Chris Luxon and his seven properties (Image: Tina Tiller)
Of course Christopher Luxon is claiming an accommodation allowance to live in his own apartment. That’s the rich way, writes Mad Chapman.
The prime minister is rich. He earns a high salary as prime minister ($471,000 a year to be precise, much less than his $4.2m salary as CEO of Air New Zealand) but a high salary is not how one stays rich, because a salary can go away. The way to get rich, according to Robert Kiyosaki (Rich Dad, Poor Dad) and every other financial self-help book author, is to have passive income. More specifically, a way to earn money without actually having to do any work for it. In New Zealand, the most straightforward way to own an appreciating asset that will earn you money even if you do absolutely nothing to it is property. Christopher Luxon knows this, which is why he own seven properties and those properties will make him richer than a prime minister’s salary ever could.
The next level is to own properties that appreciate while also having someone else pay the interim costs (like mortgage and rates and insurance). In other words, renting out your property. Luxon knows this too, which is why four of his seven properties are investments, earning income from tenants and paying their own way. That’s passive income, baby!
But even property investors have to live in a house and therefore pay their own mortgage or rent at some point. And even property investors have to deal, in some way, with the people renting their properties, so there’s a smidge of work involved there.
Christopher Luxon speaks at parliament (Photo by Hagen Hopkins/Getty Images)
Only now Luxon has ascended to the highest plane of passive income – truly the boss level – by claiming $52,000 in accommodation allowance in order to live in his own apartment in Wellington, an apartment that has no mortgage. The only thing better than having someone else pay your mortgage is to have someone else pay your mortgage and that someone else not even live in your house and also you have no mortgage.
Now, there are wrinkles to this story. Lots of MPs get an accommodation allowance because they have to spend a lot of time in Wellington and may not already live there. That makes sense, sure. And if Luxon had purchased an apartment this year in order to live in it for work, it would make sense for that allowance to be used to help pay for the costs of the apartment. But he already owns the apartment, it has few costs (there’ll be bodycorp fees, rates and insurance, so at the high end that would be $18,000 a year, but also you have an asset) and yet he is still claiming the allowance. Yes of course he is entitled to it, and as a businessman he’d know there’s no greater passive income than one you don’t even need.
So why claim it? Why claim it when it has been proven to be a foolish political move (see: Bill English in 2009)? Why claim it when $52,000 for someone of Luxon’s wealth is barely worth the hassle? Because the rich stay rich by pretending to be poor. The rich know how to claim expenses on their tax bill for every little thing. The rich know how to use a trust to not appear to be earning money. The rich know how to present their salaries so that their kids can get student allowance at university. The rich will always, always, suggest splitting the bill at dinner. You don’t stay rich by throwing money away – or not accepting free money when it’s offered.
Luxon wouldn’t have thought twice about claiming the taxpayer-funded allowance even though he doesn’t need it. He knows that passive income is how you stay rich, and why turn that down? It’s the smart thing to do, he’d say. If anyone else was in his position, they’d do it too, he’d argue.
But pretending to be poor for benefits only works if you’re rich. If you’re poor, you better pick yourself up by your bootstraps, stop trying to get money for nothing, and get to work.
Keep going!
From top to bottom, Robert Schofield, Trevor Robinson, Jane Black, David McMahon, Heike Lutz, Rawiri Faulkner, Liz Burge and Lindsay Daysh, the independent hearings panellists for Wellington’s District Plan
From top to bottom, Robert Schofield, Trevor Robinson, Jane Black, David McMahon, Heike Lutz, Rawiri Faulkner, Liz Burge and Lindsay Daysh, the independent hearings panellists for Wellington’s District Plan
The independent hearings panel for Wellington’s new District Plan has attracted criticism from all sides for its controversial decisions to reduce housing capacity. But who are they?
What is an independent hearings panel?
First of all, the independent hearings panel is not elected. They are not councillors, nor are they council staff. That’s why they are “independent”.
IHPs are a specific requirement set out in the Resource Management Act when councils are making District Plan changes. It’s their job to listen to all the submitters, weigh up all the evidence presented, and make recommendations to the council based on that evidence.
Effectively, everyone who wants to have input on the District Plan presents to the IHP, who weigh up the evidence and act as judge and jury.
This is a good idea for a number of reasons. District Plan hearings take ages, and councillors simply don’t have enough time to sit through the whole thing. Many of the issues are really technical and require specific background knowledge. And, in theory, IHPs should be less biased than elected officials, who are elected with specific agendas and mandates.
What qualifications do you need to be on an independent hearings panel?
At a bare minimum, you need to be accredited as a commissioner under the Resource Management Act. To do that, you need to complete a course called “Making Good Decisions“. It takes two days, and costs $2,400+GST. Chairs need to need to take an additional one-day course that costs $1,768+GST. Most commissioners also have extensive experience in planning, architecture, law, or a similar field.
There are 1138 accredited commissioners in New Zealand. Commissioners don’t just act on IHPs, they can adjudicate pretty much any controversial land or water-related issue a council might face. Several of the IHP members have made decisions on behalf of Wellington City Council before.
