Joe Hockey takes his entitlement

By Leith van Onselen

It seems Treasurer Joe Hockey’s goal of “ending the age of entitlement” doesn’t extend to his own family, with the Daily Telegraph reporting yesterday that taxpayers are paying him $1,000 a month to stay at his wife’s $2 million home in Canberra:

TREASURER Joe Hockey charges taxpayers $1000 a month, the equivalent of the Newstart unemployment benefit, to sleep in his wife’s $2 million Canberra home.

Mr Hockey has claimed travel allowance totalling $184,000 to stay at the home during parliamentary sittings since 1998, more than half the original sale price of $320,000.

The figure has averaged $1000 a month since 1998, roughly equivalent to the $519 a fortnight the government expects unemployed people on Newstart payments to live on.

Mr Hockey’s wife Melissa Babbage’s astute purchase of the blue-ribbon real estate investment in 1997 has seen the property’s value grow to around seven times the original purchase price…

Under travel allowance rules, Mr Hockey is allowed to claim $271-a-night when he stays in Canberra…

To be fair to Hockey, many other MPs employ similar tactics, according to the Daily Telegraph, including Labor’s Anthony Albanese, Warren Snowden, Tanya Plibersek, Joel Fitzgibbon, Jim Chalmers, Mark Butler, Tony Burke and Doug Cameron.

Nevertheless, Joe Hockey’s claim that “everyone has to live within their means, whether it’s a company, whether it’s a family, whether it’s an individual, whether it’s a government” would hold more weight if politicians also agreed to take a haircut, rather than expecting ordinary Australians to bear the burden of Budget cuts.

Hockey’s goal of “ending the age of entitlement” would also hold more weight if the Government agreed to examine reform of superannuation concessions, negative gearing, and capital gains tax concessions: lurks that overwhelmingly benefit higher income earners, whilst punching huge holes in the Budget bottom line.

I guess this is what you get when you and your wife own multiple investment properties, and have a vested interest in maintaining the status quo.

[email protected]

Unconventional Economist
Latest posts by Unconventional Economist (see all)

Comments

  1. Stewie Griffin

    Paul Keating Ex-PM ‏@PmPaulKeating 21 hrs21 hours ago
    #auspol it’s not that #HockeyRort is a scam, it’s morally hypocritical to make these LAFHA claims and call for others to exercise restraint

    • His paid $1k a month to live in his wife’s house, yet I wonder how much of that she claims as rental income?

      • I can’t stop musing about the taxation issues. The general rule is that taxation on allowances are reduced by the deductibility rules. Irrespective of the quantum of the allowance, the amount of deductibility can be no more than the actual cost incurred. Which raise the question, what costs were actually incurred? In Joe’s case you could argue there were none, unless his spouse charges rent in which case there would need to be documentation in place and the tax liability would transfer to his spouse. The fact that it may cost $1000 for an equivalent hotel room is not the question – the deductibility rule applies to the real cost to the taxpayer. I wager my remaining testicle the ATO would be having a look at these allowances.

      • Well, let me skip through a couple of tax thoughts. Just casually – I haven’t really drilled into this so fair warning that there may well be more to the tax story and some of it may be poorly thought through bollocks on my part. In any event it’s really not necessary to get too caught up in the detail. It’s likely to be legal – we’d be kidding ourselves if we though the pollies hadn’t organised it to be legal for themselves – JH is doing it because everybody involved with any influence is OK with it happening and from his perspective it’s apparently free money. Whether it ethical, whether it’s really just a rort, etc, is an entirely different matter. He’s unlikely to be called for it and even less likely to be held to account for it. Don’t confuse the rule of law (for the proles) with the law of rule (for the 1%).

        But let’s proceed to take a bit of a look at this bag of travel allowance cash that JH is taking home each year. And about his claims to be paying “rent” to his wife for staying at one of the family homes. LOL.

