The Dim-Post

November 11, 2013

All within the rules

Filed under: Politics — danylmc @ 8:30 am

Keith Ng is inside our MP’s Land Information property records and killing their dudez. Short version: when the rules around MP disclosure were drawn up it was decided that politicians didn’t have to declare assets held by managed superannuation schemes because it was ‘too cumbersome’. Which is very reasonable. I have savings in the NZ University Super Scheme, which means I have investments in shares and property and stuff, but I don’t have any granular control over it, or any influence on what the scheme invests in. So when I become MP for Ohariu I won’t have to declare any of it.

But a bunch of MPs – 35 National, 5 Labour – have set up their own private super schemes so they can have detailed knowledge of what they own, full control over how it is invested, and not have to declare any of it to the public. The Herald’s story today is about property and documents an impressive feat in quadruple dipping:

  1. MPs get paid an accommodation allowance for a residence in Wellington
  2. Which they pay to themselves because their superannuation account owns the property that they’re renting
  3. Contributions they pay into the account pay off the mortgage on the property and for every dollar they pay in the taxpayer contributes $2.50
  4. None of this taxpayer funded windfall is taxed because we don’t have capital gains in New Zealand because it would destroy our economy.

Yeah, yeah. It’s ‘all within the rules’. It’s just that MPs are the only people in the country who get to draw up rules like these for themselves.

Irritating: National’s constant hectoring on belt-tightening and state-sector cutbacks when they’re exploiting loopholes like this to stuff their own pockets with taxpayer cash.

Interesting, possibly very interesting: How many MPs own undeclared shares inside these private super schemes?

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30 Comments »

  1. Greens do this too. They were even caught double dipping when two of them were living together in the same house and both claiming the full rent from the taxpayer.

    Comment by James — November 11, 2013 @ 9:12 am

  2. More to the point – What right has the Herald firstly to hold, secondly to mine all NZ real estate data looking for these connections? Surely there must be a massive breach of private information here that they would do well to report.

    Comment by pmofnz — November 11, 2013 @ 9:24 am

  3. James, the Greens used to, until 2009. Two MPs had houses owned superannuation funds. This was all open and declared – none of it was hidden. They then made the very wise decision that some loopholes shouldn’t be exploited.

    Comment by George D — November 11, 2013 @ 9:31 am

  4. James, Yes the Green did it and faced a lot of criticism for it, both from the public and from the National MPs. If you read the article it specifically states that the Greens did this, it was in the rules then and now, but they have stopped a while back. Since then 40 MPs, 35 of them National MPs, have continued to do the exact same thing. Each one of them is a hypocrite, or at best horribly unaware of the public mood. You’d think after the outcry about the Greens they’d change their ways to avoid the same thing happening to them.

    All this aside “But they did it too” lacks any relevancy when the other person is no longer behaving that way. It’s a schoolyard excuse where one bully justifies his behaviour because “But John hit Pete last year, why are you picking on me?”

    Comment by Greville — November 11, 2013 @ 9:37 am

  5. “… Surely there must be a massive breach of private information here that they would do well to report…”

    Oh, the irony.

    Comment by Sanctuary — November 11, 2013 @ 9:39 am

  6. Quoth pmofnz, More to the point – What right has the Herald firstly to hold, secondly to mine all NZ real estate data looking for these connections? Surely there must be a massive breach of private information here that they would do well to report.

    Nah. It’s just metadata.

    L

    Comment by Lew (@LewStoddart) — November 11, 2013 @ 9:42 am

  7. pmofnz: it’s not “real estate” data – it’s land title register information, and it’s not private at all.

    Comment by Hamish — November 11, 2013 @ 9:42 am

  8. Ah yes I see they sold their houses, but as this article suggests, it was probably so they could pay out the superannuation for leaving mp’s. They still defend their right to do it. http://www.stuff.co.nz/national/politics/2949590/Greens-defend-housing-arrangements

    Comment by James — November 11, 2013 @ 9:48 am

  9. Surely there must be a massive breach of private information here that they would do well to report.

    Q: Is it a breach of privacy to search publicly available records?
    A: No.

