A.14 REPORT OF THE FOURTH TRIENNIAL PARLIAMENTARY APPROPRIATIONS REVIEW June 2010 INDEX 1. SUMMARY ................................................................................................ 1 Background ................................................................................................ 1 Principles for parliamentary funding ...................................................... 2 Parliamentary Service ............................................................................... 2 Funding entitlements ................................................................................. 3 Office of the Clerk ...................................................................................... 5 The way ahead ............................................................................................ 5 2. RECOMMENDATIONS ........................................................................... 7 Administrative and support services ........................................................ 7 Funding of MPs’ staffing entitlements ..................................................... 7 Parliamentary Service ............................................................................... 7 Funding entitlements: general .................................................................. 8 Travel entitlements .................................................................................... 8 Wellington accommodation entitlement .................................................. 8 Individual member support ...................................................................... 9 Office of the Clerk ...................................................................................... 9 Transition period ..................................................................................... 10 3. TERMS OF REFERENCE ..................................................................... 11 Statutory terms of reference ................................................................... 11 Agreed terms of reference: Parliamentary Service .............................. 12 The adequacy of funding levels for Parliament and MPs .................... 13 Agreed terms of reference: Office of the Clerk ..................................... 13 4. REPORT STRUCTURE ......................................................................... 14 Overview ................................................................................................... 14 5. CONTEXT ................................................................................................ 16 Introduction .............................................................................................. 16 The review process ................................................................................... 16 Principles for parliamentary funding .................................................... 17 6. BACKGROUND ...................................................................................... 20 The parliamentary precincts ................................................................... 20 Parliamentary Service ............................................................................. 20 Office of the Clerk .................................................................................... 21 Overall trends in expenditure .................................................................21 7. ADMINISTRATIVE AND SUPPORT SERVICES ............................. 26 Introduction .............................................................................................. 26 An overview of the appropriations ......................................................... 26 Expenditure trends .................................................................................. 26 Key issues .................................................................................................. 28 Shared services ......................................................................................... 29 Funding of MPs’ staffing entitlements ...................................................34 i Employment relationship ........................................................................ 36 Parliament buildings ................................................................................ 38 Security ..................................................................................................... 39 Administration of MPs’ entitlements ..................................................... 39 Performance indicators ........................................................................... 41 The classification of expenditure ............................................................ 41 8. FUNDING ENTITLEMENTS FOR PARLIAMENTARY PURPOSES ............................................................................................... 42 Introduction .............................................................................................. 42 Overview of the current regime .............................................................. 42 Concerns with the current regime .......................................................... 45 Our preferred approach .......................................................................... 47 Non-departmental expenditure trends ...................................................48 Travel expenditure ................................................................................... 49 International travel entitlements ............................................................ 50 Domestic travel entitlements ................................................................... 54 Former MPs’ travel entitlements ........................................................... 58 Wellington accommodation entitlement ................................................ 60 Party and Member Support entitlements .............................................. 68 9. OFFICE OF THE CLERK APPROPRIATIONS ................................ 75 Introduction .............................................................................................. 75 Overview ................................................................................................... 75 Trends in expenditure ............................................................................. 75 Trends in the quantity and quality of outputs ...................................... 77 Technological change and staff capability ............................................. 81 Inter-parliamentary travel and professional development .................. 83 10. IMPLEMENTATION AND TRANSITIONAL ARRANGEMENTS 84 11. CONCLUSIONS ...................................................................................... 85 12. APPENDICES .......................................................................................... 86 Appendix one – The Fourth Appropriations Review Committee ....... 86 Appendix two – Discussions held and submissions received ................ 87 Appendix three – Trends in Parliamentary Service expenditure ........ 91 Appendix four – The 25 largest electorates ........................................... 94 ii 1. SUMMARY Background 1.1 The Parliamentary Appropriations Review Committee is tasked under the Parliamentary Service Act 2000 with reviewing the amounts of the appropriations for services provided to Parliament and members of Parliament (MPs) and the funding entitlements for parliamentary purposes. The terms of reference for our review are provided in section 3 of this report. 1.2 There are three groups of appropriations relevant to our review: ••• the Parliamentary Service departmental appropriations of around $65m. These appropriations cover the Parliamentary Service’s day to day activities including running and maintaining the parliamentary precincts and employment of MPs’ support staff both within and outside Parliament; ••• the Parliamentary Service non-departmental appropriations of around $55m. These appropriations cover the funding entitlements for Parliament and include MPs’ salaries, allowances and entitlements, including funding of MPs’ out-of-Parliament offices; and ••• the Office of the Clerk of the House of Representatives (Office of the Clerk) appropriations of around $19m. These appropriations cover the provision of secretariat services to the House and services related to inter-parliamentary relations. 1.3 There has been continuing growth in expenditure in these three areas over much of the last two decades, with total spending increasing from $54m in 1991 to almost $140m by 2009. Over the last five years (from 2004 to 2009), Parliamentary Service departmental expenditure has increased in real terms (ie, over and above the rate of inflation) by 5.9% per annum (p.a.) and expenditure by the Office of the Clerk has increased in real terms by 6.7% p.a., while non-departmental spending has declined in real terms by 1.5% p.a. Over the 18 years since 1991, the number of staff employed has increased from 4.2 per MP to 6 per MP. 1.4 Our review has been undertaken in an environment of economic downturn where a key focus in the public sector is a drive for better value for money. 1.5 We are concerned that the rate of growth in expenditure by the Parliamentary Service departmental and the Office of the Clerk in recent years exceeds by a wide margin the rate of growth in the economy (which has averaged 1.4% p.a. in real terms over the five years to 2009). Our view is that this trend is not sustainable and needs to be checked. 1 Principles for parliamentary funding 1.6 The