What does it really cost to employ a Cabinet minister?

Thursday, 18 June 2026

Being an MP is not as simple as turning up to work and collecting a salary.

Pay is only one part of the package. Accommodation, flights, taxis, ministerial cars, expense allowances and even overseas travel all sit under different sets of rules. Some are overseen by independent bodies, others by politicians themselves.

Whether this maze of entitlements strikes the right balance is a matter of debate. In recent weeks there has been controversy over MPs receiving accommodation allowances while staying in properties they own, questions about ministers' car parking habits, and renewed scrutiny of the little-known subsidy that gives some retired MPs discounted travel for life.

There is no single agency in charge of MPs' pay and perks. Instead, responsibility is split across at least five different organisations. The result is a system that can be difficult for the public to follow — and sometimes for politicians too.

Last week Prime Minister Christopher Luxon was asked about Minister for Children Karen Chhour's airport parking bill, first reported by The Press. His response was a familiar one: MPs' entitlements are set by an independent body.

Except airport parking isn't. That sits under an entirely different system run by Ministerial Services, which is ultimately overseen by a minister — currently Nicola Willis.

This confusion partly explains why MPs’ perks are a perennial topic of discussion. Both Luxon and opposition leader Chris Hipkins have recently said they will take a look at various aspects of the scheme.

To see how it all fits together, let’s follow the journey of a hypothetical politician.

Meet Chris. Chris is a newly elected Christchurch MP. He has had a good election night, impressed the party leadership, and is about to become a Cabinet minister.

What does it cost taxpayers to employ Chris and help him do his job?

The pay packet

The first and most obvious cost is salary.

As a Cabinet minister, Chris earns $327,100 a year. His pay is set by the Remuneration Authority, an independent body that also determines the salaries of judges and other senior public office holders.

The authority looks at factors such as overseas comparisons and similar senior roles in New Zealand. The idea is to attract capable people into politics without turning Parliament into a path to personal enrichment.

But Chris has a problem. He lives in Christchurch and works in Wellington.

To help cover the cost of living in two cities, he can receive up to $52,000 a year in accommodation support. That money can go towards rent, mortgage costs or hotel stays. The Remuneration Authority sets the rules and maximum payment levels for MPs' accommodation allowances. Parliamentary Service then applies those rules, verifies eligibility, and processes claims.

While the authority is technically independent, Parliament is sovereign. In 2018 it passed legislation freezing MPs' pay and allowances, overriding the usual Remuneration Authority process. It could do so again.

Chris also spends nights away from both Christchurch and Wellington while travelling for ministerial business. Those accommodation costs are covered separately and are generally capped at $350 a night, with a higher limit in Queenstown.

Based on recent spending patterns, ministers claim roughly $8000 a year in these costs. Before Chris has boarded a single flight, taxpayers are already spending close to $390,000 a year.

Getting around

So far, we only have the Remuneration Authority to deal with. Travel is where it gets tricky.

For ordinary MPs, domestic travel is governed by the Speaker's Directions, a rulebook issued by the Speaker of the House. The travel itself is arranged and paid for by Parliamentary Service.

There is no overall cap on how much an MP can travel. If a trip is for parliamentary business and complies with the rules, it can generally be claimed.

Oversight is limited. Political parties are expected to keep an eye on their own MPs through their whips. Individual travel decisions are not routinely reviewed by an independent watchdog, and spending is released only as quarterly totals.

Because Parliamentary Service is exempt from the Official Information Act, the public cannot see detailed records showing exactly how MPs spend that money.

Based on recent spending, MPs spend anywhere between $20,000 and $100,000 a year getting around the country.

This doesn’t apply to Chris or his fellow ministers. Their travel comes under Ministerial Services, a unit within the Department of Internal Affairs. The rules are set by the Minister Responsible for Ministerial Services.

In other words, two MPs can sit next to each other on the same flight to the same city while operating under entirely different travel regimes.

Chris flies a lot. Recent spending suggests a Cabinet minister's domestic flights cost about $40,000 a year on average.

When he’s not flying, he’s in a car, which is even more expensive. Ministers have a range of ‘surface travel’ options, ranging from Crown cars, taxis, ride share services, or a Government-issued vehicle for their own use with running costs covered by taxpayers. Recent spending suggests these costs average about $60,000 a year for a minister.

Then there is international travel. Ministers generally need approval from both the prime minister and Cabinet before heading overseas. The cost varies enormously depending on the destination and the size of the delegation, but recent spending suggests a typical overseas trip costs around $40,000.

If we add this all together, assuming Chris gets one international trip a year, he is costing taxpayers around $530,000.

The extras

We're still not finished. Every MP receives a tax-free expense allowance worth about $19,000 a year. It is intended to cover miscellaneous costs that do not fit neatly elsewhere, including professional development, memberships, donations and koha.

MPs can also receive a taxpayer contribution to their superannuation. For those contributing the maximum amount themselves, that contribution is worth about $36,000 a year, far in excess of most employers’ schemes. Both of these figures are set by the Remuneration Authority.

Some MPs will also join overseas parliamentary delegations. These trips are usually undertaken by backbench MPs rather than ministers, so Chris misses out. If he lost his place in Cabinet and did go, the cost could easily exceed $20,000. To make matters more confusing, those trips are overseen by yet another organisation: the Office of the Clerk.

We’re missing out on some other costs. MPs get a $4000 allowance for a security system installation, and are issued computers, tablets, and other communications equipment. They get funding for staff, office budgets, electorate support, and departmental support, which don’t give much personal benefit.

Add together what we’ve outlined and Chris, our Christchurch Cabinet minister, costs us around $580,000 a year.

Whether this is value for money is for voters to decide. Perhaps more interesting are the number of agencies involved.

In summary: The Remuneration Authority sets salaries and accommodation allowances. Parliamentary Service manages MPs' travel. The Speaker writes the travel rules. Ministerial Services oversees ministers' expenses, itself overseen by the Minister for Ministerial Services. Cabinet and the prime minister approve overseas travel. The Office of the Clerk manages parliamentary delegations.

Each piece makes sense on its own. Together, they create a system that can be surprisingly hard to explain, which is why arguments about MPs' perks keep returning to the headlines.