Law Commission recommends changes to MPs' perks

MPs will lose control of their perks if Parliament accepts recommendations in a Law Commission report which makes a strong case for all their entitlements and allowances to be set by an independent authority.

They have rejected similar proposals in the past, but a string of spending scandals and the recent resignation of a cabinet minister might change their minds this time.

The report, tabled today, says the system can't be fixed by tinkering with it.

"We just can't go on like this," former Law Commission president Sir Geoffrey Palmer told NZPA.

"MPs are put under pressure by the system itself, it isn't fair to them and it isn't fair to the public.

"They are often under suspicion...because they are involved in setting the amounts themselves."

The report says fundamental change is needed and it recommends replacing the Civil List Act, which authorises payments to MPs, with new legislation which it has written as a draft bill.

It recommends the Remuneration Authority, which sets MPs' salaries, should handle entitlements and allowances and that two specialist members, one a former MP, be added to it.

"I'm really trying to help the system, not hurt it," said Sir Geoffrey, who held office while the report was prepared.

"It's got to be clear, it's got to be transparent, and it's got to be set by a third party."

He believes the most important point MPs should consider is the public's trust in the quality of New Zealand's democracy.

"If the elected representatives in our central democratic institution don't have public respect, then our whole system becomes much more fragile," he said.

The commission consulted all the parties in Parliament while it was working on the report.

Sir Geoffrey said a number of the small parties accepted it, but the attitude of the main parties wasn't clear.

The report says Parliament's Speaker, Lockwood Smith, has "real reservations" about an independent body setting MPs' entitlements.

"He is particularly concerned that an independent body would not understand the needs of Parliament," it says.

"His strong preference would be to continue to use the mechanism of the Speaker's Directions which are flexible, easy to amend and draw on the experience of the Speaker."

Sir Geoffrey said the report carefully reflected Dr Smith's view "but we don't agree with it".

The commission also says the Parliamentary Service, which makes payments to MPs, should be opened to the Official Information Act (OIA).

This has been previously rejected as well, although parties have started voluntarily issuing details of their MPs' expenses.

"While the move to greater transparency is commendable, and provides more information about the total spending of MPs, in some respects the disclosure still lacks transparency," it says.

"The figures do not distinguish between domestic and international flights, or separately identify travel paid for an MP's spouse or partner and dependant children...clearly, a voluntary regime is not the same as a statutory requirement."

It has not included that requirement in its draft bill, saying it will issue a separate report on the OIA next year.