Chapter 3 Members’ Conditions Of Service
Designation of members
Members of the House of Representatives are known as “members of Parliament”, abbreviated to “MP”.
They have had this designation since 1907 when their previous abbreviated designation “MHR” was altered as part of a general set of changes to official titles consequent on the acquisition of Dominion status.
Role of members
A member of Parliament holds a statutory office. Members are not (except for certain tax purposes) employees in an employment relationship, nor are they subject to any contractual obligations in regard to their duties.
There is no prescribed description of the role of a member of Parliament. The office to which members are elected has a considerable amount of legal freedom guaranteed to it so that members themselves have the capacity to carry out the duties of the office as they see fit and indeed are able largely to define what the duties of that office are. The most visible aspect of the office is the ability to sit and vote in the House of Representatives after having taken the oath required by law.
Other parliamentary aspects of the office are the ability to participate in parliamentary proceedings conducted outside the House itself, such as serving on committees, presenting petitions, asking written questions and lodging notices of bills for introduction and motions for debate.
Members of Parliament are representatives for the citizenry both in relation to business transacted in Parliament and more generally, especially in dealings with organs of central, and even local, government. This applies both to the members elected to represent electoral districts and the party list members. All members to a greater or lesser extent make themselves available to assist with resolving individual problems, whether by making representations to a Minister or a department or simply taking the trouble to sift through the problem presented to them and giving advice on how it could be resolved. Electorate members have an obvious geographic focus for this work based on the electoral districts they represent. But most party list members assume a similar constituency focus for their work too, with their party allocating them responsibility for representing the party in a particular locality.
A survey in the early 1980s (when all members were constituency members) suggested that at least 30 percent of a member’s time was spent on constituency work.
Indeed, members have been described as, first and foremost, local representatives, social workers and ‘fix-its’.
Members may also assume profiles that cut across physical boundaries by cultivating roles as advocates for particular activities or groups, often with a nationwide profile.
Members are generally elected in a party’s interest. They have strong obligations of loyalty to the party which nominated them and whose support they received to assist them to secure election. These obligations involve attending meetings of caucus and serving on caucus committees as well as participating in party activities generally, both in the locality that they represent and in other locations. Participation in political activities while holding office, even ministerial office, is inherent in the positions that members hold.
There will thus be strong expectations that, as members of a political party, members of Parliament will co-ordinate their political activities with those of their party and generally act in concert with the party in respect of matters of party political significance. Ultimately, if there are any differences, these are matters for the party and the individual members to resolve between themselves.
Statutory functions and disqualifications
Occasionally, statute may impose a particular role, duty or even disqualification on a member of Parliament ex officio. For example, the Speaker has a number of statutory duties arising out of holding that parliamentary office, most notably as chairperson of the Parliamentary Service Commission and as responsible Minister for a number of offices of state. (See Chapters 4 and 5.) Members elected for the Māori electoral districts automatically become members of the Māori Purposes Fund Board
and of the Ngarimu V.C. and 28th (Māori) Battalion Memorial Scholarship Fund Board.
The member representing Nelson is a member of the Cawthron Institute Trust Board.
The members who serve on the statutory Intelligence and Security Committee do so in their capacity as members of Parliament.
Members have a statutory right to enter a prison and examine it and the condition of its prisoners. They may inform the manager of the prison of any matter that they observe and such information is to be recorded.
Prisoners are entitled to have access to a member of Parliament
and telephone calls between a prisoner and a member may not be monitored by the prison authorities.
Communications between members and persons subject to compulsory care under the intellectual disability legislation must not be withheld.
An oath or declaration may be made before a member of Parliament.
Conversely, a member of Parliament may not be appointed as a member of a statutory entity or of a Crown entity company.
(Though, in respect of a statutory entity whose members are elected to it, a member of Parliament may be elected to office in the entity but is not entitled to any extra remuneration in respect of such service.
) However, members may be appointed to serve on the boards of other types of entity.
But these statutory examples of a member’s role are not numerous and do not amount to a comprehensive description of the role of a member of Parliament. As far as statute and parliamentary rules are concerned, such a description does not exist.
Duties of members
The fundamental obligation of a member of Parliament has been said to be “the duty to serve” and, in serving, to act with fidelity and with a single-mindedness for the welfare of the community.
From time to time there have been suggestions that the House should be specific about members’ duties and adopt a statement setting out a code of conduct or ethical principles that it expects its members to follow in carrying on their parliamentary and other roles. A number of Commonwealth legislatures, especially in Australia, have done this. In 1997 the Government Administration Committee in a special report sought the House’s authority to carry out an inquiry that could have included consideration of whether a code of conduct was desirable.
No inquiry resulted from this report. Except in the case of financial interests, the House has not adopted any detailed ethical guidelines for its members, taking the view that advice about appropriate behaviour is primarily a matter for induction training and internal party discipline.
Ethical rules that apply to members tend to be ad hoc or indirect. Thus, a member who accepts or solicits a bribe commits a crime
and the House’s contempt powers (for example, the rule concerning bribery) do set some rules for members that have an ethical content. (See Chapter 47.)
In the case of Ministers there are more developed conduct guidelines to which, as Ministers, they are expected to conform. Ministers on appointment take an oath or make an affirmation as members of the Executive Council promising to give their counsel and advice for the good management of the affairs of New Zealand.
