Political finance scandals continue to plague New Zealand parliamentary politics in an entirely corrosive yet illuminating way. The latest scandal – the fall of Housing Minister Phil Heatley – once again helps the public understand the nature of the political Establishment in this country. It shows that the ‘class’ of people that run our society are infected with a ‘culture of entitlement’. Each new scandal and revelation shows that, as Matt McCarten has put it, there is ‘an ethical sickness’ in our Parliament. This blog post elaborates on this ethical sickness, by showing how politicians like Heatley epitomize a ‘born to rule’ and hypocritical elite that now pervades Parliament. [Read more below].
Theft of taxpayer funds
Various commentators and politicians have expressed bemusement about what they see as the essentially trivialness and non-intentionality of Heatley’s resignation-inducing offence with his credit card. Yet it should be reiterated that Heatley scandal was over what was essentially his theft of taxpayer funds for his own private use. As a minister, Heatley charged Ministerial Services with expenses that he wasn’t entitled to, and then in the case of the National Party conference booze he tried to disingenuously conceal such expenditure in official documents as what he called ‘Minister and Spouse: dinner’. In this particular episode he obviously knew he was inappropriately paying for the wine, because he signed it off as something else, indicating a clear intention to deceive in order to ensure that Ministerial Services paid for what he thought should be his.
This was not trivial behaviour. Nor was it a ‘technical’ breach of the rule – as Heatley’s Whangarei electorate chair rather pathetically tried to sell it. Nor was it – as the National Party spinmeisters suggested – just ‘untidy’ or ‘carelessness’ on Heatley’s part. The same spinmeisters have also attempted to paint Heatley’s fall from grace as one man of principle’s overly conscientious stand. Bizarrely, the local Whangarei newspaper even labeled him ‘A victim of his own high standards’.
Heatley actually got off very lightly for his robbery of the public purse. As the Nelson Mail newspaper editorial said, ‘in the real world, admitting a $70 misappropriation would be firm grounds for instant dismissal’, and he’s lucky to still have his job on the backbench paying $143,000. Similarly, columnist John Minto compared Heatley with the plight of low paid workers that get sacked for ‘unauthorised consumption of company product’ when they have a lemonade or an unsold old pie on the job. It was Minto’s opinion that Heatley ‘would be on the street if the same rules applied to everyone’.
Establishment ignorance of the rules
The degree of Heatley’s ignorance of the rules is astounding – after all, he thought he could use his ministerial credit card for purchasing non-ministerial goods and services. This is what Heatly actually said: ‘I was under the understanding that as a Minister I could claim expenses for attending functions outside Wellington regardless of whether they were a housing or fisheries portfolio activity’.
In fact Heatley also said that he used his ministerial credit card on non-travel expenses while he was in the capital and his electorate i.e. in locations that don’t qualify for travel expenditure, and these cards exist to pay for travel rather than incidentals. Yet Heatley's belief that purchase can be made of non-ministerial-related goods and services is probably a fairly common assumption amongst ministers. They think because they are somewhere on a work-related trip, therefore all the costs are to be borne by Ministerial Services – regardless of whether they are in fact at a party conference, a private activity, a public speaking event, an election rally, etc. A culture of entitlement has obviously been created whereby there has been more of a feeling of ‘anything goes’, nobody cares, and no one is watching. Thus Heatley thought he could pass off a family holiday with the wife and kids as ministerial business to be paid for by the taxpayer (even if some was paid back). Perhaps in line with common thinking by those in Cabinet, the minister thought that taking the car on the Interislander and family meals all around the top of the South Island was apparently potentially chargeable to the taxpayer.
Heatley also used the credit card in a café when on his family holiday in Tonga. Although he could probably claim that he was doing ministerial work while at the café – he was using the internet there as well as having a coffee –nonetheless it indicates further a belief that he could use the card anywhere and anytime.
Heatley’s history of extravagant entitlement
It’s worth reiterating what we know about Heatley’s credit card trangressions and dodgy expenses dealings. After all, Heatley had a public track-record of pushing to ‘squeeze every last dollar out of his entitlement’. It was reported that, ‘Party sources indicated that Mr Heatley had pushed hard up against the limits of what was allowable when it came to claiming taxpayer-funded housing, travel and other allowances’.
