The Dim-Post

November 12, 2013

Focus

Filed under: Politics — danylmc @ 7:55 am

Today’s installment in Keith’s/The Herald’s MP property ownership investigation is interesting, but so far the really big revelation which we need answers on is yesterday’s finding that a majority of the National caucus and 6 MPs in the Labour caucus have these very unusual private investment funds that almost no one else in the entire country has, and that we have no idea what’s hidden inside them. Maybe it’s nothing and there are advantages to these funds that have nothing to do with transparency. But then again, maybe they all own shares or private companies that directly benefit from the decisions and votes they make as MPs and Ministers and they should all resign and be prosecuted for corruption! It’d be nice to know.

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31 Comments »

  1. Isn’t this exactly the same as the Green MP housing rort from a few years ago and if so it’s not a new rort by our beloved political overlords, just the usual run of the mill feather bedding we have come to know and love from the adorable Wellington troughanista.

    Comment by TransportationDevice A7-98.1 — November 12, 2013 @ 7:58 am

  2. ‘The other guys are doing it’ isn’t an especially good excuse, and ‘the other guys WERE doing it (but have now stopped)’ is an even worse excuse.

    Don’t get me wrong, the Greens deserved to be criticised, especially when they try to position themselves as uniquely ethical, but that doesn’t mean other parties get a free pass.

    Comment by Hugh — November 12, 2013 @ 8:03 am

  3. Isn’t this exactly the same as the Green MP housing rort from a few years ago

    Sort of. Slightly different in that the National Party alleged that it was corruption and the Greens apologised and paid the money back, and now this is the National Party doing it and insisting that it isn’t corruption and not apologising or paying anything back.

    Comment by danylmc — November 12, 2013 @ 9:04 am

  4. 3.Isn’t this exactly the same as the Green MP housing rort from a few years ago

    Sort of. Slightly different…

    The two examples are different in the same way that tax avoidance is different from tax evasion. Both make you look like an asshole, but only one will get you sent to jail.

    Comment by Phil — November 12, 2013 @ 9:56 am

  5. Also, the use of the device to maximise the benefits of taxpayer subsidies to individual MPs may be similar (and thus equally worthy of condemnation … if not more so, as it was done after the prior criticism of the Greens, so those doing it can hardly claim “we didn’t realise there was a problem”). But apparently only a few of the MPs with these private super funds are using it for this purpose. So the rest are doing something with them that is different to what the Greens did over a parliamentary term ago. Maybe that something is OK. Maybe its not. The question does seem worth asking, but.

    Comment by Andrew Geddis — November 12, 2013 @ 10:02 am

  6. Interesting to see the National MPs involved gibbering about having their own private superannuation scheme for “genuine investment reasons.” I tend to invest my money under the mattress so am unqualified to guess at what “genuine investment reasons” one might have for creating one’s own superannuation scheme. There seems to be an excellent, genuine reason for it in the case of MPs who’d prefer not to declare their interests or publicise the fact that they’re robbing taxpayers blind, but it’s hard for an investment ignoramus to see other excellent, genuine reasons for it. Any less ignorant types commenting who could provide some?

    Comment by Psycho Milt — November 12, 2013 @ 10:23 am

  7. Maybe it would be easier for said MPs to articulate the faux investment reasons that they are studiously avoiding?

    Comment by Gregor W — November 12, 2013 @ 10:29 am

  8. The “genuine investment reasons” are that they genuinely get a heap of taxpayer money given to them when they invest this way…

    Comment by garygoodguy — November 12, 2013 @ 10:38 am

  9. I read somewhere an MP saying they wanted to list all their assets but were instructed not to because it wasn’t required for the register. I think a reporter should give them the opportunity to list their assets elsewhere in a public forum – if they’re so willing to be open they don’t have to restrict themselves to a register with limiting rules.
    I’m pretty sure there’s no law forbidding personally revealing your assets to the public. Of course they’d reveal all the assets their fund ever owned, not just what will be in it come next Friday.

