Monday, October 16, 2006

Pay it Back NOW!

With Labour’s announcement that it will repay the $800,000 of public money it spent on last year’s election, it’s worth examining Labour’s claim to be poor.

The Labour Party is the most asset-rich of all registered political parties. It uses the income from over $6 million in property assets to fund election activity.

The New Zealand Labour Party is an unincorporated society. As such, it is not required to report its finances, and is not subject to the audit requirements of incorporated societies and limited liability companies. It is generally understood that in a non-election year, Labour’s annual budget of $1.5 million is funded primarily from income from property assets, subscriptions from affiliated unions, and a core membership of around 5,000 members.

The downside of being an unincorporated society is that the New Zealand Labour Party is not permitted to hold property. Instead, property is owned by a selection of private trusts and incorporated societies that receive beneficial tax status, and hold that property on behalf of the New Zealand Labour Party.

A selection of Labour’s property assets includes:
Dannevirke Labour $15,700
Greymouth Labour Branch $40,000
Labour Properties Inc $4,800,000***
NZ Labour Party Clubrooms Inc $140,000
Picton Branch $11,000
Thames Branch $83,000
Dunedin South $770,000

Labour’s wealth outstrips National’s asset base by a factor of 10-1. National’s only property asset—a floor of Willbank House in Willis Street—is valued at around $700,000. Labour’s claims to be poor simply don’t stack up. It begs the question why a party with such a large property portfolio needs ten months to repay misappropriated spending from last election.

Helen Clark is asking Labour’s core supporters to front up and take responsibility for this. The answer to Labour is simple: if Labour’s caucus, who are responsible for the over-spend, can’t front up with the cash immediately, then Labour should mortgage or sell some of its massive property portfolio.

***UPDATE: I used some conservative estimate of the value of the portfolio in Labour Properties Incorporated, pending valuation reports which I have now received for each of the eleven properties owned by Labour Properties Incorporated.

As of this afternoon, I now have a full break-down of rating valuations for all the properties in Labour Properties, with the exception of one. The numbers are:
Fraser Body House $4,000,000
7 Fulton Crescent $330,000
1/332 Massey Road $416,000
300 Great North Road $470,000
Palmerston North $203,000
Domain Avenue $105,000
4 Regent Road Dunedin $440,000
203 Warrant Street North$223,000
651 Ferry Road ChCh $130,000
1 Pharazyn Street $240,000
Total $6,557,000

A *very* conservative estimate of the Takapuna property--prime commercial real estate on the North Shore--is $2 million. All up, Labour's assets are much closer to $10 million.

13 comments:

kyotolaw said...

As always, interesting stuff.

Source for names of trusts and valuations of the property?

Insolent Prick said...

Trusts and valuations come from the respective incorporated societies' own financial statements, which are required to be submitted to the Registrar of Incorporated Societies. Documents are online and searchable at www.companies.govt.nz

The Dunedin South Labour Electorate receives $52,000 in rent on its property, which is used as David Benson-Pope's electorate office. The property is rented by Parliamentary Services, and paid for by the taxpayer. In return, the Dunedin South Labour Party makes huge contributions to the general Labour Party: at the last election, it made a "loan" to the Labour Party of $132,000.

There's a fairly legitimate issue as to the legality of this transaction. The New Zealand Labour Party Head Office is not an incorporated society, and isn't permitted to borrow money.

Anonymous said...

OMG
"Secret Trusts" and all.

Jim D said...

Heck yeah, secret trusts alright!

Peter McK said...

Hummm - very interesting - about the Dunedin South Office - I wonder if a rort is going on here -Is anyone familar with this office - and are Parliamentary Services paying a fair and reasonable rent for this office. Who sets the rent - and has this been done independantly? Is the amount of space used fair and reasonable for an electorate office?

maybe a local National MP could undertake some research into this.

Spirit Of 76 said...

If Labour are involved, there will be a rort going on, without doubt

Anonymous said...

Ummm, what about Napier Labour? I thought they are the richest in the country? And they don't hold an electorate within kooeee!!

Anonymous said...

Here's a bold prediction. Expect Labour to announce that they will be boosting the rents of urban electorate agencies since "urban rental growth means that MPs are finding harder to pay for office rent".

Hey presto, Labour can now borrow against their assets more given a better income stream.

Insolent Prick said...

Dunedin South is an interesting case; it partly explains David Benson-Pope's power-base in the party. Dunedin South is by far the wealthiest electorate organisation, and bank-rolls large streams of Labour's campaign.

I doubt that Parliamentary Services is paying substantially more than market valuations for rentals; but Labour certainly does channel rental income directly to Labour's campaign.

That's really just another example of Labour already using de facto public funding of political parties on the sly.

Anonymous said...

"That's really just another example of Labour already using de facto public funding of political parties on the sly."

That says it all really.

Anonymous said...

http://www.ucc.ie/law/restitution/archive/newzcases/hugh_watt.htm

You forgot the Hugh Watt Society

Anonymous said...

I do not see the relevance of all this. We already know that the money is being levied off MPs for the better part.

How is National getting on with GST on their expenses, which will take their CAMPAIGN expenses into the illegal category?

Insolent Prick said...

Anonymous,

The Labour Party has claimed that it is too poor to pay the money back immediately; that is patently untrue. Labour is putting off repayment of illegally appropriated funding by ten months.

Labour's overspend amounted to outspending everybody else, and breaching the electoral cap, by over $800k.

I personally think National should correct the GST error and face the consequences.