The facts (according to Derek Cheng of the NZ Herald) are:
- Last year, Mr Heatley used a 75 per cent airfare discount available for MPs on a holiday with his wife in the Cook Islands [costing $1800]
- And when Mr Key introduced an MP housing allowance limit at $37,500 a year, Mr Heatley's Wellington residence was found to be $15,838 over budget.
- He rented a Wellington apartment for $946 a week, and also owned another he rented out to fellow National MP Louise Upton for $355 a week
Clearly Phil Heatley possessed, what a NZ Herald editorial called ‘a readiness to grasp at taxpayer money’. And the particular scandal that he lost his job over was not an isolated lapse nor a one-off – instead, Heatley was a serial offender.
The Establishment entitlement culture
The degree of ignorance purported from Heatley has led to commentators – both those that are sympathetic and hostile – to suggest a degree of stupidity was involved. But as Colin Espiner has written, it is easy to ‘conclude that both Heatley and Brownlee are stupid. And they're not’. Indeed – instead of stupidity, this bizarre failing was due to an overwhelming belief in their own entitlement to the perks of office. And this culture of entitlement is further confirmed by the fact that Heatley continued to misuse his credit card privilege after Ministerial Services officials informed him about his previous misuse. What’s more, when his ministerial accommodation allowance was put under scrutiny in 2009, ‘Heatley said that while he expected more scrutiny as a member of the Government, he was surprised by the furore over MPs' expenses and how his personal life came under the microscope’. Obviously he lacked any apparent shame or self-awarenes. As Gordon Campbell wrote, ‘When the affair first began to gather heat earlier this week, it is perhaps significant that Heatley sought to deflect criticism by telling the media how competent a Minister he thought himself to have been’. Campbell also notes, ‘Heatley didn’t know or respect the details because he felt himself above the rules, whatever they were’.
The culture of entitlement is encouraged, of course, by the numerous staff and hangers-on within the parliamentary cocoon – as Vernon Small says, ‘the officials fawn and the Crown cars purr in waiting’. It’s a very hierarchical environment in which the politicians make their own rules, and the officials who carry out the rules are also employed by those politicians.
Similarly, Labour MP Philip Field’s corruption sprung, according to Matt McCarten from the same ‘avaricious political culture of Parliamentary entitlement’ that has infected virtually all contemporary MPs and political parties. McCarten has insightfully and strongly argued that politicians are no longer servants of the public:
In my opinion there is an ethical sickness in our Parliament when even senior MPs no longer see themselves as the people's servants in public duty, but as political elites who are entitled to the maximum remuneration and perks they can give themselves.
And although we like to believe in New Zealand that our politics and public sector are entirely corruption-free, insiders like Michael Laws offer a different impression: ‘the public sector is a swamp of avarice. A swill of special interests who congregate to soak taxpayers for everything from conferences to koha. The kind of petty theft of which Heatley has been pinged is simply de rigueur’.
Even the Prime Minister has shown extreme softness towards the culture of entitlement. Last week he admonished journalists for highlighting politicians’ use of taxpayer-funded perks that fall within the law. He essentially said that even when the media didn’t like the rules about such perks they shouldn’t make a big deal of them because, ‘actually, that is a legitimate part of the contract MPs have. It might be outdated ... but nevertheless it's there’. Furthermore, he states, ‘I think, in defence of both MPs and ministers, that the media do need to think a little about what is legitimate spending within the rules even if they don't like the rules, vis a vis someone breaking the law’.
Again this raises the issue – discussed in the blog post about Labour’s latest taxpayer-funded electioneering – that it is false to simply assume in issues of political finance that legal=legitimate. It is possible that Heatley and other ministers’s use of parliamentary funding is totally legal while not actually being legitimate. Yet John Key essentially tries to peddle the myth that “what is legal is automatically therefore legitimate”. Although this might sound logical, in the academic area of political corruption there is a strong distinction between what is legal and what is legitimate. Often politicians can be undertaking corrupt activities that they pass laws to make legal, but this doesn’t mean those activities are legitimate. The best definition of ‘political corruption’, therefore, according to such scholars is that it is that which ‘the public deems inappropriate’ rather than what fits into the laws made by the politicians themselves.
