already claiming entitlements for their Wellington homes or electorate offices should continue to receive the allowance but at 80 per cent of the current rate.

The report also recommended curbing the amount of domestic air travel for MPs' spouses and for children under 5 that the Parliamentary Service should pay for.

The committee suggested a number of return flights "capped at a number appropriate to the life of MPs and their families in modern times".

MPs' salaries and the value of perks they receive are considered and set by the independent Remuneration Authority.

Early last year, Prime Minister John Key wrote to the authority requesting a zero increase in MPs' salaries to send "a pretty strong signal" that restraint was necessary in the public sector.

But yesterday, the committee said the current method of setting allowances and entitlements lacked transparency and accountability, and the uncapped international travel perk meant MPs could influence the level of their total remuneration package.

It said MPs should consider whether they should continue to be involved in determining the benefits they received - a job that may be best done by an independent MPs in line for 10pc raise

authority. Green Party Co-leader Metiria Turei supported the call for an independent authority "that the public can have confidence in" to set allowances.

"This report highlights issues that we have been concerned about for a long time such as the need to separate private benefits from legitimate work expenses," Ms Turei said.

The report comes after almost a year of controversy over MPs' and ministers' perks, entitlements and expenses.

Mr Key had not seen the report yesterday and could not comment, a spokesman said.

Dr Smith said he would give appropriate consideration to the committee's recommendations but it was too early to say which ones would be adopted, and some might not be.

Taxpayers paid 90 per cent of airfares for him and his wife to fly to London to see son and grandchildren, making up part of a $44,411 travel bill for that period.
* Report recommends this should be banned.

Taxpayers paid almost $22,000 - 90 per cent of the airfares - so his girlfriend Louse Crome could accompany him on a holiday to Hawaii, and then on a ministerial trip to Britain, Canada and the US. Repaid in full.
* Report recommends this should be banned.

When he was a backbencher, he used to claim up to $24,000 a year in MP accommodation expenses on the mortgage interest for his Wellington apartment.
* Report recommends stopping payment towards MPs' mortgages for Wellington accommodation, allowing it for hotels and rental accommodation only.


Claimed $913 a week to live in his own house in Wellington, which was leased to the Government as an official residence. Repaid ministerial housing allowance.

Put more than $6000 of personal expenses, including hiring 50 pornographic movies, on his ministerial credit card. Repaid in full.

- Additional reporting by Vaimoana Tapaleao