The Cabinet Manual sets out guidelines on the public duties which apply to Ministers. Apart from being under an obligation to declare any personal interests in matters under consideration by Cabinet (see below), Ministers are restricted in the extent to which they may receive fees or gifts and are prohibited from engaging in activities that may be construed as endorsing a commercial product.
As occasion requires, ministerial guidelines may be issued by the Cabinet or the Prime Minister to deal with particular circumstances that have arisen (such as the conduct to be observed by Ministers involved in mayoral election campaigns
). However, these ministerial codes of conduct are political guidelines adopted by Governments to guide their own conduct. They have no statutory origin and are not regarded as being legally enforceable. Their significance depends upon the sense of commitment to public office held by Ministers and on their political responsibility to Parliament and public opinion.
While no comprehensive statements of members’ duties have been adopted, even as guidelines, the law does recognise that members, as the holders of a high public office, have duties of conduct that inescapably accompany that status. Insofar as these duties apply to the transaction of parliamentary business (in the House or at select committees) they are matters for the House itself, rather than a court, to supervise.
But in their dealings outside the House, whether with constituents, government officials, or lobbyists, members may still act in the capacity of members of Parliament.
If in these interactions they act in a way that brings their own personal interests into conflict with their public duties, the law may provide a counter to such an impropriety, for example, by holding a contract for a member’s benefit to be void.
Members’ length of service
The member with the longest-ever service in the House of Representatives is the Hon Rex Mason who was continuously re-elected as a member for Auckland constituencies from 1926 until his retirement in 1966. But even his length of service is eclipsed by that of Captain William Baillie, who was appointed to the Legislative Council in 1861 and died still a member in 1922, making him easily New Zealand’s longest serving parliamentarian. (Appointment to the Legislative Council was for life until 1891 when a seven-year term was substituted but existing councillors retained their lifetime appointments. Baillie was the last of the life members.)
By way of contrast, Henry Jackson (Hutt) was a member for only just over one month in 1879, having been elected at a by-election just before Parliament was dissolved following the defeat of the Grey ministry in a vote of confidence. William Henry Cutten (Taieri) was re-elected to the House in 1878, some 23 years after having resigned his seat, the longest gap in service of a member of Parliament.
Traditionally the member with the longest period of continuous service (that is, service that is unbroken up to the present time) is regarded as the “Father of the House”. Where members are elected at the same time, this accolade is accorded to the first of them to be sworn in as a member. The designation is entirely honorific. No duties or entitlements attach to it, though the first Father of the House, Hugh Carleton, the first member to be elected to the House in the staggered election of 1853, presided over the House when it assembled in 1854 until a Speaker was elected. Carleton was recognised as Father of the House until his retirement in 1870.
Attendance of members
Penalties for failure to attend
Members are under obligations imposed by statute to attend meetings of the House; failure to do so can lead to penalties.
A member who fails to attend the House throughout an entire session without being granted leave of absence loses his or her seat, which thereupon becomes vacant.
A member who loses his or her seat in this way is eligible for re-election at the ensuing by-election. Two members have forfeited their seats under this provision – one who failed to attend throughout the 1862 session, and another who was court-martialled and imprisoned during the First World War for refusing to obey a superior officer, and who was thereby prevented from attending the House during one of the two sessions of Parliament held in 1918. A motion to grant the latter member leave of absence while he was in prison was defeated.
In 1942, when the Hon Walter Nash, the Minister of Finance, was appointed Representative in Washington, special legislation was passed to prevent his absence resulting in his seat becoming vacant.
A member who is absent from the House for more than 14 sitting days in any session without leave of absence has a deduction of $10 made from his or her salary for every day (exclusive of those 14) during which the member has been absent. No expenses are payable in respect of any such day either.
A member who persistently absents himself or herself from the House may be ordered by the House to attend. Failure to obey such an order would be a contempt.
Leave of absence
The Standing Orders no longer require members to attend the House and the House does not have, and has no need for, any formal procedures for granting leave of absence or for recording members’ attendances. If any member did require leave of absence so as to avoid a statutory penalty, this would need to be given by motion on notice.
A member who has been granted leave of absence for a period of time may return to the House and take his or her seat within that period. In these circumstances the remainder of the leave granted to the member is cancelled.
Leave of absence may be granted to an elected member who has not yet taken the Oath of Allegiance and, therefore, a seat in the House, because such a person is a member of Parliament with all the privileges of a member except those of sitting and voting in the House.
It is a well-established convention that members do not refer to the absence of members during the course of debates in the House.
The Speaker is permitted to waive the requirement that an independent member or the member of a party consisting of a single member be present within the parliamentary precincts to have a vote recorded in a case of the member’s illness or other family cause of a personal nature or so as to enable the member to attend to other public business.
This is not a general leave of absence; it merely enables a member’s vote to be counted even though the member or the member’s party is not within the parliamentary precincts.
Requirements for members to be present
There is no quorum in the House. The House’s previous requirement for a quorum (15 members in a House of 99 members) was abolished in 1996.
The House had not actually been counted out for want of a quorum since 1905.
