Hutt South office lease arrangements

Mr Chris Bishop MP

24 June 2021

Tēnā koe Mr Bishop

Hutt South office lease arrangements

Thank you for your letters of 26 February, 30 March, and 4 June 2021. In those letters, you asked us to inquire into the sublease arrangements between Ginny Andersen MP, the Labour Party Hutt South branch (the branch), and the New Zealand Professional Firefighters Union (the Union).

You were concerned that the branch was profiting from the rental arrangement for the electorate office in Petone. Specifically, that the branch was billing the Parliamentary Service more than it was paying the Union (which owns the property) in rent and keeping the difference.

We understand that you have also raised these matters at the annual review hearing for the Parliamentary Service at the Governance and Administration Committee (the Committee). The Chief Executive of the Parliamentary Service has responded to the Committee and this response is available on the Committee’s webpage.¹ We note that he states that the rent paid by the Parliamentary Service is 25%-35% of the market value of other similarly located and sized premises.

We note that the Electoral Commission has determined that the Labour Party’s Hutt South branch should disclose the reduced rent it received as a donation.

After carefully considering our mandate, we have decided not to do further inquiry work in respect of the electorate office for the member of Parliament for the Hutt South electorate. We set out the reasons below.

Our role

Under the Public Audit Act 2001, the Auditor-General can inquire into a public organisation’s use of its resources. We cannot inquire into every concern raised with us. Instead, we exercise our discretion carefully and consider the seriousness of the issues raised, whether it is applicable to the broader public sector, the Auditor-General’s role under the Public Audit Act, and the purpose and benefits of an inquiry relative to the time and costs it takes to carry it out.  

We can look only at issues about public organisations. We do not have a mandate to look at the activities of private individuals or organisations in the private sector. If a private organisation receives funding from a public organisation, we can look at how the public organisation is managing the funding relationship, but not what the private organisation does with that money.

In this case, we do not have a mandate to inquire into the branch’s rental arrangements with the Union or to draw conclusions about the legitimacy of the profit margin between the rent the branch paid to the Union and what it charged to the Parliamentary Service.

As auditors, it is not our role to determine whether the Parliamentary Service or a member of Parliament has complied with the Speaker’s Directions or the Members of Parliament (Remuneration and Services) Act 2013. These are legal matters more appropriately addressed through other avenues.

However, we do have a role in monitoring government spending against appropriations to ensure that any appropriation breaches are identified and reported. All members of Parliament are entitled to funding through the Party and Member Support Multi-Year Appropriations. These appropriations are limited to funding the parliamentary parties to support their parliamentary operations during the term of each Parliament. This includes providing administrative and support services for each member of Parliament, which allows them to operate their electorate offices.

In this instance, we were satisfied that the expenditure had been incurred in line with the relevant appropriation and that there was no unappropriated expenditure.

As above, we note the responses by the Chief Executive of the Parliamentary Service to the questions that you asked in the Parliamentary Service’s annual review hearing.²

Thank you for writing to us. Given the public interest in this matter, I intend to publish this letter on our website.

Nāku noa, nā

David Lemmon
Inquiries Manager

1: Refer to letter to the Chairperson of the Governance and Administration Committee (dated 17 March 2021) at parliament.nz and 2019/20 Annual review of Office of the Clerk of the House of Representatives and Parliamentary Service – Further post hearing questions at parliament.nz.

2: Response to question 148, 2019/20 Annual review of Office of the Clerk of the House of Representatives and Parliamentary Service – Further post hearing questions at parliament.nz.