PM acts after criticism of MPs' control of perks

Prime Minister John Key. Photo / Mark Mitchell

Prime Minister John Key has moved to give the Remuneration Authority more control over setting MPs' perks and entitlements after a further call for an end to the days of MPs having control over their own entitlements.

Mr Key announced the government would introduce a law change to give the Remuneration Authority control over setting MPs' entitlements beyond the base salary.

Currently the independent Remuneration Authority sets only the base salary of MPs. The Speaker and Prime Minister remain in charge of deciding on other allowances and perks - including travel, accommodation, and office resourcing.

Mr Key's move follows a review of the system released by Law Commission president Sir Geoffrey Palmer today. That review recommended the independent body should determine travel, accommodation and communications services for MPs. It said the current system lacked transparency and independence.

Although Mr Key has moved swiftly, the extent to which he intends to give the Remuneration Authority more control remains unclear. He said he would consult with other parties and the Speaker on matters such as the make up of the Remuneration Authority and exactly what matters would be handed over to it.

"In making this change, it will be important to ensure that the needs of Ministers and MPs to carry out their responsibilities continue to be met," says Mr Key.

He hoped to pass new legislation by the end of next year.

It follows a fraught year for MPs and their perks - the Speaker has moved to ditch the international travel perk after a series of MPs were embarrassed for their use of it, the most recent forcing the resignation of Pansy Wong.

The report, tabled today, says the system can't be fixed by tinkering with it.

"We just can't go on like this," former Law Commission president Sir Geoffrey Palmer told NZPA.

"MPs are put under pressure by the system itself, it isn't fair to them and it isn't fair to the public.

"They are often under suspicion... because they are involved in setting the amounts themselves."

The report says fundamental change is needed and it recommends replacing the Civil List Act, which authorises payments to MPs, with new legislation which it has written as a draft bill.

It recommends the Remuneration Authority, which sets MPs' salaries, should handle entitlements and allowances and that two specialist members, one a former MP, be added to it.

"I'm really trying to help the system, not hurt it," said Sir Geoffrey, who held office while the report was prepared.

"It's got to be clear, it's got to be transparent, and it's got to be set by a third party."

He believes the most important point MPs should consider is the public's trust in the quality of New Zealand's democracy.

"If the elected representatives in our central democratic institution don't have public respect, then our whole system becomes much more fragile," he said.

The commission consulted all the parties in Parliament while it was working on the report.

Sir Geoffrey said a number of the small parties accepted it, but the attitude of the main parties wasn't clear.

The report says Parliament's Speaker, Lockwood Smith, has "real reservations" about an independent body setting MPs' entitlements.

"He is particularly concerned that an independent body would not understand the needs of Parliament," it says.

"His strong preference would be to continue to use the mechanism of the Speaker's Directions which are flexible, easy to amend and draw on the experience of the Speaker."

Sir Geoffrey said the report carefully reflected Dr Smith's view "but we don't agree with it".

The commission also says the Parliamentary Service, which makes payments to MPs, should be opened to the Official Information Act (OIA).

This has been previously rejected as well, although parties have started voluntarily issuing details of their MPs' expenses.

"While the move to greater transparency is commendable, and provides more information about the total spending of MPs, in some respects the disclosure still lacks transparency," it says.

"The figures do not distinguish between domestic and international flights, or separately identify travel paid for an MP's spouse or partner and dependant children...clearly, a voluntary regime is not the same as a statutory requirement."

It has not included that requirement in its draft bill, saying it will issue a separate report on the OIA next year.