Prime Minister - I’ll pay the money back

Friday, 1 March 2024

Prime Minister Christopher Luxon says he will pay back his $52,000-a-year accommodation allowance, admitting it has “become a distraction”.

In a statement, Luxon said he would no longer claim the allowance and “I will repay anything I have received since I became Prime Minister”.

The back track follows Opposition leader Chris Hipkins blasting Luxon for claiming an accommodation allowance while living in his own Wellington apartment, instead of Premier House.

'Christopher Luxon's treating hard-working Kiwis like a bottomless ATM. He needs to apply his own tough love standard to himself,“ Hipkins said.

This allowance, set by the Remuneration Authority, totals $52,000 for prime ministers on top of a salary of $471,049. In addition, according to Parliamentary Service, Luxon claimed a taxpayer-funded monthly lease of $3750 for his electorate office, which he also owns outright.

Luxon claims the allowance, effectively a rental payment, for an apartment he owns near Parliament that – according to financial declarations ‒ is one of seven properties he owns mortgage-free.

Last month Luxon told The Post he had not moved into Premier House as he considered renovations on the Thorndon residence for prime ministers.

His claiming of the accommodation entitlement, and the need for him to decide on renovations at Premier House, comes as Luxon’s Government searches government departments for 6.5% to 7.5% in spending cuts in a bid to slash “wasteful” public spending.

'As prime minister, it would be awesome to be able to be in Premier House. It's probably not great that we don't have a place that actually has maintenance issues and has renovations and repairs that are desperately needed in that place. But we're going to work our way through it,“ Luxon said.

'But at the moment, as an Auckland-based MP, who has to come to Wellington to do my job, I would like to live in Premier House but it's not available to do so, I'm living in my apartment.

“It's an entitlement. I'm well within the rules … I'm just entitled to the entitlements that everyone else has.”

But Hipkins said Luxon should not claim the allowance as “the prime ministerial residence is available for free”. Though the house needed “some maintenance”, it was not uninhabitable, he said.

'It's absolutely hypocritical for Christopher Luxon to be saying that every other New Zealander needs to stomach cuts, while he's claiming the $52,000 a year, that's $1000 a week …to live in his own house mortgage-free,' he said.

“The fact that it’s within the rules doesn’t make it the right thing to do.

'People who are claiming benefits are also entitled to the financial support that they have received. He had some pretty harsh words to say about them last week. He should apply the same standard to himself.'

According to property records, Luxon’s seven properties include his house in Remuera, a Waiheke property, his Wellington apartment, an electorate office in his Botany electorate, and three investment properties in Onehunga.

According to publicly available property valuation estimates, Luxon’s property portfolio could be worth more than $19 million.

Before entering Parliament, Luxon was a high-earning corporate executive both overseas and in New Zealand, including as chief executive of Air New Zealand where he earned $4.2m in his final year in the job. Before the election, he earned $296,007 as leader of the Opposition.

The claiming of accommodation and electorate office allowances has been a previous source of controversy. Bill English, as deputy prime minister, was dubbed the “double Dipton” for claiming an allowance as an out-of-Wellington MP on the basis his primary residence was in Dipton, Southland, when in fact it was in Wellington.

ACT leader David Seymour, a coalition partner in Luxon’s Government, defended the PM .

“It shouldn’t cost you money to do that job, and I think most people would agree that you give it your all … and you shouldn’t be paying out of your own pocket to do a job, and that goes for most workers and most jobs.

“Should he give up the use of his place he could otherwise rent out, because he has to live next to the Beehive to do his job at a moment’s notice? I would say that would be a bit unfair.

“h=He’s basically being treated differently because he’s been financially successful, and that I don’t think is fair.”

Seymour said he had not been to Premier House since 2015 and “it looked a bit run down then”.

Earlier this week, Luxon held a function for Australian and New Zealand cricketers at Premier House.

According to the Australia Associated Press, Australian cricketer Usman Khawaja said Luxon told him Premier House was “condemned, the kitchen was condemned”.

Luxon afterwards denied he described Premier House as such. But the property is known to be in need of renovation work.

The Post reported last month Luxon had received a report from the Premier House Board advising him the house required renovation ‒ but how much work, at what cost, when a decision might be made, he has not said.

Though Premier House has long needed renovations, according to officials, conventional wisdom dictates that prime ministers are reluctant to spend public money renewing the residence due to concern of public backlash.

Labour leader Chris Hipkins agreed that the apartment in Premier House was dated and “could do with a modest modernisation project”.

In 1935, when the first Labour Government was elected, Prime Minister Michael Savage deemed the house too “ostentatious”, according to Heritage New Zealand, and instead the Government purchased a home in nearby Northland for the prime minister.