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Christopher Luxon won’t claim $52k accommodation allowance, to repay $13,000 amid Labour claims of ‘hypocrisy’

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Prime Minister Christopher Luxon will no longer claim a $52,000 accommodation allowance for living in the Wellington apartment he owns – and will re-pay $13,000.

His U-turn came mere hours after he told media in Queenstown that he was entitled to claim the money. Earlier today it was revealed he was claiming an 11 per cent top up to his own $471,000 salary in the form of a $52,000 optional accommodation allowance.

The allowance is meant to pay for Luxon to find accommodation in Wellington. However, few prime ministers have claimed it – Luxon is the first in at least 34 years.

Speaking to Newstalk ZB’s Heather du Plessis-Allan this evening, Luxon said he was now going to return all the money he had received since becoming Prime Minister.

Luxon said the issue had become a “distraction” he did not want to deal with, so he had rolled back his defence of claiming the allowance.

He would pay back $13,000, which had only just been deposited into his bank account recently.

Speaking to reporters in Queenstown earlier today Luxon was adamant he was entitled to the allowance.

“As I came away [from a press conference] I thought ‘wow, people are pretty fixated on the allowance’. I thought ‘what’s going on’.”

Luxon said he then listened to Newstalk ZB and heard the discussion on talkback.

He then changed his mind about the allowance.

“For me, I’m well within the rights, and well within the rules, but frankly it’s a distraction- I will live on my own costs,” Luxon told du Plessis-Allan.

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Earlier: ‘It’s an entitlement and I’m well within the rules’

Luxon had insisted earlier this afternoon he was “entitled” to claim a $52,000 optional allowance to live in the Wellington apartment he owns, while he leads a Government demanding the public service find savings of up to 7.5 per cent from their budgets.

The allowance is meant to pay for Luxon to find accommodation in Wellington. However, few Prime Ministers have claimed it – Luxon is the first in at least 34 years.

Out-of-towners like Jacinda Ardern have opted to live in the Prime Minister’s official residence, Premier House, for free. Other Prime Ministers like Chris Hipkins and Bill English were already based in Wellington.

English claimed an allowance but decided to pay it back after it was revealed he claimed nearly $1000 a week to live in his family home, which was officially deemed a ministerial residence.

A spokesperson for the Prime Minister said Luxon was “claiming an accommodation allowance on his Wellington apartment in accordance with the rules”.

Luxon, speaking from Queenstown, said he wanted to live in Premier House but couldn’t because of “maintenance issues”.

In the meantime, he stayed at his apartment and was able to claim the allowance because he was not a Wellington MP.

“It’s an entitlement and I’m well within the rules,” he told journalists.

“I’m entitled to the entitlements that everyone else has.”

He said it was his intention to live in Premier House “as quick as I can”.

Labour blasts ‘absolutely hypocritical’ Luxon

Hipkins says he did not think Luxon should take the allowance, given he could live in Premier House for free.

“Christopher Luxon is treating hard-working Kiwis like a bottomless ATM. He needs to apply his own tough love standard to himself,” the Labour leader said.

“Christopher Luxon has access to a free house. The prime ministerial residence is available for free to every prime minister, and it’s a residence that’s been good enough for every prime minister up to Christopher Luxon.”

“I think it’s absolutely hypocritical for Christopher Luxon to be saying that every other New Zealander needs to stomach cuts while he’s claiming $52,000 a year.

“That’s $1000 a week allowance to live in his own house mortgage-free.”

Hipkins wouldn’t go as far as to say Luxon should pay back what allowance he had claimed.

“If he wants to live in his own apartment, I think that’s fine, but he shouldn’t be asking the taxpayers to subsidise that when there is a free house just down the road that he could move into today.”

While Luxon said he couldn’t live in Premier House due to “maintenance issues”, Hipkins said it was “certainly liveable”, while acknowledging it hadn’t seen any work since the 1990s and had certain “structural issues”.

Hipkins clarified it was safe to live in.

Hipkins was asked whether the rules allowing politicians in some circumstances to claim publicly-funded allowances on homes and offices they held.

He wouldn’t answer whether he felt the rules should change, but did acknowledge there was a difference between a politician not from Wellington claiming an allowance on a property they paid a mortgage on, compared to a politician paying for a hotel.

Given Hipkins was a Wellington-based MP during his time as PM, he wasn’t able to claim the allowance even though he chose to live in his own home, not at Premier House.

PM owns seven properties

Luxon already owns an apartment in Wellington, where he lives when in the capital. It is one of seven properties owned by Luxon, all of which are held without mortgages according to Parliament’s pecuniary interests register. The $52,000 allowance will cover his costs while living in the apartment.

Prime Minister Christopher Luxon and Finance Minister Nicola Willis campaigned on cutting public spending. Photo / Mark Mitchell
Prime Minister Christopher Luxon and Finance Minister Nicola Willis campaigned on cutting public spending. Photo / Mark Mitchell

The news that Luxon, already one of New Zealand’s wealthiest Prime Ministers, will become the first in decades to claim the allowance comes at an awkward time for the Government, which is asking ministries to find savings of between 6.5 and 7.5 per cent – with some exclusions.

The Government is also trimming back on the welfare bill by strictly enforcing benefit sanctions and changing the way benefits are calculated, which will mean someone on a supported living payment, the modern disability benefit, would miss out on $2300 a year by 2028.

Prime Ministers have frequently complained about the condition of Premier House. Deputy Prime Minister Grant Robertson described the upstairs living quarters as resembling a 1980s motel. Ardern nevertheless stayed at the residence with her family.

The previous Government commissioned a report into the work needed on Premier House. This report has been received and the Government is currently considering its options.

“As has been reported, the Premier House Board Report suggests Premier House requires a significant amount of work so the Prime Minister is considering that before making any decisions around residing there,” a spokesman for the Prime Minister said.

Luxon is not the only MP to claim an accommodation allowance while owning a place in Wellington. Figures released this week show 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 all claimed the allowance last year despite owning property in the capital.

Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.

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