But though there is no quorum requirement, there must be a Minister present during all sitting hours of the House. If there is no Minister present, the sitting is interrupted and the bell is rung. If no Minister appears within five minutes of the bell being rung, the House automatically adjourns until the next sitting day.
A sitting has been adjourned as a result of the absence of a Minister from the House.
A motion to suspend the Standing Orders can only be moved without notice if at least 60 members are present at the time,
and in any case no decision can be reached on a personal vote if fewer than 20 members participate in it.
(A quorum of half the membership of the committee is prescribed for a select committee meeting.
It is a crime for a member of Parliament to accept or agree or attempt to accept a bribe in his or her capacity as a member of Parliament.
This offence applies to bribes relating to business to be transacted in Parliament but it also extends beyond parliamentary business to other activities engaged in by members in the capacity of a member (such as constituency duties and ex officio statutory duties). Nor is the offence confined to actions that may be engaged in exclusively by members of Parliament. It can be committed by a member accepting or soliciting payment for an action which would be lawful if carried out by someone who is not a member of Parliament.
Members of Parliament are required to conform to a higher ethical standard in matters pecuniary.
The House may treat the receipt or solicitation by members of bribes and the receipt of fees for professional services in respect of parliamentary business, as contempts.
Thus a member who received payment for work he had done drafting two local bills was held to have committed a contempt, even though he had done the work before he entered Parliament.
Members must be careful to keep their official and private capacities quite separate in their business dealings so that no misunderstanding may result.
While members may solicit funds for policies or programmes in return for their votes (known as “pork-barrel politics”), they may not seek a benefit for themselves or for other persons to whom they are related in return for their votes.
It has been suggested that a code of conduct regulating the dealings between members and officials and Ministers should be adopted.
Registration of pecuniary interests
Many legislatures (either by statute or under their own rules) require members to make periodic returns of pecuniary interests for publication in a register. Proposals to establish a register of members’ pecuniary interests in New Zealand have been discussed since at least 1986.
The failure to agree at that time on a parliamentary register led the Government of the day to establish its own register of Ministers’ interests in 1990. (See p. 44.) In 2005 the House adopted Standing Orders (replacing proposals for legislation)
requiring members to make annual returns of their pecuniary interests for publication in a register.
Contents of returns of interests
The interests that must be disclosed consist of information falling into two broad categories – matters which exist at the date on which the return must be made (assets and liabilities), and events which have occurred over the 12-month period preceding that date (activities). In no case is the actual value of any asset, payment, interest, gift, contribution or debt required to be disclosed.
Those interests in the nature of assets and liabilities that must be disclosed are
•names of companies of which the member is a director or controls more than five percent of the voting rights relating to control of the company
•names of companies or business entities (entities operating for profit) in which the member has a pecuniary interest, but not including interests arising indirectly because a member has an interest in a company or entity that in turn has an interest in another company or entity
•the name of any employer of the member (this does not include being a member or a Minister); a description of the main business activities of any company, business entity or employer so identified must also be given
•each trust in which the member has a beneficial interest
•the name of any organisation of whose governing body the member is a member or of any trust of which the member is a trustee if the organisation or trust receives or has applied to receive funding from the Crown, a Crown entity or a State enterprise (unless the organisation or trust is itself a government department, a Crown entity or a State enterprise)
•the location of each parcel of real property in which the member has a pecuniary interest, unless the member has no beneficial interest in that property
•each superannuation scheme registered under the Superannuation Schemes Act 1989 in which the member has a pecuniary interest
•each debtor who owes the member more than $50,000
•each creditor to whom the member owes more than $50,000.
In the case of debts outstanding, a description of each debt must be given. If the rate of interest charged on a debt is less than that currently prescribed by regulation as the notional rate of interest for tax purposes on employment-related loans, that rate must also be disclosed.
But a member does not have to disclose information relating to a debt outstanding (as a debtor or a creditor) between the member and the member’s spouse or domestic partner or any parent, child, step-child, foster-child or grandchild of the member.
Nor is a member required to disclose short-term (under 90 days) debts for goods or services.
Interests in the nature of activities in which the member has been engaged in the relevant preceding period are
•countries travelled to – the name, purpose of travel and details of who contributed to the travel or accommodation costs incurred must be given; however, where such costs were paid in full by the member himself or herself, or by the member’s spouse or domestic partner, any parent, child, step-child, foster-child or grandchild of the member, or by the Crown, or by any other government where the primary purpose of the travel was in connection with an official parliamentary visit, the travel does not need to be disclosed
•gifts with an estimated market value of more than $500 and the names of the donors of those gifts (if known or reasonably ascertainable by the member); gifts include hospitality and cash donations but do not include donations for election expenses
•debts of more than $500 owing by the member that were discharged or paid (in whole or in part) by some other person
•descriptions of each other payment received by the member for activities in which the member was involved (other than the salary or allowances of a member of Parliament).
The period covered by these “activities” is generally the 12-month period preceding the date on which the return must be made.
However, information given on any previous return does not need to be given again and only activities since a previous return need to be disclosed.
In the case of members on first being elected to Parliament at a general election, and in the case of members elected at a by-election or otherwise returned to fill a vacancy arising on a party list, the “activities” return is confined to the period commencing with their election or return to Parliament.
Where a member is re-elected at a general election the period of the return extends back to the preceding 1 February to retain the continuity of returns from that member.