        That cash received by Hockey seems to have been described in the press as a “Travel Allowance”. Let’s suppose it is an actual Travel Allowance of the prole kind, i.e. something like the thing described here:

        https://www.ato.gov.au/Business/PAYG-withholding/In-detail/Allowances,-leave-payments-and-repayments/Travel-allowances-and-PAYG-withholding/

        Note that an employer either includes the allowance on the employee group certificate:

        “If the allowance is paid above the reasonable travel allowance rate (in total), there is a requirement to withhold [jdn: paygw] from the amount over the reasonable allowances amount. The total amount of the allowance should be included on an employee’s payment summary in the allowance box with an explanation.”

        In which case the employee declares the income in his personal income tax return and then claims the offsetting deduction to the extent that one is available (perhaps paying, cough, “rent” to his wife, cough). Alternatively the employer doesn’t include the allowance on the group certificate:

        “If the allowance is paid at the same rate or below the ‘reasonable travel allowance’ rate, and the allowance is separately accounted for, no withholding is necessary. In addition, the travel allowance does not need to appear on an employee’s payment summary.”

        But you don’t get to collect the money and avoid paying any marginal-rate tax on it unless you’ve genuinely spent it for the purpose it was given by the employer, otherwise you must bring it onto your personal tax return as assessable income and pay tax at your marginal rate:

        “If the allowance is not fully expended.

        Where the allowance is paid to cover accommodation, meals and incidental expenses and you are aware that the allowance will not be spent on one or any of the items it is intended to cover, the allowance is not considered to be a ‘bona fide travel allowance’. In these cases there is a requirement to withhold and record the amount on an employee’s payment summary as part of gross earnings.

        Where the deductible expense is less than the allowance received, the employee must show the allowance as assessable income in their tax return, and claim only the amount of the deductible expense incurred.”

        OK, so if JH is staying with his wife in one of her/their own properties, do you think that the allowance ought to brought onto his tax return and shown as assessable income?. Let’s not rush to judgement – maybe pollies are special somehow or maybe there’s more to the story. Can’t imagine that they’d write legislation that exempts or favours themselves relative to the rest of us, eh – you know – pensions, guaranteed super above the minimums, travel benefits, …

        OK, so what’s the “reasonable travel allowance rate”? ATO TD 2014/19 (“Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2014-15 income year”) tells us at para 11, that for Canberra (Table 3: Employee’s annual salary – $200,291 and above) the daily reasonable travel allowance (again, for the proles) is:
        Place: Canberra
        Accommodation: $246
        Food and drink: $143.25 [B’fast 32.55, Lunch 46.10, Dinner 64.60]
        Incidentals: $26.75
        Total: $416

        But, wait, the pollies are different. How so? ATO TR 2004/6: “Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses” ( http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20046/nat/ato/00001 ) tells us at 66 and 67 (“Office holders covered by the Remuneration Tribunal”) and 70 and 71 (“Travel allowances for Federal MPs”) that:

        “67. The Tribunal inquires into the allowances to be paid to Ministers, other Members of Parliament, officers of the Parliament, holders of office of Justice, judges of a Federal Court and certain public office holders
        70. The Canberra travel allowance recognises that most Federal Members make ‘more settled accommodation arrangements in Canberra’. This travel allowance is paid at a rate below that for full commercial accommodation, meals and incidentals. The Capital City travel allowance for commercial accommodation reflects the costs associated with taking up accommodation in commercial establishments such as hotels, motels and serviced apartments in capital cities other than Canberra.
        71. The Capital City travel allowance for non-commercial accommodation is paid if accommodation is not taken up in a commercial establishment. The rate for this travel allowance is one-third of the commercial rate to cover the cost of meals and incidental travel expenses. Having regard to the circumstances under which Canberra and Capital City travel allowances are paid to Federal Members, the Commissioner accepts as reasonable, claims for expenses incurred up to the amount of allowance received.”

        OK then, so what’s the “Canberra travel allowance” that relates to “more settled accommodation arrangements in Canberra”. Well, that seems to be “Determination 2014/16: Members of Parliament – Travelling Allowance” ( http://www.remtribunal.gov.au/media/documents/2015/2014-determinations/2014-16-determination-members-of-parliament-travelling-allowance/2014-16-MPs-Travel-Determination-7.8.2014.pdf ) at [for JH as Treasurer] Column 2 of Schedule A “Travel Allowance Rates”:
        Locality: Canberra
        [for] Office Holders: $271

        But wait, I hear you cry – he’s not actually incurring the expense – he staying in one of his family homes. How is that legal?

