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The Hutt South wing of the Labor Party has been running a seemingly unusual sublease “deal” in which you get a cheap rent of an office space from a local union, sublease the rooms to your local roster, MP Ginny Andersen, and then bills parliament with a profit margin, pocketing the difference.
The parliamentary service pays the rent for the deputies’ offices in bulk. Accounts viewed by Stuff for the Hutt South wing of the Labor Party, home of Andersen, show a sublease arrangement in which Parliament pays the local Labor Party significantly more in rent than the Labor Party actually pays the original owner, the Professional Firefighters Union of New Zealand (NZPFU).
Accounts viewed by Stuff They appear to show $ 6,000 of public money that went into a Labor Party account for “rent” in 2019, but with only a quarter of that money, $ 1,500 a year, actually going to the owner of the building.
Parliament’s rules allow this type of sublease agreement. For the purpose of Parliament, the Labor Party is simply another commercially owned company that rents office space to a parliamentarian.
But unlike any commercially-owned company, the margin collected by the Party did not go into investors’ pockets, but into a private work account. That money is then free for the Labor Party to use on things like campaigning.
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When initially approached for comment, Andersen questioned the figures and declined to comment further.
“Those figures are not correct,” he said.
But a member of Andersen’s electorate committee, Graeme Sharman, said Stuff that the figures were in themselves correct, but that they “did not tell the whole story,” although he did not mean what the full story was.
A day later, Andersen decided to comment, saying that “the rental agreement was signed by Parliamentary Services and is within the rules.”
“The rent is very cheap and represents good value for money for taxpayers, renting electoral offices to private owners generally costs tens of thousands of dollars a year.
“This is a long-standing arrangement, dating back decades, that Parliamentary Services knows about and saves taxpayers,” he said.
PINK WOODS / THINGS
The local electorate of Labor MP Ginny Andersen has been subletting office space to Parliament by a margin.
‘A very good deal’
Andersen was endorsed by the Parliamentary Service, who said the rent represented “a very good deal.”
“The Parliamentary Service pays office leasing costs on behalf of members from their funding rights. These rights are established and governed by the Instructions for Speakers.
“The arrangement you mention has caught our attention before. We can confirm that the rent paid for the member’s office is substantially below market value and represents a very good deal for the taxpayer, ”said a spokesman for the Parliamentary Service.
Hutt South Labor Elections Committee (LEC) accounts show that the amount the NZPFU charges for rent is well below what the Parliamentary Service pays Labor for rooms.
The local Labor Party was the original owner of the building and has rented rooms in it since it was sold to the NZPFU in 1993. It appears that the party has a long-standing agreement with the NZPFU, dating back to when Speaker of Parliament Trevor Mallard, was the local MP.
Stuff reported in 2009 that Mallard and Palmerston North MP Iain Lees-Galloway both sublet rooms from the party. Back then, no other party used this arrangement.
MATTHEW TSO
The Petone Electorate Office of Labor MP Ginny Andersen on Jackson St.
Pocket the profits
Stuff you have seen the draft 2020 AGM financial statements from the Labor Election Commission (LEC), which covers calendar year 2019. They record retroactive rent payments to the NZPFU of $ 3,000, although they do not say for what years that retroactive rent is.
A lease agreement shows that the rent collected by the fire union was $ 1,500 a year paid in advance, suggesting that the retroactive rent was for the years 2018 and 2019.
The accounts also show rental income: this is the money that the LEC charges Parliament for subletting the rooms. This records two payments of $ 3,000, for a total of $ 6,000 over the course of 2019. This money appears to come from the Parliamentary Service.
The difference, which amounts to $ 4,500, goes to LEC accounts, where it can be spent on party activities.
The 2017 campaign results show that Andersen spent $ 5,491 on personal campaign expenses and $ 17,442 on shared expenses with the Labor Party as a whole. LEC accounts show that she spent part of her income on campaigns, giving $ 3,000 to Hutt City electoral candidates in the 2019 local body elections.
Cameron Burnell / Dominion Post
Ginny Andersen on the election campaign in 2017.
A rental agreement from the beginning of the period shows that $ 1500 was the initial amount charged by the NZPFU, although the union and the party suggested that it is now charging more after rewriting the agreement during this period.
Of the money paid to the LEC for the rent, $ 3,000 went to an account at the Petone branch (which was later included in the Hutt South LEC) and another $ 3,000 went to an account called the NZ Labor Party Hutt South LEC.
The accounts come from the party’s AGM 2020 and are for the 2019 calendar year.
They show the first $ 3,000 in rental income labeled for January-July for receipts to the Petone branch and the second payment of $ 3,000 labeled for July onward. This second payment went to the LEC, apparently acknowledging the change in tenure from the Petone branch to the Hutt Valley LEC.
This information has come to light after the tenure of the office was changed from the Petone branch of the Labor Party, which is now defunct, to the LEC Hutt South.
The LEC minutes from the 2019 meeting show that the Hutt South LEC was not paying the rent for the building in 2018, because the tenant was a separate part of the Labor Party, the Petone branch. This is supported by the accounts of the parts of the calendar year 2018.
The minutes of that meeting mention that the Petone branch “only continued to operate because it is listed as a tenant of the Petone office.”
The accounts appear to have merged after the 2019 AGM.
Sharman said the numbers on the accounts were themselves accurate, but did not give an accurate picture of the electorate’s finances.
“The numbers do not give an accurate picture. I can’t go into the details of how it doesn’t work or why it doesn’t, ”Sharman said.
He said there was a “larger story” that went beyond the 2019 accounts, which explained the unusual rental situation of the LEC.
“They [the accounts] tell the story of that year, what they don’t tell is a larger story, ”Sharman said. “There is much more”.
NZPFU Secretary Joanne Watson declined to comment for this story, but would only say that the original rental agreement, dated for a three-year period from December 2017 to November 2020, was “an old document” and had been replaced by a different agreement. they probably charge a higher rent.
She did not disclose any details of this agreement, including whether it charged a higher amount of rent.
“I am not prepared to discuss our trade agreements publicly,” Watson said.
Stuff You have seen the rental agreement with the NZPFU. It stipulates that the Petone de Labor branch will pay $ 1,500 a year for three years for two rooms and a meeting room. This agreement is now out of date and Stuff You haven’t seen the new deal.
A matter of donations
From Parliament’s perspective, below-market rents represent a very good deal. How the Labor Party behaves in the electorate is none of your business.
“If the local branch of the Labor Party that rents the space to the member has managed to lease the property for even less, then it is reasonable to assume that the lessor is making an in-kind donation to the Labor Party,” said a spokesman. for the Parliamentary Service, he said.
However, Andersen denied that the rental was a donation, saying the decades-old deal with the NZPFU was “commercial.”
“The continued provision of office space for Labor was part of a business deal when Labor sold the building to the Firefighters Unions in the early 1990s.
“This provision was reflected in the sale price of the building. As such, that trade agreement does not constitute a donation, ”Andersen said.