    Comment by danylmc — November 11, 2013 @ 9:59 am

  10. So when I become MP for Ohariu I won’t have to declare any of it.

    Correct me if I’m wrong; you will have to declare the existence of your savings in the NZ University Super Scheme, and the value of said savings, but not the ‘look through’ of what the scheme is invested in?

    1.MPs get paid an accommodation allowance for a residence in Wellington
    2.Which they pay to themselves because their superannuation account owns the property that they’re renting

    I don’t think these two steps are much of a problem at all. It’s the tax advantages which stink.

    Comment by Phil — November 11, 2013 @ 10:02 am

  11. I don’t think these two steps are much of a problem at all. It’s the tax advantages which stink.

    I guess its the background. National made a really big deal out of it when they found the Greens were using this loophole five years ago, and made them stop and pay the money back. And yet . . .

    Comment by danylmc — November 11, 2013 @ 10:13 am

  12. And the disclosure matters here – these are the people deciding whether or not have, say, tax xapital gains.

    Comment by lyndonhood — November 11, 2013 @ 10:19 am

  13. James – Last updated 2009. You material is getting a bit stale, you might need to get something new.

    Comment by Alex Braae — November 11, 2013 @ 10:25 am

  14. DanylMc @ 0959
    “Is it a breach of privacy to search publicly available records? No.”

    The release of LINZ real estate data says that is iaw the Privacy Act 1993 which says:

    Privacy Act 1993 Clause 59 Public register privacy principles …

    Principle 2
    Use of information from public registers
    Personal information obtained from a public register shall not be re-sorted, or combined with personal information obtained from any other public register, for the purpose of making available for valuable consideration personal information assembled in a form in which that personal information could not be obtained directly from the register.

    I do wonder after telling the world that they’ve merged two public datasets to get at the personal info, how Granny will explain that to the Privacy Commissioner.

    Comment by pmofnz — November 11, 2013 @ 10:26 am

  15. I do wonder after telling the world that they’ve merged two public datasets to get at the personal info, how Granny will explain that to the Privacy Commissioner.

    Public interest.

    Comment by Psycho Milt — November 11, 2013 @ 10:37 am

  16. I do wonder after telling the world that they’ve merged two public datasets to get at the personal info, how Granny will explain that to the Privacy Commissioner.

    By saying they haven’t breached Privacy Principle 2 … you ignore the pretty important “for the purpose of making available for valuable consideration” point.

    If the NZ Herald was charging a fee for telling anyone who wants to know if their neighbour also owns other property, you’d have a point. But they’re not.

    Comment by Andrew Geddis — November 11, 2013 @ 10:43 am

  17. What right has the Herald firstly to hold, secondly to mine all NZ real estate data looking for these connections?

    Is it this one?…. LINZ will basically grant access on condition of a recipient agreeing to a retraction clause, to ensure that copies of the dataset are updated according to people’s requests to correct information, or opt out from being included.

    Comment by izogi — November 11, 2013 @ 10:54 am

  18. Phew. Thanks Andrew! I’d only considered what we were doing in relation to the LINZ data licence, I didn’t realise Privacy Act was in play as well.

    Though push come to shove, I think we can argue that property titles and property owners data are both derived from the same authoritative dataset (i.e. Titles). They are, in a sense, just linked tables separated out for convenience. Also, I think that other organisations do the same thing (linking titles and owners), specifically for the purpose of selling that information.

    Comment by Keith Ng — November 11, 2013 @ 10:58 am

  19. izogi: Yes, that one.