        Well the question of intra-family payments crops up in tax in a variety of places (“can I pay my wife’s cleaning company to clean my rental properties?”, or “can I claim an out of pocket medical expense on the Net Medical Expenses Tax Offset if the medical expense was for my husband and he paid for it with his own credit card?”, etc)

        e.g. Can JH actually “rent” a house that his wife owns (or is it just a room in the house? What if she sleeps there too – “serviced” accommodation perhaps – do you think the ATO should require apportionment of the expense? 🙂 )

        Hmm, well I don’t really know, but the principle of mutuality of marriage (is that more appropriately called “spouseship” now?) has me thinking that If I tried that on in my personal tax return (i.e.claiming a tax deduction for a “notional” accommodation expense [not really]paid to my spouse) that at the very least I might run into the General Anti-avoidance provisions of ITAA36. i.e. Part IVA [“Schemes to reduce income tax”]. e.g. s177C(1)(b):

        “a deduction being allowable to the taxpayer in relation to a year of income where the whole or a part of that deduction would not have been allowable, or might reasonably be expected not to have been allowable, to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out” ( http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s177c.html )

        But wait, are the pollies different? Take a 2nd look at Determination 2014/16, in “Part 3 – Conditions of Payment” at para 3.5:

        “3.5 Not staying in commercial accommodation: Where a member is accommodated in private, non-commercial accommodation such as the home of a family member or friend, a rate of one third of the rate in Schedule A is payable, rounded upwards to the nearest dollar.”

        OK. Let’s see:
        – “accommodated in private, non-commercial accommodation” – the wife’s residence – a private home apparently. Tick.
        – “the home of a family member or friend” That would include JH’s wife. Tick.

        That leads me to believe that JH is entitled to 1/3 of the $271 per para 3.5, rather than the full $271 daily rate.

        Of interest also is para 3.6 (“Staying in commercial accommodation”) that requires inter alia “a receipt for the commercial accommodation must be produced or certification must be made that a receipt for the commercial accommodation can be produced, and will be produced upon request”.

        I wonder whether the wife has stuck her neck out and attested to the ATO that she’s conducting a business of the provision of commercial accommodation from her home and, you know, how the local council feels about that too.

        So the Daily Telegraph article referenced by Leith has JH saying that he pays “rent” to stay at his “wife’s home”. There are a few items in the reporting of that story that I find surprising such as the assertion that “…is allowed to claim $271-a-night when he stays in Canberra to cover the cost of accommodation regardless of whether he stays in a hotel, his own property or a friend’s home”, That doesn’t sound consistent with para 3.5. Also it’s not entirely clear from the context of the quotes whether JH’s references to “paying rent” are literal (meaning he then turns around and claims the higher $271/night travel allowance), but I just don’t immediately see the wiggle in paras 3.5/3.6 to allow it. i.e. paras 3.5 and 3.6 would require the family home to be “commercial accommodation” in order to obtain the higher $271 rate, and there’s nothing in the story that indicates that is the case to me.

        So it’s not clear to me why the Daily Telegraph believes that “His use of the travel entitlement is allowed under the current rules and does not represent any improper use of his entitlements.” if in fact he’s claiming $271/night on the basis that “… I pay rent’’ (to his wife) is contextually correct.

        I’ll circle back and close up by reiterating a key point via TR 2004/6 (substantiation exception for reasonable travel allowance expenses) at para 11:

        “11. An expense must be actually incurred before a claim can be made. A taxpayer cannot automatically claim a deduction just because they receive an allowance….”

        So, in any event, I suspect there might be some interesting questions for JH to address on several dimensions (and perhaps also his wife) if anybody over in ATO-land had the cojones to inquire without regard for the career fallout for doing so.

        Again – don’t confuse the rule of law with the law of rule.

      • Oh, and don’t forget – if his wife is receiving “rent” from JH then she probably needs to declare it as income. Wonder if she has been?