(But not in the case of members re-elected at the 2005 general election when the register first came into existence. Each member’s returns are confined to the period commencing with polling day for that election.
Timing and manner of making returns
There are two types of returns of interests that members must make – initial returns and annual returns.
An initial return must be made by all members as at the date that is 90 days after the date on which they take the oath or make the affirmation required of all members on taking their seats in Parliament.
Members have 30 days from that date to submit their returns.
However, no initial return is required to be made if the general election or by-election at which the member is elected is held after 1 July or if the member is declared elected to fill a list vacancy after 1 July in any year.
In such cases the first or next return that the member makes will be the annual return due in the following year.
An annual return of pecuniary interests as at 31 January each year must be made by every member by 28 February that year.
In all cases returns are made either on forms specially prescribed by the House or, in the absence of such prescription, in a form approved by the registrar.
The obligation to make a return by the due date falls on the member himself or herself. The registrar is not required to notify a member of the member’s failure to transmit a return by the due date or to obtain a return from the member.
Register of pecuniary interests
A register called the Register of Pecuniary Interests of Members of Parliament is established consisting of all returns transmitted by members.
The registrar is the Deputy Clerk or a person appointed by the Clerk of the House with the agreement of the Speaker.
The first registrar to be appointed is a former Ombudsman.
The registrar is required to compile and maintain the register and to provide advice and guidance to members in connection with their obligations to make returns of pecuniary interests.
A booklet communicating to members their obligations under the Standing Orders is to be produced.
However, the registrar is not required to notify members of their failure to comply with their obligations to make returns of their interests or of any errors or omissions in their returns.
Publication of register
Members have 90 days from the date as at which an initial return must be made and one month from the date (31 January) as at which an annual return must be made to make their returns to the registrar. The registrar has 90 days from each of those dates to put the returns into a summary form that represents a fair and accurate description of the information that has been transmitted. These summaries are published on a website and in booklet form.
The registrar must promptly provide a copy of the booklet to the Speaker, who presents it to the House.
It is then published as a parliamentary paper. The registrar is responsible for maintaining the information on the website and making it available for inspection at Parliament buildings during working hours. Copies of the summaries may be made.
Apart from making information available to the Auditor-General for that officer to carry out the functions conferred on the office in regard to members’ returns, the registrar must keep all other returns and information relating to individual members confidential.
At the dissolution or expiration of Parliament such information is to be destroyed except where the Auditor-General requires information relating to any individual to be retained for investigative purposes.
Investigation and enforcement
The registrar must supply the Auditor-General with a copy of every return within 14 days of it being received by the registrar
and must disclose any information relating to the register in the registrar’s possession that the Auditor-General requires for reviewing and inquiring into the returns.
The Auditor-General reviews the returns and may inquire, either on the Auditor-General’s own initiative or on request, into whether a member has complied with the obligations to furnish returns or whether the registrar has complied with the registrar’s obligations under the Standing Orders. The Auditor-General may report to the House the findings of any inquiry carried out and may report on any other matter the Auditor-General considers it desirable to report on.
It is a contempt of the House for any member knowingly to fail to make a return of pecuniary interests (initial or annual) by the due date
or knowingly to provide false or misleading information in such a return.
A complaint that a member has committed such a contempt is raised in the standard way for raising a matter of privilege. (See Chapter 48.)
Declaration of financial interests
Members who have a financial interest in business before the House are not thereby disqualified from participating in a debate on the matter, serving on a committee inquiring into it or voting on it. It is for members to judge whether they should participate in any of these ways when they possess a financial interest in the outcome of parliamentary proceedings.
However, a member is required to declare to the House or to a committee a financial interest that he or she has in the outcome of parliamentary business before participating in consideration of it.
Failure to do so will constitute a contempt of the House
and can be dealt with as a matter of privilege. But the validity of the business transacted by the House or committee (for example, a question asked by the member) is not affected by the member’s failure to declare a financial interest.
If a member does propose to refrain from participating in a particular item of business by not speaking and voting on it (recording a formal abstention is participating in its consideration), there is no obligation to disclose an interest. There is no obligation to disclose a financial interest where that interest is contained in the Register of Pecuniary Interests of Members of Parliament.
That register constitutes a standing declaration of financial interests.
Definition of financial interest
A financial interest that must be declared is defined as a direct financial benefit that might accrue to a member personally, or to any trust, company or other business entity in which the member holds an appreciable interest, as a result of the outcome of the House’s consideration of a particular item of business.
A financial interest includes an interest that is held by the member’s spouse or domestic partner or by any child of the member who is wholly or mainly dependent on the member for support.
An obligation to declare an interest only arises where a benefit may accrue as the result of the outcome of the House’s consideration of the business. A benefit could therefore generally accrue only from the House transacting business that has a legal effect. Passing legislation is the obvious example of this situation and a declaration must always be made of a benefit that would accrue to a member from legislation before the House. There are other situations in which the House participates in taking actions with legal consequences – such as disallowing regulations or recommending appointments – and any financial benefit resulting from these activities must also be declared. But in respect of most other business transacted by the House it is unlikely that any financial benefit could accrue as a result of the outcome of the House’s consideration of the matter. Declaration of any interest that a member has in the subject is, in these circumstances, optional.
