Christopher Luxon has said he will no longer claim a $52,000 a year allowance he planned to receive while living in his own apartment and will repay any money he has received since he became Prime Minister.
The statement came just two hours after he defiantly said he was entitled to the money and was not breaking the rules. Newsroom first broke the story on Friday morning that Luxon was claiming the accommodation payment.
“It’s clear that the issue of my accommodation allowance is becoming a distraction. As such, I have decided today that I will no longer claim the allowance and will repay anything I have received since I became Prime Minister,” Luxon said in a statement.
Newsroom reported earlier that the Prime Minister would receive a $52,000 top-up to his $471,000 salary to cover his accommodation expenses since he is not living in Premier House.
A spokesperson for Luxon confirmed on Thursday afternoon that he was going to claim the optional accommodation payment, despite living in an apartment in Wellington that he owns mortgage-free.
It made Luxon the first Prime Minister in at least 34 years to claim the payment. Since Premier House became the official prime ministerial residence in 1990, previous titleholders have either lived there or, in the case of Wellington-based leaders Bill English and Chris Hipkins, stayed in their own homes.
On Tuesday, the Australian Associated Press reported Luxon had told visiting Australian cricketers that he was not living in Premier House because of its condition. One of the cricketers said Luxon had told him the building was “condemned” and unliveable, but the Prime Minister disputed using those specific terms.
“I was asked, ‘Do I live in Premier House?’ and the answer is ‘No, I don’t’. As you know, Premier House has long-standing maintenance issues. A report was given to the former Prime Minister. That same report has been passed on to me and the Government will consider what options we have available to remedy all the maintenance issues that are there. Until then, I stay in my apartment,” Luxon told reporters later that day.
While Premier House received upgrades in 2018 at a cost of $3 million, it was acknowledged by previous Prime Ministers Jacinda Ardern and Hipkins as needing more substantial work. Ardern noted the building’s tendency to leak, while Hipkins told Newsroom it was dated and could do with a “modest modernisation project”.
“However, I have not received notice that it is uninhabitable or condemned.”
On Friday afternoon, Luxon defended taking the money in comments to reporters in Queenstown.
“It’s an entitlement. I’m well within the rules,” he said. “I’m just entitled to the entitlements that everyone else has.”
The Prime Minister added that he would prefer to live in Premier House but that wasn’t possible due to the condition of the building.
Hipkins pushed back in a media conference after Luxon’s Queenstown appearance.
“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, allowance 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.”
Just two hours later, Luxon announced he would no longer claim the entitlement.
Prior to the election, Luxon was one of more than 20 MPs who received $31,000 a year from Parliament to cover housing expenses in the capital while staying in properties they already owned. At least some of those MPs were still paying a mortgage on their Wellington properties, however, which Luxon is not.
This isn’t the first time attention has turned on MPs claiming the allowance while seemingly not needing it. While English did not claim it as Prime Minister, he was criticised for claiming the payment as a minister in 2009 and ultimately repaid the money.
As Prime Minister, Luxon is eligible to claim up to $52,000 a year under the same scheme. The apartment he owns, without a mortgage, was valued at more than $1 million in 2021, although property values have declined since then. Luxon also owns a family home in Auckland, a bach on Waiheke Island and four investment properties in Auckland.
Ministerial expense returns released on Thursday covering the final three months of 2023 did not show the expense being claimed, but the spokesperson said this was due to a late filing which will be reflected in future releases.
“At the end of 2023, the Prime Minister had just received the Premier House Board Report and was unclear whether or not he was going to move in,” the spokesperson said Thursday.
“The reports suggest Premier House requires a significant amount of work so the Prime Minister is considering that before making any decisions around residing there. The Prime Minister has since claimed the allowance for the period and it is expected this will be reflected in the next release of expenses.”
Luxon campaigned on reducing public expenditure and ensuring taxpayers get value for money. Finance Minister Nicola Willis has asked all public sector departments to seek savings of 6.5 percent.
The returns released on Thursday also show six other National Party ministers, two other National MPs, one Act Party MP and five Labour MPs claimed the accommodation supplement last year while owning property in Wellington.
These figures exclude MPs who weren’t in Parliament before the election, as their financial interests haven’t yet been released.
The other MPs are Andrew Bayly, Gerry Brownlee, Judith Collins, Simon Court, Barbara Kuriger, Melissa Lee, Mark Mitchell, Deborah Russell, Jenny Salesa, Stuart Smith, Jan Tinetti, Louise Upston, Arena Williams and Duncan Webb. Some of them may have mortgages on their Wellington properties.
Must be setting an example to all those who are, and will continue to, suffer the real cuts in the minimum wage and benefits.
Hypocrisy clearly demonstrated.
Check how many other MPs do exactly this? The answer is almost all that are not based in Wellington. They forgo rent when occupying their properties.
There will also be considerable financial benefits from the ‘landlords rebate’. In marked contrast, an earlier PM took a 20% pay cut for a time, aiming to “demonstrate leadership”:
“Ardern acknowledged that while this action in itself would not change the government’s financial position, she said it was about demonstrating leadership.
“If there were ever a time to close the gap between groups of people across New Zealand in different positions, it is now,” Ardern said during the announcement on Wednesday.” https://www.cnbc.com/2020/04/15/coronavirus-new-zealand-leader-jacinda-ardern-takes-20percent-pay-cut.html
Credible countries provide official residences appropriate for the public office requirements of their elected leaders. (Official functions, security, etc). Its crazy that NZ is too tight fisted to do the same. PM Luxon is presumably giving up rental income he’d receive from his Wellington apartment , if he didn’t occupy it….and he doesn’t set the allowance figure. Another untrue angle for this PM’s housing story could be “Luxon says NO to prestige of Premier House?” But no. Next we’ll be asking him to travel by bus?
Agreed – and the issue of MPs owning the property they use as Wellington accommodation has been covered often in the past. Wellington-based MPs (such as Hipkins) dont qualify.
Well now, that would set a precedent, the PM travelling by bus. Perhaps he might then consider public transport a priority, before roads.
As for premier House how about opening it up to some of the homeless people in Wellington. They might not mind the need for upgrade and the odd leak.
One rule for the already rich another for the rest of us . When interest rates and inflation are eating away at incomes this magical thinking by politicians that they are somehow exempt from doing what is morally right points to their drive only for themselves . And we havent even had the promised tax cuts that propelled them into power ;voted in by a short sighted NZ