        As the property has been turned to an income-producing purpose then she will probably have lost a portion of her s118 ITAA97 capital gains tax exemption for her (bubbleicious $320k becomes $2m in about 17(?) years) home. i.e. when she sells she’ll need to declare a lump of the gain as assessable income on her tax return for that year.

        “You can ignore a capital gain or capital loss you make from a CGT event that happens to a dwelling that is your main residence. However, this exemption may not apply in full if:…or it was used for the purpose of producing assessable income.”

        http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.100.html

        Lots of interesting questions just there with JH and family. Imagine what we’d find if the ATO finished up their “crack-down” on the cash economy and stopped trying to squeeze extra cash from hair dressers and handymen running their $70k-gross-a-year before supplies and overheads businesses and spent some time turning over the rocks under which the pollies are hiding their affairs. Makes one wonder…

  2. Forrest GumpMEMBER

    Does the $1,000 per month include his wife? Or is there another allowance for that?

  3. They get into power by saying they’ll help other people but just end up helping themselves…

    • The government is a political organization of the economic powerful class. When there was a great middle class, the government represented its interest and that ment democracy, because the middle class was powerful economically. Now the middle class is fading and with it democracy is fading too, but the government again represents a political organization of the most powerful class rulling the economy – FIRE.
      So, by definition the government represent the most powerful economic interes, always, for ever and now. Just because for half a century there was a powerful middle class imposing democracy, doesn’t mean that it would be forever, alas. So wake up and defend your rights before it is too late.

  4. To our leaning tower of pollies this is OK, it’s not” Entitlement”. It’s “da Rules”.
    They really do live on another planet. Planet Canberra where “Da Rules” only apply to them.This is what happens when you get a “Better Job”

  5. In fairness to Joe, he’s not breaking the rules. The rules don’t allow for wealth. The rules allow you to defray the cost of living away from home. Poorer parliamentarians are probably in share houses. The rules just don’t take account of you being wealthy enough to buy your own place to stay and pay the allowance to yourself. The same sort of thing applies to public servants who work away from home for long periods, though obviously that’s a much rarer situation.

    • Mothers who have paid maternity leave as part of the workplace entitlements aren’t doing anything illegal when they receive government PPL payments, until it’s no longer legal when someone in Canberra strikes a pen through it. That’s how laws work.

      The moral issue is it is a much more reprehensible form of ‘double dipping’ especially when the loophole is being in his wife’s names, when the family court would recognise Joe having a claim to it.

      • Yes, I think Keating’s right, it’s morally indefensible, but not an infringement of the rules as they stand.

      • Very much like big Corporations who cook up clever accounting techniques to avoid paying tax. Illegal? No. Immoral yes. But since when did Big Joe seem like the kind of guy with moral’s?

  6. Wasn’t Joe complaining about mothers “double dipping” on parental leave a few weeks ago?

    Yes it’s not illegal, but if you’re living in a glass house it’s probably best not to throw stones.

    • According to a public servant mate, they would be charged with fraud for doing something like this yet politicians are legally allowed to.

      • I know of whole departments that had their allowance system completely overhauled because of actions like Hockey and Co.

    • DT, yep, nothing illegal about it, but it is rank hypocrisy to talk about lifters and leaners, and call mothers perfectly legally claiming a parental leave scheme designed to be topped up by employers “double dippers”. It’s quite astounding really…

  7. Bottom line, as ‘Treasurer’, he should be squeaky clean as politics 101, regardless of the legality.
    He deserves to go.

    • Agreed. It reminds me of the similar scandals in the UK over Tories doing the same sort of shady double dipping. Is this stuff worse with the righties?

  8. SoMPLSBoyMEMBER

    Yeah, it may be ‘legit’ on the books, but it’s ‘stacking the deck’ just the same and people notice. If you bring ‘that’ game to Broadmeadows, you’d better know when to walk away and when to run.

  9. I made a similar point elsewhere recently – Hockey has displayed poor political nous continuing to collect his Newstart equivalent whilst campaigning End of the Age of Entitlement. Saw politicians allowances defended on the grounds they are almost half the rate enjoyed by Judges et al. The gravy train is alive and well.

    • “I made a similar point elsewhere recently – Hockey has displayed poor political nous continuing to collect his Newstart equivalent whilst campaigning End of the Age of Entitlement.”