How was the Wellington IHP hired?
Wellington City Council listed the job ad on the Government Electronic Tendering Service, GETS. The application asked for commissioners with expertise in resource management, urban design, heritage, with knowledge of tikanga Māori, and “a high degree of empathy and professionalism”.
The council received eight applications through the GETS process and hired six of them. Councillors appointed the panel in a public-excluded meeting on December 8, 2022. The council did not specify how it hired the other two members of the eight-person panel.
There were three factors that were meant to be considered for hiring the IHP: capability (based on their CV), availability (they needed to commit to a 12-month process) and price (panellists had to provide an hourly or daily rate). The Spinoff asked Wellington City Council what the panel’s rate was, but the council was not able to confirm that information before publication.
Avoid unnecessary formality and allow all parties the opportunity to be heard, whether they are presenting written or verbal evidence.
Be efficient, to minimise time and costs.
Recognise tikanga Māori.
Recognise New Zealand sign language.
Members of the IHP were also required to disclose any actual or perceived conflict of interest, including:
If they have previously advocated for any position that would be affected by the District Plan.
If they have previously represented anyone who has submitted on the District Plan or would be affected by it.
If they have any personal financial interest, “including but not limited to an interest in property,
which may result in an actual or perceived conflict of interest and/or bias”.
Who are the panellists?
Trevor Robinson, chair
Robinson is the trustee of a $2.13m house in central Kelburn, right on the edge of the walkable catchment. It is listed on the conflict of interest register.
A lawyer in the environment field focused mostly on resource management, he was previously partner at Buddle Finlay, and is now a barrister at Shakespeare Chambers.
He listed two other conflicts of interest: Waka Kotahi, which he has acted both for and against, and the NZ Deerstalkers Association. He was also a member of IHPs for decisions by the Waikato Regional Council and the Queenstown Lakes District Council.
Robert Schofield, deputy chair
Schofield owns a property in Brooklyn with an estimated value $1.57m. He did not list it on the conflict of interest register. He is employed by Boffa Miskel, the consulting firm which wrote the council’s main report on character areas. He recused himself from several hearings involving character areas and other clients of Boffa Miskel.
He has 40 years of experience in planning, mostly in the Wellington area. He chaired the IHP for the Central Hawke’s Bay District Council.
Heike Lutz
Lutz is a director of Building Conservation Consultants Ltd, which provides expert advice on heritage buildings. She holds a master’s degree in architecture. She listed conflicts of interest due to previous professional relationships with Wellington Heritage Professionals and property developer Argosy.
Liz Burge
Burge is employed by Tomlinson and Carruthers Surveyors in Masterton. She listed a conflict of interest to Muaūpoko Tribal Authority Inc, because she is a whāngai of Rangitāne o Wairarapa. She also listed a conflict to the NZ Motor Caravan Association, which she has represented previously.
Lindsay Daysh
Daysh owns a property in Island Bay with an estimated value $1.29m. He did not list it on the conflict of interest register.
He is a director of Incite, a resource management consultancy. He is accredited as a chair and acted as a commissioner for several other decisions in Wellington. He listed conflicts of interest with Wellington City Council, Centreport, Wellington International Airport, Meridian Energy, Vodafone, Chorus, KiwiRail, Waka Kotahi, and the developers of the former Mount Crawford prison site.
His brother and sister-in-law, Stephen and Lisa Daysh, are trustees of the same $2.13m Kelburn property as Trevor Robinson.
Jane Black
Black owns a property in Mount Victoria with an estimated value of $1m. She did not list it on the conflict of interest register. The property is on a street where the panel recommended expanding character areas, though she was not directly involved in the decision.
Black has 30 years’ experience in urban planning and design, is on the board of Wellington Waterfront Limited, and chairs the Community Reference Group for Kāinga Ora, a forum for neighbours to raise complaints or concerns about Kāinga Ora developments.
Rawiri Faulkner
Faulkner is a director of Tū Taiao Limited which specialises in project and relationship management, planning, policy, strategy and facilitation.
He listed conflicts of interest to Kāinga Ora, which he had worked for previously, and Ngāti Toa, through whakapapa, though he had no involvement with the iwi’s submissions.
David McMahon
McMahon owns a property in Island Bay worth $870k and an apartment in Te Aro (Victoria Lane). He did not list either of them on the conflict of interest register.
He is a director of RMG, a resource and environmental management consultancy.
He listed conflicts of interest with the Wellington City Council, the Wellington Waterfront, Gordon Wilson flats, and Go Media. He is the deputy chair of the Christchurch IHP.
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What will happen next?
The recommendations of the independent hearings panel are not final. Wellington city councillors still have the chance to make changes to the District Plan in a meeting on March 14, as long as they can get a majority vote for their amendments. Any changes the council makes will need to be signed off by housing minister Chris Bishop.
How to follow along
If you want to stay on top of everything that happens throughout this process, subscribe to The Spinoff’s War for Wellington newsletter. Every week, we’ll send a roundup of the most important stories about the District Plan process and the future of housing in Wellington. It will include highlights from our own coverage, perspectives from experts and activists, and the best reporting from other media around Wellington.
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