Editorial: Reform needed on pay and perks

OPINION: Bill English has emerged from the inquiry into his housing allowance with his reputation dented but not destroyed.

Ministerial Services has emerged with its reputation in tatters.

The body that should be guarding the public purse has been shown to be not a fierce watchdog but a supine lapdog too timid to point out to the deputy prime minister that his claim didn't stack up.

The auditor-general's report is crystal clear. Mr English should not have been getting the ministerial housing allowance he was claiming, because he had an indirect financial interest in the trust that owned the Karori house he and his family live in. Mr English's defence is that he relied on advice. The problem is, he was given advice for one purpose and used it for another.

The criticism of Mr English in the report is implicit. Its criticism of Ministerial Services is explicit. It knew the advice Mr English proffered in defence of his claim might not be applicable. It "should have raised this with the minister". Instead it handed over the cash.

Nothing better illustrates the inherent flaw in a system in which public officials are expected to monitor the expenses claims of those who are effectively their bosses. Time after time the system has failed to protect taxpayer interests, and in this case it has also failed to protect Mr English's interests.

His reputation is irredeemably damaged, and his credibility diminished just when he needs it to be at its highest.

The only way to prevent further outrages is to put the setting and administration of allowances for both ministers and MPs beyond their reach. MPs had the chance to do that in 2002 by handing over all responsibility for pay and allowances to an independent remuneration authority in line with the recommendations of an independent review. Instead, MPs gutted the recommendations, opting instead for maintaining a fractured system that diminished responsibility by spreading it widely, a set of rules that Mr English's experience shows is opaque, and control firmly in the hands of those who stand to benefit from the system.

Their move then was unsurprising, as is the failure to do anything substantial about it in the seven years since. MPs have a disturbing tendency to confuse their interests with those of the country at large, and to develop a sense of entitlement to rival that of a Wall St banker.

The solution, as the auditor-general has pointed out in her latest report, is to improve both the rules and the way they are administered. The rules have to be fair, and they need to be clear and well explained. The system needs to have appropriate checks and balances, administered by officials not afraid to say no.

At least as important as that is ensuring the public know what is going on and how their money is being spent. The new practice of releasing information on what is being spent on ministers and MPs, endorsed by the auditor-general as "an important step towards better transparency and accountability", is a first step but more is needed. Opening up the Parliamentary Service to the Official Information Act would be a start. If MPs and ministers believe they are entitled to what they are getting, they should be willing to reveal it, and then justify it.

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