      Exactly, 3d1k. He might be a nice guy, he might even be an intelligent guy, but his political judgement is bloody awful. If you’re going to use loaded language like “lifters and leaners”, and if you want to claw back people’s entitlements, then you need to actually set an example- if you want to be taken seriously! I just hope his economic judgement is better than his political judgement, especially if we face an economic crisis.

  10. “da Rules” is bullshido. If you overnight somewhere and you get your own accommodation how much does your employer pay you? Mine will pay $85, yet if I stay in a hotel it’ll cost them anywhere from $200 up.

    If you pay peanuts you get monkeys, I’ll take the monkeys!

  11. Terror Australis

    WHILST I RELISH the opportunity to insert my size 9 1/2 shoe into Joe’s stupid fat posterior, I think this whole issue is actually a bit of a cheap shot.

    Most politicians live in their electorates, not Canberra. Therefore, like most jobs, I think it’s reasonable to expect that they are entitled to a “living away from home” allowance. There doesn’t seem to be any dispute about that point.

    Most people seem upset about the fact that the money was paid to his wife.
    Admittedly, it’s not a good look.
    BUT if Hockey had stayed in a B&B across the road or in a Canberra hotel, the taxpayers would be no better off. I accept what he says, that there are practical advantages to staying in a place where you can hang your shirt somewhere and know it will still be there next time you come.

    This is “Daily Telegraph” level commentary.
    I expect MacroBusiness to maintain a higher standard.

      • Terror Australis

        He is entitled to spend the money on some form of accommodation.
        That’s the key point.
        Whether the recipient is a family member or not, in reality, doesn’t make any difference from the taxpayer bottom line stance.

      • I think I remember him talking on ‘Kitchen Cabinet’ about how there were several politicians who stayed there. I assume each one paying their $270 a night. I’ll have to go back and check.

      • Terror Australis

        Allowances are not the same as “receipts”.
        In most organizations if you get a “living-away-from-home” allowance, it is a fixed sum per night.
        AND whether you stay in the Hilton or in a Backpacker Dive and pocket the difference is entirely up to you. Pollies allowances no doubt work on the same principle.

      • Terror Australis

        That’s how “allowances” work.
        You either spend ALL of it or PART of it and keep the difference in your pocket.
        Makes no difference to your employer either way.
        And it makes no difference to the taxpayer whether he pays his wife or the B&B operator across street.

      • drsmithyMEMBER

        Whether the recipient is a family member or not, in reality, doesn’t make any difference from the taxpayer bottom line stance.

        The difference is it effectively represents a salary bump, since the money goes straight into his pocket and stays there, rather than a covering of expenses, where the money is going into his pocket to replace some that he paid to a third party.

        It might just be barely acceptable if it was his ex-wife, rather than his current wife (but still look very dodgy even then).

        It staggers me that there are people defending this (well, except the minebot – but he’d wave off Julie Biship bathing in babies blood to stay young as merely “politically naive”).

      • Sorry, just bullshit. Tell me an employer who will allow you to take an allowance equivalent to the room rate.

        it’s just another rort to boost their pay.

      • Terror Australis

        “Tell me an employer who will allow you to take an allowance equivalent to the room rate.”

        Happens all the time in the airline industry for one.
        Pilots get paid an allowance to stay in a hotel when the overnight some place.
        But it’s up to them whether they book into a hotel or stay with a friend.
        Same bottom line to the company so why would they care?

    • Ronin8317MEMBER

      You completely missed the part about ‘being owned by his wife’? They are exploiting a loophole, and is doing nothing to close it. Is Hockey not being paid well enough already?

      • Terror Australis

        “Most people seem upset about the fact that the money was paid to his wife.”
        Read my comment again.

    • IMO it’s about the political wisdom or lack thereof. Yes, allowances are due and payable, but be rigourously above any perception of nepotism or personal gain. Stay in a hotel, a flat, but make sure there is no familial connection.

      • + 1
        As the proud owner of ng properties, as a person who said the poor don’t drive, and as a person who is in the business of being popular with the electorate- why would you give him a job, well paying or otherwise.