    Comment by Fentex — November 12, 2013 @ 11:05 am

  10. There was one significantly different thing about what the Green MPs were up to.
    The complaints were about the fact that TWO MPs were claiming an accomodation allowance, of the absolute maximum amount incidentally, for the SAME property.
    Fitzsimmons was renting the property from the Green Party Super fund. A friendly valuer said it was worth the maximum amount that was allowed and that amount was paid to the party Super fund. When Delahunty got elected she moved into the same property and claimed that she was also entitled to have that amount paid into the Super fund. When picked up on that fact that two people were claiming the same thing she tried an innocence act and implied that this was much to complicated for a poor simple MP to be able to keep track of.
    Actually claiming it was far to complicated for her to understand was about the only believable part of the whole affair.

    Comment by Alwyn — November 12, 2013 @ 11:56 am

  11. The complaints were about the fact that TWO MPs were claiming an accomodation allowance, of the absolute maximum amount incidentally, for the SAME property.

    Which the Greens admitted was wrong, and repaid the extra payment:

    Mrs Turei said the four months this year when two MPs mistakenly both paid full rent on one property instead of sharing the cost was fixed in June and the extra money paid back this month, and while it was a genuine error it had contributed to the confusion.

    https://www.greens.org.nz/press-releases/greens-superannuation-fund-sell-houses

    Now, no doubt you’ll roll your eyes and say “yeah – a mistake – right”. That’s OK. But the fact you are still bringing it up 4 years later in relation to similar actions by another political party also let’s us doubt your motives for doing so.

    Comment by Flashing Light — November 12, 2013 @ 1:16 pm

  12. But the fact you are still bringing it up 4 years later in relation to similar actions by another political party also let’s us doubt your motives for doing so.

    The actions of the Green MP’s were not similar. They were, procedurally, worse.

    If the best argument ‘the left’ can muster is “hypocrite!”, then it’s a perfectly reasonable response to point out that the two cases have little similarity outside of fact they both involve houses.

    Comment by Phil — November 12, 2013 @ 1:39 pm

  13. Sorry Flashing Light but you are quite wrong when you talk about “similar actions by another political party”.
    They are not similar. The actions discussed in the articles in the Herald do not cover anything that was in any way dishonest. The actions of the two Green MPs were, in that they must have involved a false declaration by at least one of them, and a false claim for expenses that were never incurred.
    As for bringing it up, I don’t think I was. I am merely correcting the mistaken view of history being exhibited by some of the commentators, including yourself, on this subject.

    Comment by Alwyn — November 12, 2013 @ 2:10 pm

  14. In 2011 the Standing Orders Committee made the decision that MP’s did not have to reveal assets owned through ANY superannuation scheme; both public and private. Dame Beazley had suggested distinguishing between the two.

    I am not sure whether Anne Tolley was a member of the SOC at that time but if she was, or if any of the MP’s with private super schemes was, is that not a rather dubious Conflict of Interest?

    It fascinates me that there are only about 250 private investment funds in NZ and somewhere around 40 turn out to be owned by MP’s. Can anyone with economic and investment expertise ( I work in the public healths service so that excludes me) tell me what the “legitimate investment reasons” are for such arrangements?

    Comment by PPCM — November 12, 2013 @ 2:40 pm

  15. Why the hell does it matter what a couple of people in a political party did several years ago? That’s nothing more than a red herring.

    Surely the critical point here is that MPs of any flavour can, and sometimes do, knowingly have large financial conflicting interests with legislation that they’re charged with creating and voting on, and which they’re not required to declare.

    Whether you happen to prefer the “left” or “right” side of politics should be irrelevant. That set of rules and the mechanisms which enable it to occur need to be revised if NZ’s parliament can claim any reasonable integrity in the future.

    Comment by izogi — November 12, 2013 @ 2:57 pm

  16. If the best argument ‘the left’ can muster is “hypocrite!”, then it’s a perfectly reasonable response to point out that the two cases have little similarity outside of fact they both involve houses.

    And if the sum total of “the rights” critique of the Greens was that for a couple of months, two of their MPs carelessly made a claim for rent on the same property, then you’d have a point. But, of course, that wasn’t the sum total. The broad criticism of the Greens was that they were using the parliamentary superannuation scheme to inflate the returns on their scheme way above what ordinary joe and jane six-pack could get.