    Comment by Keith Ng — November 11, 2013 @ 10:59 am

  20. A subtle difference between this and the Greens case for those who enjoy frothing at the mention of the word “loophole”. In the greens case there were two Green MPs living in the same house and both claiming market rent of $500 per week (from memory). This is otherwise known as double dipping and some $6,000 was eventually refunded. One of the MPs involved was that nice little old lady with a mouthful of unmelted butter, Jeanette Fitzsimons. Can’t remember the other one but “Delahunty” rings some sort of bell.

    But hey, don’t let the facts get in the way of a good rant guys.

    Comment by DavidW — November 11, 2013 @ 11:03 am

  21. I don’t have a problem with any MP in Parliament doing it under the current rules, wits mild caveat around the tax issues. When the Alliance was around party president Matt McCarten required MPs to live in the same house – in one of Wellington’s most expensive streets – and I understand any profit went to the Party not the MPs. That seems to me to be me more questionable. Parties have I think – at least in the past – also owned electorate offices

    Comment by Tinakori — November 11, 2013 @ 11:06 am

  22. So the only “defence” on here has been feeble attempts at “somebody else used to do something like it”.

    That amply demonstrates how indefensible this is.

    Comment by sammy 2.0 — November 11, 2013 @ 11:14 am

  23. Even if (a big if) all of this is in breach of privacy law, I’d *love* for an MP to try to shut it down. Purely for the hilarious irony.

    Comment by Ben — November 11, 2013 @ 12:04 pm

  24. The Herald makes a huge mistake when it says, “For example, John Key’s “blind trust” means his name never appears on a property record. But through tracking down known addresses such as his electorate office, we were able to follow his trustees to discover other properties he owns through that trust.

    That’s so legally wrong it throws the entire methodology into disrepute, saved only by the admissions of the MPs concerned.

    Comment by Nick K — November 11, 2013 @ 1:43 pm

  25. Seems like a pretty obvious loophole. Should have been closed from the start. Whatever assets you have, you should have to delcare them apart from “assets” that depreciate in value quickly such as motor vehicles, clothing items, other personal chattels. But to have to declare it when you have more than $50,000 in an offshore account, and not have to declare money that you have invested in a superannuation scheme that you effectively have control over, is ridiculous.

    Comment by Daniel Lang — November 11, 2013 @ 3:27 pm

  26. A simple solution would be a 100% tax rate on income from things that are not declared as assets. That way any “accidental” or “incidental” gains wouldn’t be a problem.

    “they did it first” only works as a defense if at the time you stood up for the behaviour. If you were part of the pack howling for blood it’s only reasonable that when you’re caught doing the same thing you resign as an MP on the grounds that you’re not fit to hold the office. I recall hearing that being asked of the Green MPs. It’s only right that if someone who thinks that when caught you should resign, gets caught…

    Comment by Moz in Oz — November 11, 2013 @ 5:04 pm

  27. #23: Indeed. “They did it too” isn’t so much a defence as it is a fallacy.

    It’s all perfectly legal, but at the same time it comes across as hypocritical. What’s the whole bloody point of austerity, if those beating us about the head with it aren’t pulling their own weight? By then, it’s no longer austerity, but more like something out of pre-Revolutionary France. What’s also hypocritical is whingeing about digging up Parliamentary financial records, while also giving carte blanche to cyber-spooks.

    It’s the hypocrisy, stupid.

    Comment by deepred — November 11, 2013 @ 7:16 pm

  28. It’s all perfectly legal, but at the same time it comes across as hypocritical. What’s the whole bloody point of austerity, if those beating us about the head with it aren’t pulling their own weight? By then, it’s no longer austerity, but more like something out of pre-Revolutionary France. What’s also hypocritical is whingeing about digging up Parliamentary financial records, while also giving carte blanche to cyber-spooks.

    Comment by deeggf — November 12, 2013 @ 11:58 pm

  29. Spam-bot alert. I hope it’s not the GCHQNSAB in disguise.

    Comment by deepred — November 13, 2013 @ 7:40 pm


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