    • I agree terror. It’s cheap, petty and is yet another distraction. It should be priority number 1000.

      Haven’t seen anyone mention the house isn’t available to rent to someone else while fat boy’s in it.

      Fix Australia and then put them all in jail and confiscate their wealth. Far better.

    • unfortunately Terror this would be a good defense for someone who is not lecturing the public on entitlements

      • Terror Australis

        Yes. As I said, from a media headline point of view it doesn’t look good.
        But I still can’t see why this is ethically or legally wrong.
        If you receive a “living-away-from-home” allowance, in any organization you are generally entitled to spend it however you like.

      • Terror Australis

        “Staying at your wife’s place isn’t exactly living away from home”
        His family home is in Sydney so when he goes to Canberra, technically he is.

      • He has multiple homes. He has one in Canberra as well as Sydney. He should not be claiming anything. He’s a “leaner”, a fucking heavy one too!

      • drsmithyMEMBER

        But I still can’t see why this is ethically or legally wrong.

        The purpose of a living away from home allowance is to cover costs you abnormally incur because you are living away from home. For example: hotels, dining out (since you generally don’t have the ability to prepare your own food in a hotel) and car rental.

        Sticking the money in your pocket and then staying in your own place, eating as you normally would and driving your own car around – ie: incurring no abnormal expenses – is a clear violation of the spirit of an away-from-home-allowance, if perhaps not the legal definition of same.

        The main reason people are angry is because they know if they tried this on in their jobs they’d end up fired, if not the subject of legal action to recover payments provided.

      • It’s no bloody defense. Haven’t had an employer yet that would do that, would be lucky to get half the room rate as an allowance for getting my own accommodation.

      • Exactly.
        Arms length is required and a fair allowance for the pollie to spend discretionarily. I don’t think it necessary them to stay in a $2m place but if they can get something like this within a fair allowance go for it.

        I hate that the Hockey family investment property vacancy potential is minimised with this clear conflict of interest & pocket self lining.

        He’s so fkn delusional he doesn’t even see the irony and double standards. Goodbye Joe, and take Tony and Robb with ya.

    • drsmithyMEMBER

      BUT if Hockey had stayed in a B&B across the road or in a Canberra hotel, the taxpayers would be no better off.

      And neither would he. Which is the point.

      The fact that politicians spend so much time in Canberra on a known schedule, yet there is no publicly-funded living quarters is in itself a mind-boggling rort.

      • “The fact that politicians spend so much time in Canberra on a known schedule, yet there is no publicly-funded living quarters is in itself a mind-boggling rort.”

        The solution is to move all govt. procedures, govt. house etc, everything to do with the day to day running of the country to Sydney. Hell Sydney should be renamed the capital.

    • When you talk of lifters and leaners and when you talk of people “double dipping” on maternity leave when they are legally entitled to it then you have set yourself up for a beating.
      Although it is legal for Joe to claim the living away from home allowance, it still smells like double dipping to me.

    • ErmingtonPlumbingMEMBER

      Joe’s not scum, he more self centered.

      He’s like the fat greedy uncle who eats all the crackling before anyone else gets a piece at christmas lunch. Like a lot of spoiled wogs, he doesn’t really know how to empathise with anyone, its the source of his lack of political nouse.

  12. moderate mouse

    There’s something deeply grubby about a person in Joe Hockey’s position who scrimps and scams to wring every last cent out of his job. Rather than ask themselves “How would this play in the media?”, the Hockeys have simply gone with their instincts: “There’s another win for us.” Apart from being a fat f*ck (seriously, if you can’t manage your own weight, how can manage the economy?), Joe Hockey is small man with small ambitions. Get out of the way, Fat Ass.

  13. pyjamasbeforechristMEMBER

    I don’t have an issue with this.

    Politically though she should have rented it out to someone else (probably would get more than $250p/w for it too) and Bozo rent another place from an unrelated landlord.

    How many parent rent a place to their kids while studying at uni on “rent assistance”?

    • Clearly you’re not an ACT landlord. I’m sure it’s not rented out at all. We have land tax in the ACT, only for rented properties, and it’s massive, so I’m perfectly sure it would never pay her to rent that place out.