To constitute an “interest” at all, the interest must be a direct one. Thus a member who was a director of a company which provided mortgage broking services for a company which owned land affected by the proposal before the House was ruled to have had too indirect an interest to be affected.
The interest of members as policyholders in a large life insurance office has also been held to be too remote to be affected by this rule.
The Speaker has ruled that the fact that an amendment might open up a business opportunity for a number of companies in which members have interests does not constitute a direct financial benefit to them. Such a business opportunity might or might not eventuate from the amendment becoming law. Entirely speculative interests cannot be direct financial benefits.
Furthermore, a financial interest does not include an interest held by a member (or the member’s spouse, domestic partner or dependent child) as one of a class of persons who belong to a profession, vocation or other calling, or who hold public offices or an interest held in common with the public.
Interests held in common with the public or vocational groups do not require to be declared.
So members did not have a financial interest in this sense in a payment of members bill
or in a bill dealing with members’ superannuation entitlements,
and Ministers did not have a financial interest in a Minister’s salaries and allowances bill.
Members who were farmers did not have financial interests in a bill providing payment for and the marketing of dairy produce
and a member who was a director or shareholder in a company operating within a particular industry did not have a financial interest in general legislation dealing with that industry. It is only if the member’s company is singled out for special treatment in legislation that a financial interest could arise.
Private legislation is thus more likely to raise questions of financial interest than general legislation.
Declaring an interest
There is no particular means prescribed by which a financial interest must be declared. It can be done while speaking in debate,
by personal explanation
or on a point of order. In a select committee it could be done orally to the committee or in writing to the chairperson. In the case of the latter the chairperson is responsible for bringing it to the attention of the committee.
The obligation to declare an interest lies with the member who holds it; other members cannot impose an obligation on the member to take any action by alleging that a financial interest is held.
If a member holds a financial interest and fails to declare it, the issue becomes a matter of privilege. In this regard, if there is a dispute as to whether there is a financial interest the Speaker decides the matter and the Speaker’s decision is final.
In any subsequent consideration of the matter by the Privileges Committee, for example, the committee would be bound by the Speaker’s finding on whether a financial interest existed.
Where the issue of whether members hold a financial interest arises at a select committee, the matter can be referred directly to the Speaker for decision by the committee itself or by any member. A committee has cautioned witnesses not to abuse their privileges as witnesses by making unsubstantiated allegations that members hold financial interests in the business before the committee.
Apart from pecuniary interests, the House has no formal rules requiring members to declare interests of a personal and non-pecuniary or non-financial nature that may be relevant to their participation in business before the House. However, it is likely to be in members’ own political interests to make clear any personal interests that they have on matters under consideration by the House or a select committee (such as a relationship with someone else who may be affected by the outcome of the business under consideration), and to consider abstaining from participating in consideration of the matter if to do so may suggest impropriety on their part. (See Chapter 22 for members stepping aside from serving on select committees.)
Guidelines on Ministers’ interests were first drawn up by a parliamentary select committee in 1956 following concern that a Minister may have allowed his official and business interests to be compromised.
These guidelines (known as the Harker rules, after the chairman of the select committee which prepared them) were replaced in 1990 by new guidelines on Ministers’ interests announced by the Prime Minister. The guidelines are now contained in the Cabinet Manual. The guidelines are not parliamentary rules or conventions and the Speaker has no role to play in interpreting them.
Questions about their operation may be addressed to the Prime Minister, as long as such questions are not an attempt to pry into a member’s private affairs and do not impute misconduct on the part of a Minister.
There are a number of requirements set out in the guidelines. First, Ministers are obliged to declare at Cabinet or at a Cabinet committee any personal interest which conflicts with a matter under consideration by the Government. They are similarly expected to declare in the House any interests they may have in a matter which is under discussion. (In addition, Ministers are as equally subject to the House’s rules on registering pecuniary interests and declaring financial interests as other members.) Secondly, Ministers are required to lodge with the Secretary of the Cabinet, as registrar, within two months of their appointment and at 31 December each year, a declaration of certain interests and assets that they hold. These declarations are subsequently presented to the House as a register of Ministers’ interests and published as a parliamentary paper (B.4). Any major change in a Minister’s assets during the year is to be notified to the registrar immediately. The types of interests that are required to be declared include: remunerated directorships or employment, ownership of shares and real property, and holdings of mortgage or debt instruments.
The register does not cover all assets and interests which a Minister may hold.
It is for Ministers to ensure that their returns are completed personally and are correct. The registrar facilitates the registration process, attempts to ensure consistency between declarations, and clarifies information where this is unclear. But the registrar does not provide legal or accounting advice to Ministers or police the register.
There are no set procedures on what happens if a Minister does not declare interests and assets within the rules. This would be a matter for the Prime Minister to consider.
The arrangements for determining the remuneration of members of Parliament have gone through a number of phases. For 30 years members voted expenses for themselves when passing the Government’s annual estimates of expenditure. In 1884 provision was made in permanent legislation for the payment of an expense allowance to members. In 1892 this was converted into a salary (payable in monthly instalments) and a travelling allowance. Parliamentary salaries and allowances were fixed at intervals by further legislation until 1950. In that year, a new scheme for determining parliamentary remuneration was introduced under which a Royal Commission was to be set up after each general election to recommend changes to members’ salaries and allowances. The commission’s recommendations were implemented by statute or by Order in Council as the case required. These arrangements were suspended in 1974 and abolished in 1977.