    (Take a walk back through this Kiwiblog post, if you need some reminding: http://www.kiwiblog.co.nz/2009/10/qa_exposes_greens_housing_scheme.html)

    Now it turns out that a bunch of MPs, predominantly National, are doing the exact same thing in secret, because “the rules” let them do so. And so, yeah … hypocrites.

    But, hey – how about them Greens, huh? Let’s talk a bit more about them! Aren’t they just shit??

    Comment by Flashing Light — November 12, 2013 @ 3:45 pm

  17. I don’t see why you are referring me to what David Farrar had to say about the Green Party in 2009, as if it made me a hypocrite. If you care to read Kiwiblog you will find that David is completely consistent. Your own reference will tell you what he said then.
    Today, or yesterday when discussing this Herald story he said that “My long standing view is that for MPs, they should not rent Wellington homes they themselves own (either directly or indirectly)”. I fail to see how you could call him a hypocrite, as he doesn’t appear to be changing his view on the matter.
    Equally, I don’t see that what Farrar said on Kiwiblog has anything to do with what I may say. For your information I am not David Farrer and indeed have never met David Farrar. I’m not responible for his views at all.
    I don’t actually have any objection to MPs renting properties they own, as long as the rent is fair market value, which was certainly NOT the case in the Green party case.
    On the other hand I do not believe that any list MP should be provided with any contribution at all for accomodation in Wellington. They don’t have electorates and they should be expected to move to Wellington to do the job they are being very well paid for. They should also get precisely zero to “electorate expenses” that they so asidiously claim. Electorate MPs are different, of course. They do have duties in their electorate and must be expected to share time between their electorate and Wellington.

    Comment by Alwyn — November 12, 2013 @ 4:08 pm

  18. @Alwyn,

    You’ll note my response was to Phil, who referenced “the left” as a homogenous entity. So a reference to “the right” in similar terms, with David Farrar as a representative figure, seems reasonable. Especially as, if you care to read the post again, you’ll see how scathing Farrar was of the sheer amount of money that the Greens made out of taking advantage of the superannuation wheeze. So alls I is sayin’ is, if yer sticking sauce on a goose, make sure you’ve got enough to cover the gander as well.

    And while it is true that after the Herald’s revelations he put up a single short post saying “My long standing view is that for MPs, they should not rent Wellington homes they themselves own (either directly or indirectly)”, I doubt we’ll see repeated posts going over again and again how much the various National MPs have made out of this “rort” (which is a term he also used in relation to the Greens). Maybe pigs will fly … but you DO have to remember that the Greens are shit, in a way National isn’t.

    In regards your particular position on MPs expenses … everyone is free to have their idiosyncratic views.

    Comment by Flashing Light — November 12, 2013 @ 4:32 pm

  19. Phil and Flashing Light. One suggestion is that you become undercover police. That way you can claim a deduction for your working clothes, a privilege denied the rest of us. You see – employment related factors will always seperate us from each other in terms of how various rules are applied. I would dearly love to claim a deduction for my suits and business shirts but can’t. Shit happens so get on with your own business and spend a little less time frothing about others.

    Comment by DavidW — November 12, 2013 @ 4:58 pm

  20. @David,

    The analogy is mind numbingly inane.

    Here’s what the National Party Ministers in question were able to do. They buy themselves a house, with a mortgage from a bank. Then they stick it into one of these personal superannuation schemes. Then,

    For every $1 placed in the private schemes by the MP, the taxpayer contributes $2.50 to a maximum of $28,920 – an annual superannuation total of up to $40,488.

    Combined with the taxpayer-funded accommodation allowances, a minister like Mrs Tolley could pay off up to $77,988 of the mortgage each year while also making a capital gain as the property’s value increases.

    A bit more than being able to write off the cost of a denim jacket and couple of Hallensteins T-shirts, no?

    You might also note that the MPs write their own rules letting themselves do this, as well as hide it from any sort of public scrutiny. Not many jobs where you get to do that, is there?

    Oh … and, they are my elected representatives, using my tax money to do this. So their business kind of is mine.

    Comment by Flashing Light — November 12, 2013 @ 5:24 pm

  21. On the other hand I do not believe that any list MP should be provided with any contribution at all for accomodation in Wellington. They don’t have electorates and they should be expected to move to Wellington to do the job they are being very well paid for.