The grasping extravagance of the Establishment
The grasping extravagance of New Zealand’s political class would not grate with the public so much if it wasn’t for the fact that MPs and ministers are so highly paid already. Backbench MPs already extremely well-paid on about $143,000 plus very generous expenses. Ministers get about a quarter million dollar a year salary. Thus one commentator made a good point about Heatley’s wine-theft, saying such grasping didn’t seem to come out of any desperate situation: ‘Heatley could have afforded to make personal purchases out of his own pocket’. A Dominion Post editorial made a similar point saying that with these huge salaries and expenses received by Gerry Brownlee, Phil Heatley etc, you’d think ‘if you want to treat electorate office staff to a lunch as a thank you, or shout some fellow party members wine, you should use your own cash, not the taxpayers'. Similarly, Barry Soper said on NewstalkZB, ‘It seems their quarter of a million dollar salary and their package of perks isn't enough to keep them in the style they've recently become accustomed to’.
The lack of personal generosity of these politicians is astounding, and these stories therefore make our politicians look shabby, selfish, self-agrandising, and disingenuous. Furthermore, this recent exposure of the grasping nature of government politicians comes at a time when they are preaching financial restraint, austerity and accountability for the rest of us. Yet as John Minto argues, ‘However it’s all just window dressing. Like most hardened capitalists they believe the rules of restraint and personal responsibility apply to others’. Thus it’s no wonder that considerable public sentiment is increasing against the hypocrisy of a government that is ‘getting tough with beneficiaries and cutting public services’ yet is happily spending our money on ‘alcohol for party mates or family holidays’. As Minto says,
It’s the same old story where the sense of entitlement increases in proportion to the salary. The more money our politicians and corporates are paid the more they expect the taxpayer to chip in extra towards their newly acquired lifestyles…..Those on high incomes have this tendency to just help themselves while those on the minimum wage are hammered for transgressions far less than Heatley.
Ministers like Heatley have appeared to be more interested in raising their own standards of living than their constituents. In one of his first scandals – over ministerial housing accommodation – here was the Minister of Housing, wrangling his own situation in order to give himself a massive housing subsidy. Meanwhile the standard of living of those in state housing declines.
Other politician extravagance
Phil Heatley was not the only one who has been extravagant with taxpayer funds. Obviously there is the well-publicised issues of Gerry Brownlee and Bill English – both being essentially guilty of misusing taxpayer money for private use.
Other examples of ministerial extravagance have also been exposed. For example, Tim Groser has also apparently been spending up large on expensive dinning – often with senior National Party members – ostensibly relating to his ministerial portfolios. For example, the Dominion Post’s ministerial expenses investigation uncovered Groser spending $223 for a dinner with ‘National activist Guy Salmon’ (and possibly another unnamed ‘key contact’) at The Wine Room in Wellington, $368 on meal in Washington with ‘recently appointed OECD official and former National MP Simon Upton’, and $247 on dinner at Wellington’s ‘Matterhorn with Dominion Post journalist Paul Easton and Conservation Department spokesman Bernie Napp’.
Other examples of large spending by MPs are becoming apparent. National MP John Carter, for example, has just spent almost $30,000 of taxpayer funds in a year on his travel perk, flying his wife between Wellington and Northland.
There’s been some other notable non-Ministerial MPs that have also epitomized the culture of entitlement. An obvious example was Act Party MP Roger Douglas spending $44,000 of taxpayer funds on a trip to London to see his son’s family.
All such behaviour should make us realise just how unrepresentative our Parliament really is. We might ponder whether democracy in New Zealand is really only for the rich. Last year, John Minto made the following insightful comment:
Based on our national profile we should have about 7 MPs from amongst the unemployed and half our parliamentarians from jobs earning less than the median income of around $39,000 per annum. I doubt there would be more than five percent of current MPs in that category and not a single MP would have entered parliament from a job paying less than $15 an hour despite 450,000 New Zealanders being in this category. Our parliament is dominated by professionals, intellectuals and business people many of whom sniffily comment they have had to take a pay cut to come to parliament. I’d hazard a guess that around 90% of MPs entered parliament from jobs in the top 30% of incomes. The result is a parliament of the well-off, by the well-off and for the well-off.
There is certainly a culture of entitlement and extravagance that seems to pervade out Parliament. Phil Heatley is not the only one who is infected by this ‘ethical sickness’, but he does seem to epitomize it. His departure from Cabinet is thus a welcome one, and if only it involved a resignation from Parliament too then there would be justice. What’s more, perhaps all the other MPs with a culture of entitlement might follow – in which case there might be few left. This is of course partly what is happening at the moment in the UK at the moment, where about a third of MPs are stepping down – many due to the same type of culture of entitlement that has now been exposed here.