Salaries and allowances are now paid to members of Parliament at rates fixed by a statutory commission.
Originally the commission was known as the Higher Salaries Commission. It was renamed the Remuneration Authority on 1 April 2003.
The moneys required to pay members’ salaries and allowances are not required to be appropriated annually by Parliament, but are a permanent charge on the expenditure of the Government.
The Remuneration Authority has power to recommend different salaries and allowances for different office-holders, for the different electorates represented by members or for such other reasons as it considers justifiable.
The Remuneration Authority is a statutory commission that was first established in 1974 to determine the remuneration of a number of groups and individual office-holders. As well as determining the salaries, allowances and superannuation rights of members of Parliament, it carries out similar remuneration functions in respect of the judiciary and certain other statutory officers, including mayors and other elected members of local authorities. The authority has three members, each of whom is appointed by the Governor-General by Order in Council for a term not exceeding three years.
The authority must review and issue a fresh determination for the positions within its jurisdiction (except in respect of superannuation) at least once every three years.
In practice, the authority has issued annual determinations of salaries and allowances for members of Parliament. Any person is entitled to make written submissions to the authority. The authority is obliged to facilitate the making of written and oral submissions by representatives of the persons to be covered by a determination it is proposing to make.
For this purpose, in respect of parliamentary salaries and allowances, a joint caucus committee (not a select committee), known as the Members’ Services Committee, is invited by the authority to present its views to the authority on behalf of members of Parliament. When a determination is pending, the authority informs all members of their right to make individual submissions to it. The Members’ Services Committee also invites members to communicate with the committee so that it can present members’ views orally or in writing to the authority. The authority is also obliged, before making a determination relating to members’ salaries and allowances, to consult with the Commissioner of Inland Revenue about the tax consequences of a proposed determination and with the Speaker and the appropriate Minister about the services provided to members and Ministers.
Determinations of the authority are made known by a copy being delivered to the Speaker, the Prime Minister and the Leader of the Opposition, and by publication in the New Zealand Gazette.
A determination is deemed to be a regulation for the purposes of the Acts and Regulations Publication Act 1989 and is, therefore, published as a statutory regulation.
But a determination has effect in its own right
and is not subject to amendment or disallowance by the House. It is unlawful for any person to act contrary to a determination or to fail to observe the criteria or limits specified in it.
Concern that the authority did not have a legislative mandate to oversee the administration of its determinations or issue formal guidance as to how they are to be applied,
has led to power being conferred on the authority to determine issues about how any provision of a determination is to be interpreted or applied, or is to operate.
In determining parliamentary salaries, the authority is guided by the general statutory criteria set out in its constituent legislation and by specific factors which it has identified as being applicable to members of Parliament.
The authority is obliged to have regard to the need—
•to achieve and maintain fair relativity with levels of remuneration received else-where
•to be fair to the recipient of the remuneration and to the taxpayer
•to recruit and retain competent persons for membership of the House.
Further, the authority must take into account the requirements of the position and the conditions of service enjoyed by the person or persons in it, as compared to those of any comparable persons or group of persons.
The job of a member of Parliament is a full-time occupation and salaries of members have been fixed on this basis for many years. In making its determinations, the authority has consistently pointed out that it is not its role to pass judgment on the performance of any member. Its task is to determine a rate for the job, no matter who holds it and irrespective of their performance in it.
It is for the electors to judge the performance of members of Parliament.
In 2003 the salaries of members were realigned on a total package basis, including in them the remuneration element of certain allowances formerly paid to members and deducting from them the value of other benefits paid to members (such as non-official air travel). This produced an appropriate level of salary as the basis for future determinations.
For allowances the authority only has jurisdiction to fix basic expense allowances and allowances for specified office-holders. These allowances are to reflect genuine expenses of members. They are not designed as remuneration. In 2003 the allowances were realigned to exclude any estimated remuneration elements and to provide a basis for the future.
The services provided to members by the Parliamentary Service are taken into account by the authority in fixing members’ allowances.
Separate basic expense allowances have been determined for the Prime Minister, the Speaker and for members generally. The basic expense allowance is intended to cover out-of-pocket expenses incurred in carrying out parliamentary duties such as: entertainment, memberships and sponsorships, koha, donations and raffle tickets, gifts and prizes, flowers and wreaths, passport photos, clothing and grooming (for the Prime Minister only), briefcases and luggage, and meals.
Period for which salaries and allowances are payable
The periods for which members’ salaries and allowances are paid do not always coincide with the period for which the persons concerned hold office in law. The payment of salary and allowances to the Speaker and salary to the Deputy Speaker (formerly called Chairman of Committees) begins on the day of their respective appointments to office, and continues beyond the dissolution of Parliament until the first meeting of the next Parliament,
notwithstanding that the Speaker ceases to hold office on polling day
and the Deputy Speaker on the dissolution of Parliament.
The payment of an ordinary member’s salary and allowance commences on the day after polling day at the election at which the member was elected (notwithstanding that that person does not in law become a member of Parliament until the day after the day on which the writ is returned or the Chief Electoral Officer makes a return of party list members who have been elected
) and ends on the polling day for the next general election.
