News release

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07 September 2009
Ministerial accommodation decisions announced

Prime Minister John Key today released decisions on the review he ordered into accommodation services for Ministers. 

The review looked at four options based on three criteria, which were:

  • Simple, easy to understand, transparent and cost effective
  • Value for money to the taxpayer
  • Offers suitable accommodation for Ministers and their families

The new system is a modification of option four. Ministers will make their own arrangements and pay for it out of a fixed payment of $37,500 per year equivalent to a market-based estimate of rent and a small contribution to other costs.  Only one payment of $37,500 will be made per property.

A second category of payment, of $30,000 per year, will be created for Ministers who remain in the same home for which they are currently claiming the parliamentary allowance of $24,000. The $30,000 payment replaces the parliamentary allowance.

In the event that a Minister chooses to live in a hotel, they will be reimbursed for their actual expenses up to a cap of $37,500 per year.  

“In cases where Ministerial Services lease properties, those arrangements will remain in place until they expire as there would be a cost to the Crown of withdrawing from the leases early.

“These decisions reflect my desire to see a simple, transparent and cost-effective system for ministerial accommodation,” says Mr Key.

“The higher allowance for Ministers compared to MPs reflects their greater needs because of their obligation to spend considerably more time in Wellington.  The review notes that if Ministers purchased the equivalent services for their accommodation directly, the average cost is $48,295 per year, so the new rates do not, in most cases, cover the full cost.”

The review also recommended selling or divestment of all ministerial houses except Premier House and its associated cottage.

“However, I have decided that these houses will be retained for the remainder of the parliamentary term to avoid disruption to Ministers and their families,” says Mr Key. “During this term we will consider the merits or otherwise of disposal of the houses in the future.”

“Ministerial Services will report by the end of October with a detailed plan on implementing the changes decided today.”

Related document:

Accommodation Review (pdf, 496 Kb)


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