Funding for Hon Peter Dunne

25 June 2013

On 6 June 2013, the Hon Trevor Mallard wrote to the Office of the Auditor-General. Below is the reply that we have sent.

25 June 2013

File Ref: EN/GVT-0017

Hon Trevor Mallard
PO Box 18 888
Parliament Buildings
Wellington 6011

Dear Mr Mallard

Funding for Hon Peter Dunne

1. I refer to your letter of 6 June 2013 in which you ask me to confirm whether funding being provided to Hon Peter Dunne’s office is being spent within the scope and purpose for which it was appropriated and, if it is not, to take steps to ensure that the funding ceases.

2. Your request follows the de-registration of the United Future Party by the Electoral Commission, and the subsequent question that was raised about whether United Future is still recognised as a party for parliamentary purposes under Standing Order 34(1).

3. On 6 June 2013, the Speaker of the House issued a ruling in which he said he had given United Future a period of approximately six to eight weeks to re-register under the Electoral Act, but that in the meantime the United Future Party remains a ‘recognised party’.

4. We considered your request in terms of the Auditor-General’s responsibilities as Controller under section 15(2) of the Public Audit Act 2001, and sections 65Y to 65ZA of the Public Finance Act 1989.

5. The Controller is required to provide independent assurance to Parliament that the expenses and capital expenditure of government departments and Officers of Parliament have been incurred for purposes that are both:

  • within the scope of the relevant appropriation (or other parliamentary authority); and
  • in accordance with the lawful authority provided by Parliament for the activity concerned.

6. In considering your request, we have therefore reviewed the terms of the appropriation and the relevant legislation. The relevant legislation in this case is the Parliamentary Service Act 2000, which incorporates by reference Directions by the Speaker. 

7. We have also taken into account the relevant Standing Orders of the House, and the terms of the Speaker’s ruling on 6 June 2013.

8. Having reviewed these documents, I am satisfied that, for as long as United Future continues to be recognised by the Speaker as a party for parliamentary purposes under the Standing Orders of the House, there is lawful authority for the payments that are being made to it under the relevant appropriation. It follows that if the Speaker determines that United Future is no longer entitled to be recognised as a party for parliamentary purposes, its funding entitlements will change accordingly.

9. In the rest of this letter I have explained our reasoning in more detail, beginning first with the appropriation.

The appropriation

10. The relevant appropriation is set out in the Appropriations (2012/2013 Estimates) Act 2012.

11. Under that Act the ‘Party and Member Support’ for United Future for the financial year 2012/2013 is set at $187,000. Actual expenditure against this appropriation as at 31 May 2013 was $83,415.00.

12. According to the Estimates of Appropriations 2012/13, the scope of this appropriation is:
‘limited to funding for the United Future parliamentary party to support its Leader’s office, research operations, member’s and, during the immediate post-election period, electoral candidates’ and former members’ parliamentary operations as allowed under directions given by the Speaker.’

13. The appropriation provides for payments to be made to the ‘United Future parliamentary party’ and is to be used for various purposes ‘as allowed under directions given by the Speaker’.

14. The appropriation itself does not specify that the party must be registered under the Electoral Act 1993 or ‘recognised’ under Standing Orders. However, the appropriation by itself is not lawful authority to engage in a particular activity. The activity must also have the necessary parliamentary authority.

15. In the case of funding entitlements for parliamentary parties and members, that requires us to consider the Parliamentary Service Act 2000, which incorporates by reference the Speaker’s Directions.

The Parliamentary Service Act 2000and Speaker’s Directions

16. Like the appropriation, the Parliamentary Service Act requires funding entitlements to be administered in accordance with directions given by the Speaker.1 The Speaker’s Directions are set out in the ‘Directions of the Speaker of the House of Representatives 2011’.

17. Both the Parliamentary Service Act and Speaker’s Directions contemplate that funding entitlements for parliamentary purposes are intended for ‘recognised’ parties.2 The term ‘recognised party’ is defined in the Parliamentary Service Act as ‘a political party for the time being recognised for parliamentary purposes under the Standing Orders of the House of Representatives.’3

18. The allocation of party and member funding is set out in Part 4 of the Speaker’s Directions. It includes:

  • an annual allocation of $100,000 (excluding GST) for each party, plus $64,320 (excluding GST) per non-Executive member in the caucus, which can be used to fund the party leader’s office4
  • an annual allocation of $22,000 (excluding GST) per member in the caucus to fund the whip’s office and research operations5;
  • allocations for individual members of varying amounts depending on whether they are constituency or list members6

Standing Orders

19. The recognition of political parties is addressed in Standing Order 34.

20. Under Standing Order 34 a political party ‘registered under Part 4 of the Electoral Act 1993, and in whose interest a member was elected at the preceding general election of at any subsequent by-election’ is entitled to be recognised as a party for parliamentary purposes.

21. Our understanding is that, according to parliamentary practice, parties are recognised by the Speaker, and that the Speaker recognised United Future as a party for parliamentary purposes following the general election in in 2011.

In his statement on the status of the United Future party following its de-registration by the Electoral Commission, the Speaker says that:

  • Standing Order 34 is silent on whether a party that ceases to be registered under the Electoral Act 1993 during the term of a parliament is entitled to be recognised, and gives the Speaker no express authority to cease to recognise a party on that basis;
  • He has been given an assurance that United Future intends to file an application for re-registration, and that checks by the Electoral Commission are likely to take 6 to 8 weeks;
  • The Speaker is responsible for ruling when questions of interpretation or application of the Standing Orders arise, and for cases not otherwise provided for in the Standing Orders.
  • He will rule on the application of Standing Order 34 ‘if required’;
  • In the meantime, the United Future Party remains a recognised party under the Standing Orders.

23. It seems to us that the effect of the Speaker’s ruling on 6 June 2013 is that, although the United Future party has been de-registered under the Electoral Act 1993, it remains for the time being recognised for parliamentary purposes. We note that the interpretation of Standing Orders is a matter for the Speaker in the first instance under Standing Order 2.

24. Accordingly, in our view the payment of funding entitlements for Mr Dunne, in his capacity as leader of the United Future Party, is lawful because the funding is:

  • within the scope of the relevant appropriation;
  • authorised under the Parliamentary Service Act 2000, in that the funding is for a party that is ‘for the time being recognised under the Standing Orders of the House of Representatives’; and
  • allocated for purposes authorised by the Speaker under clauses 4.5 and 4.6 of the Speaker’s Directions 2011.

25. If the Speaker determines that the United Future party is no longer entitled to be recognised as a party for parliamentary purposes, its funding entitlements will change accordingly.

Yours sincerely

Signature - LP

Lyn Provost
Controller and Auditor-General

1: Parliamentary Services Act 2000, section 7(b)

2: Parliamentary Services Act 2000, section 3B(1)(b); Speaker’s Directions, clause 2.6(1)(b)

3: Parliamentary Services Act 2000, section 3 (Interpretation)

4: Speaker’s Directions, clause 4.5

5: Speaker’s Directions, clause 4.6

6: Speaker’s Directions, clause 4.7