The payment of salary to a Minister commences on the day of appointment as Minister. Members cease to draw an ordinary member’s salary when they are appointed as Ministers.
A member who retires at a general election or is a defeated candidate at a general election receives a salary at the ordinary member’s rate that is payable at the time of the election for three months after polling day. In the case of a Minister or a Parliamentary Under-Secretary who retires or is a defeated candidate at a general election, ministerial salary continues to be paid until that person formally resigns, which may be up to a month after the date of the election. On this resignation taking effect, the former Minister or under-secretary is paid the salary payable to an ordinary member for the unexpired period of the three months from the election.
Similar provisions apply to a former Speaker and former Deputy Speaker who are unsuccessful candidates at the election. Their salaries and allowances as Speaker and Deputy Speaker continue until the new Parliament meets. When Parliament meets, they revert to the ordinary salary of a member for the remainder of the three-month period running from the election.
If a member’s election is overturned following an election petition, the salary and allowance payable to a member are still payable to that person for the period from polling day to the overturning of the election, since the ousted member was the member for that period. But where another person is declared elected in place of the originally returned member following an election petition, salary and allowance backdated to polling day are to be paid to the newly installed member, notwithstanding that that person was not, in law, the member for that period.
Payment of salaries and allowances
The salaries and allowances payable to parliamentarians are paid fortnightly.
Members’ salaries and allowances are payable, without specific annual appropriation, under permanent legislative authority.
As the payment of salary and allowances is made to a member under an Act of Parliament, the payment is mandatory and does not depend for its authority on any contract of service. It appears, therefore, that the payment cannot be waived.
The salaries and allowances in force as at 30 June 2005 are set out in Appendix 1.
While members are in law neither employees nor self-employed, for tax purposes they are treated as employees and income tax is deducted from their salaries at source.
They cannot claim tax deductions for expenses as if they were self-employed.
Expenses paid to members for travel, accommodation, attendance and communications services are exempt from income tax if they are determined by the Speaker (for members) and the Minister for Ministerial Services (for Ministers)
but fringe benefit tax is payable on any element of personal benefit involved in such expenses.
The superannuation rights of members differ depending upon whether or not they were members of Parliament on 30 June 1992, the date at which the Government Superannuation Fund was closed off to new members. Every person who was a member of Parliament on that date may continue to contribute to the parliamentary superannuation scheme established as part of the Government Superannuation Fund, for as long as they remain a member of Parliament. Once they cease to be a member by not being re-elected at a general election or by vacating their seat by resignation or otherwise, they also cease to be eligible to continue to contribute to the scheme and even if they subsequently return to Parliament they cannot rejoin it.
The parliamentary superannuation scheme will therefore, like the other schemes operated within the Government Superannuation Fund, gradually run down.
Members as at 30 June 1992
Those persons who were members of Parliament on 30 June 1992 and who remain continuously in office, may continue as contributors to the parliamentary superannuation scheme. (Though they also have the right to cease to contribute to the scheme and take a deferred pension or to receive a refund of their contributions.
Contributions are payable at the rate of 11 percent of an ordinary member’s salary. After 20 years’ service, the rate of contribution is reduced to eight percent. The scheme provides a retiring allowance of one-thirtieth of the ordinary member’s salary as at the date the retiring allowance first becomes payable, for every year of service up to a maximum of two-thirds of salary, plus one one hundred and twenty-eighth of salary for every year of service in excess of 20 years. The allowance is subject to cost-of-living adjustment. Up to 25 percent of the annual payment may be surrendered for a lump sum equal to 12 times the amount surrendered.
The retiring allowance is payable only to former members who have served for not less than nine years (continuously or in separate periods) and who are at least 50 years of age. A member who retires from the House before attaining the age of 50 after serving for at least nine years does not begin to receive the allowance until he or she is 50 years old. However, a former member can surrender a proportion of the future allowance for an immediate cash payout. Members who serve for eight years or less receive a refund of twice the amount of their contributions on ceasing to be members. (Because a member’s service is “rounded up” or “rounded down” to the nearest whole year depending on the date of election to the House, there can be no fractional parts of years served for superannuation purposes.) Any other former member can also elect to receive a refund of twice the amount of his or her contributions instead of receiving a retiring allowance.
A parliamentary superannuitant who again becomes a member of Parliament ceases to receive the retiring allowance during his or her new period in office. On the death of a member or a former member, the spouse of the member or former member receives an annuity at half the rate of the retiring allowance to which the deceased was entitled, payable until the spouse’s death.
The Remuneration Authority is empowered to consider and make determinations on the superannuation rights of members of Parliament who are contributors to the Government Superannuation Fund.
The authority is required to consult with the Government Superannuation Fund Authority and the Government Actuary before making a determination on parliamentary superannuation.
Any determination by the authority on parliamentary superannuation is made in the same form as its determinations on salaries and allowances. A determination may contain provisions which modify, or are to apply instead of, the provisions of the Government Superannuation Fund Act 1956.
Members elected after 30 June 1992
No specific superannuation scheme exists for members of Parliament first elected to the House, or re-elected after a period of absence, after 30 June 1992. Nor is there any compulsion on such members to contribute to any superannuation scheme.