    Unlike electorate MPs, List MPs are elected by people throughout New Zealand and they represent a variety of interests. It’d be interesting to see the correlation between where List MPs live and where the population lives, especially broken down by party lists because some parties probably try more than others to get a geographically distributed balance, but in general I think it’s completely reasonable for list MPs to live in places other than Wellington.

    Otherwise you’re advocating a high proportion of MPs to be completely based inside the Thorndon bubble, which is bad enough on its own without a high barrier for potentially good candidates who don’t already live there to actually put themselves forward to represent the ideals that people want to elect them for.

    Comment by izogi — November 12, 2013 @ 6:28 pm

  22. izogi
    Well for the Green Party at least there are no MPs in the North Island between Kapiti and Auckland except for Delahunty in the Coromandel.
    On the other hand Waiheke Island with a population of about 9,000 people has got 2 Green MPs apparently. I am assuming their CVs on the Green Party site are current.
    I don’t see why living in the Wellington area should be to much of a problem in getting candidates. I’m quite willing to have the state pay their moving costs in transferring. At the moment they are like the Cook Strait ferry crews of the 1970s. Live anywhere you like and have your employer pay for your travel costs, rather than live where your job is.
    It’s not as if they are going to have to quit a job and lose all their income by the move. I am assuming of course that they don’t have other jobs.
    They don’t need to live inside the Thorndon bubble as you call it. Wainuiomata has perfectly good homes at much lower prices.

    Comment by Alwyn — November 12, 2013 @ 7:41 pm

  23. Alwyn,

    I find it hard to believe that New Zealand’s lawmaking and representative processes would be better served by having some 55 MPs (51 list + the Wellington-area constituency MPs) semi-permanently based in the one city. In fact, I think that would be a really silly idea.

    Also, you’re missing the point a bit. Paying for a list MP to fly from (say) Dunedin to Wellington once a week isn’t much of a personal perk … unless your idea of glamorous excess is a 45 minute drive to the airport, 30 minutes in the Koru Lounge, then 90 minutes on a turbo-prop flight squashed next to some homesick student who is finding life in a Castle Street flat isn’t all she thought it would be. On the other hand, putting large amounts of taxpayers money towards paying off the mortgage on your second home (which you can then sell later for a tax-free capital gain)?

    Comment by Andrew Geddis — November 12, 2013 @ 8:17 pm

  24. The numbers in the Herald article, and the rubbish about how all that money is going to paying off a mortgage are mostly b.s.
    The money isn’t paying off a mortgage at $75,000/year or whatever. MPs and judges for that matter have very generously subsidised Superannuation schemes. For every dollar they put into there superannuation the state will match it with $2.50, up to 8% of their salary. Their accomodation payments is a completely different matter and has nothing whatsoever to do with their superannuation. If it goes into their super fund because they are renting off themselves doesn’t mean anything. That money is not matched with another $2.50
    As for the question about flying being fun? No it isn’t, althogh young Hughes doesn’t seem to mind. I travelled a great deal while working and got thoroughly sick of it. So what?
    If we really want list MPs to “represent” New Zealand perhaps we should ensure that the whole country is covered. When we get new list MPs we should draw, at random, an electorate in which no other list MP, of whatever party, lives. They must then move, at taxpayers expense, if necessary, to that electorate. If they aren’t willing to do so they are automatically removed from the list. It would get rid of the situation a couple of Parliaments ago when there were about five MPs who claimed to represent Tauranga.

    Comment by Alwyn — November 12, 2013 @ 9:04 pm

  25. If it goes into their super fund because they are renting off themselves doesn’t mean anything.

    Huh? If an MP owns the house that the taxpayer is paying her or him to “rent”, then it means a whole lot to the MP! They are paying down debt on an asset, which they can later sell and pocket the proceeds. And it’s even nicer when they can specify what the “market rent” on the house they own is going to be, thus ensuring that they can get the maximum allowable accommodation subsidy available!

    Now, you may say that “it doesn’t matter” because the taxpayer would still have had to pay for accommodation irrespective of who owns the asset being rented out. Which is what the Greens argued back when they were being criticised so harshly for doing just this. It’ll be interesting to see how loud the criticism is this time around.