However, provision has been made for a public subsidy to be paid to any superannuation scheme registered under the Superannuation Schemes Act 1989 which a member chooses to join. The Remuneration Authority has the function of considering and determining the maximum amount that may be paid by way of subsidy to such a scheme in respect of each member and the contribution that the member must make to that scheme in order to become entitled to the subsidy. For this purpose the authority may express the subsidy as a monetary amount or as a percentage of an ordinary member’s salary. The maximum amount that the authority fixes must be the same for all members.
Under the authority’s current determination, a member may receive a superannuation subsidy of 2.5 times the amount of the member’s contribution to a registered superannuation scheme, up to a maximum amount of subsidy equal to 16 percent of an ordinary member’s salary up to 31 October 2003 and 20 percent thereafter.
The maximum subsidy would therefore be payable (from 1 November 2003) if a member contributes eight percent of salary to a registered scheme. If a member contributes at a rate less than eight percent of salary, the subsidy payable reduces proportionately. The Crown’s liability to any superannuation scheme to which a member elects to contribute is limited to the payment of the subsidy as determined by the authority.
The subsidy as determined by the authority is paid out of public money under permanent legislative authority without the need for annual appropriation.
Travel, accommodation, attendance and communication services
The travel, accommodation, attendance and communication services to be provided to members are determined by the Speaker. Such services to be provided to Ministers are determined by the Minister for Ministerial Services.
The Speaker must take into account any advice on such services given by the Parliamentary Service Commission, and both the Speaker and the Minister must consult with the Commissioner of Inland Revenue about the tax consequences of a determination and with each other about the services determined by each.
The services may be provided in kind or by the payment of money by way of reimbursement.
A determination of services by the Speaker and the Minister is published as a regulation,
but is not subject to amendment or disallowance by the House. The regulation may incorporate by reference all or part of any other document that sets out the services to be provided to members.
The current determinations incorporate by reference travel, accommodation, attendance and communications services available to members and Ministers that are set out in separate documents approved by the Speaker and the Minister respectively.
describe in detail the air travel entitlements of members, their ability to use taxis, rental cars and other forms of transport in New Zealand, their access to chauffeured cars, their right to reimbursement of Wellington and other accommodation expenses, and the entitlements to use telephones, faxes and the internet. (See Appendix 2 for the services for members determined on 23 October 2003.)
Where services are incorporated by reference in a determination the funding for those services is appropriated annually. Otherwise funding for members’ services is provided under permanent legislative authority.
Other services for members
Apart from salaries and allowances and the travel, accommodation, attendance and communication services determined by the Speaker, members receive administrative and support services from the Parliamentary Service designed to assist them in the performance of their parliamentary duties. The moneys required to meet the cost of these other services must be appropriated annually. These administrative and support services are taken into account by the Remuneration Authority in fixing the rates of salaries and allowances payable to members.
The services to be provided to members are determined administratively by the Speaker each year after taking into account any advice and recommendations that are made by the Parliamentary Service Commission.
On receiving a written direction from the Speaker as to the services to be provided to members, the Parliamentary Service, under the direction of its General Manager, is responsible for providing those services.
These other services either take the form of the allocation of resources in kind to members or the allocation of support funding to parliamentary parties and members for the parties and the members to determine how to use the funding.
Services in kind
Members are provided with office accommodation for themselves and their executive secretaries in one of the buildings within the parliamentary complex. This is for the purpose of supporting members’ parliamentary responsibilities. While these are necessarily wide and varied and can include support for matters having a commercial or business connection, such as a regional promotion, they do not extend to members carrying on a business from within the parliamentary complex.
Office equipment, such as workstations and stationery, is provided for members’ use in Wellington. Members are entitled to use parliamentary letterhead for their own correspondence.
Every member has the assistance of an executive secretary in Wellington and an out-of-Parliament secretary in their out-of-Parliament offices. These staff are employed by the Parliamentary Service.
Distribution of mail to members
Mail posted to members of Parliament is not free, and should be stamped like any other mail. However, the Parliamentary Service has agreed to pay New Zealand Post Limited for unstamped mail addressed to members of Parliament at Parliament House.
Each member has a personal bill box situated in the Bills Office, which is used for the distribution of bills and papers presented to the House and certain other official publications. Other material which is for distribution to members within Parliament buildings and is personally addressed to a member may be delivered through the normal parliamentary internal delivery system, provided it has been posted or hand-delivered to Parliament House.
Support allocation funding
Funding is made available annually to parliamentary parties and members to support their parliamentary operations. For party leaders’ and whips’ offices this funding can be utilised to employ staff or purchase services from external providers. For individual members, funding is provided to cover the costs of such matters as: postal services, photocopying and printing, periodicals and newspapers, out-of-Parliament offices (first established in 1984), advertising, office equipment, training courses and conferences. The support allocation funding cannot be used to fund types of expenditure that are covered by the expense allowance fixed by the Remuneration Authority. Members are not permitted to use the support allocation funding to initiate legal proceedings,
though it may be used in some circumstances to defend legal proceedings brought against the member in his or her capacity as a member of Parliament.
In all cases the bulk allocation of support funding allows the parliamentary parties and the members to decide how to use their allocations within any conditions attached to them, provided that the total amount of the allocated funding is not exceeded.