    As for the “super fund” aspect to it – the properties were put into this in order to enable the MP to avoid telling anyone they owned them (thus disguising the fact they were directly and personally benefiting from any accommodation subsidies paid to them).

    Honestly – all this was laid out in the original NZ Herald article. Did you really not understand it?

    Comment by Andrew Geddis — November 12, 2013 @ 9:41 pm

  26. “Ah, But he did it first!” What are we, seven?!?

    ‘Within the rules’ or not, reasonable people get upset when our so-called ‘representatives’ use taxpayer money to gratify their own interests.

    People will always claim “There’s no law against it.” and you will always find sheep, lemmings, water-bearers, sycophants sock-puppets trolls and toadies sucking up and defending someone’s ‘right’ to act “within the law”.

    Defending something is “right” solely because it’s “legal” is hardly the bench-mark of a searing intellect. It tends to raise questions about the detractor’s interest in the situation. However, some people are actually quite consistent – they call it as they see it, without rushing to scrutinise the fine-print – which is not only difficult for a less-than-searing intellect to deal with, such people get quite enraged by it.

    To my mind the sign of hypocrisy is one who one week will defend the right of a person to do morally questionable things on the basis that they are ‘legal’ when ‘that guy’ does it, but villify morally questionable (but legal) things on the basis that ‘the other guy’ did it in the next breath.

    But you note I didn’t say ‘hypocrite’ – because it is (intellectually) very possible to realise one’s double standards and seek to fix them, once one has seen them for what they are.

    Yeah right.

    Comment by Lee C — November 13, 2013 @ 6:30 am

  27. It would be nice if, every time one of these weasels says “It was within the rules,” the news media would offer subtitles or bracketed text that reads “Translation from weasel-speak: Yes, I am ripping you off for substantial amounts of money while lecturing the nation about fiscal responsibility, but I lack the honesty or integrity to admit it. Also, I intend to continue ripping you off because the rules I and my friends wrote say I can.”

    Comment by Psycho Milt — November 13, 2013 @ 6:45 am

  28. What has amazed me is the lack of comment about the massive disparity in wealth between those who write the laws and those who suffer the consequences of those laws. The median income in New Zealand is around $63,000PA. By the time you add it all up, even the most lowly MP earns between $160-170,000PA. Now we discover that someone with 4.2 million in property (Labour list MP Raymond Huo) is considered to poor to make the top ten list of MPs, all of whom happen to be in the government.

    I guess it is really easy to pass laws designed to reduce wages for the average Kiwi (or not pass laws to reduce the cost of housing) when you are troughing 1%er with a huge property portfolio.

    Comment by Sanctuary — November 13, 2013 @ 7:13 am

  29. @Sanc: I know, awareness of this issue is tragically low.

    If only somebody would make a bunch of bombastic blog posts about it, preferably using a lot of highly moralistic language, maybe more people would sit up and take notice! But who has the courage to do so?

    Comment by Hugh — November 13, 2013 @ 10:36 am

  30. Yes, it is quite enraging.

    Comment by Lee C — November 14, 2013 @ 6:48 am

  31. Flashing Light – delay in replying to your 12/11 at a bit after 5

    You missed the point so I will spell it out more clearly. The superannuation subsidy will be applied to the member’s contributions regardless of where it is invested. What you are appearing to argue is that the parliamentary super subsidy should be selectively applied to investments that you think are OK and not available for others. Either that or it is too high and should be reduced to a level that you approve of. Answer me please, why is a property investment so abhorrent where an investment in the share market or in fine art is OK? We know that the MPs are going to be paid an accommodation allowance regardless and we know that they will be contributing to their retirement regardless. Is it that you are not (or have not been) privy to their personal financial affairs.

    I was also trying to make the point that MP’s are required to live a particular lifestyle involving much travel and time away from home in Wellington. Their whole package is designed around those factors and the uncertainty of tenure that applies to them.

    Probably of equal uncertainty is the tenure of a large number of Parliamentary Services employees who are almost immediately on the skids when there is a change of Government. I can see an argument for extending some of the benefits that partially mitigate against that uncertainty to the people who will be thrown out in the unlikely event that an untrusting Labour/Green Government is put into power by a gullible electorate next November.

    Comment by DavidW — November 14, 2013 @ 3:28 pm


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