    • drsmithyMEMBER

      How many parent rent a place to their kids while studying at uni on “rent assistance”?

      Probably not that many, but it would be an equally unethical act.

  14. ceteris paribus

    It’s not the allowance that is the problem. It is his mean-spirited lack of empathy for the plight of others that diminishes him.

    • Yes, totally agree. But, actually, it’s an allowance so it’s tax-free for Joe, but it could generate several tax liabilities for his wife when he pays it to her. Perhaps someone should look into whether she’s declared the money as taxable income (which it is), and whether it makes the house liable for ACT land tax (which, as I say, would be massive for that place)? Perhaps some public-spirited, outraged person would like to look into the answers to those questions.

      • Allowances paid in relation to earning income are taxable. Deductions representing the actual costs can be claimed against the allowance. No doubt he pays exactly his allowance to his wife as a rent. It’s a scam. Probably legal but immoral considering his wife ( a related party) benefits from the arrangement.
        The income from rental would be declared and no doubt other properties are negatively geared to defray the income. Land tax is applicable.
        What I don’t know is if the property portfolio is part owned by Joe. If so, the living away from home allowance is being incorrectly claimed IMO.

  15. The reason it seems wrong is because it is wrong. The point of the LAFHA is to compensate politicians for an expense of the job. What’s happening here is money is going straight into Joe’s pocket. Joe, the person who is supposed to be looking after the nation’s books. The fact that we’re even having an argument about the merits of this issue shows how far this country has sunk.

      • I’m starting to wonder, is this Australia’s worst government by far, or what?

    • Terror Australis

      Wrong.
      “Receipts for expenditure” is different concept to “Allowance”.

      I get an allowance from my company to travel.
      Whether I use all of it to go Business class or I choose to go Economy and pocket the difference is immaterial to the company and nobody’s business but my own.

      • Ronin8317MEMBER

        You’re justifying the action because ‘everyone else is doing it’? In my companies, claiming the price of a ticket for business class, then fly using economy and claiming the difference will get you fired.
        It cost Joe Hockey NOTHING to stay in his wife’s house. He is not out of pocket, which is why it is wrong.

      • When I was in the APS this was lauded as being financially astute. You could call it Armenian guile 101.

        Travel allowance + accommodation allowance – cost of Fyshwick caravan park accommodation – cost of 2 minute noodles (unless Qantas didn’t give you any crackers) = WIN!!!

        Frequent flyers would be rubbing their hands in glee. Tax free taxpayer funded perks in the bank and then their salary.

        Cheerin!

      • Terror Australis

        Again, there is nothing morally or legally wrong with that.
        If you want to change the system from an “Allowance” to “Show me the receipts” then everyone would just stay at the most expensive hotel and eat at the most expensive restaurant their boss is willing to approve. Either way your employer is out of pocket by the same amount.

      • So double dipping is morally wrong as him and the PM pointed out when it comes to struggling moms and dads(paid parental leave …) but its ok if you are a PM on high wage, to double dip somewhere else.
        I said it before and i say it again, most Aussies have lost their moral compass and this is one of the main reasons why this country is screwed.

      • He gets allowances that he pays to his wife in other words to himself. Not saying its illegal , i’m saying he is a bloody hypocrite to call others leaners and double dippers when he does the same.

      • drsmithyMEMBER

        If you want to change the system from an “Allowance” to “Show me the receipts” then everyone would just stay at the most expensive hotel and eat at the most expensive restaurant their boss is willing to approve.

        In most private industry “show me the receipts” is exactly what it is. In fact, in quite a lot of private industry you don’t even get the chance to do that since a corporate travel agent books your hotels and flights (as the kind of dodgy dealings you are advocating have long since been identified). Then you get a set maximum per day to spend on food (for which you must provide receipts and claim back, covering any overspend yourself).

        Either way your employer is out of pocket by the same amount.

        The point is not how much is going out of the employer’s pocket. The point is how much is going *IN* to your pocket based on a lie (costs incurred from being away from home).

      • Geez Terror, who do you work for? A very obliging one by the sounds of it who also seems to have no idea of cost control when it comes to travel costs.

        For starters the ATO publishes what allowances are permitted tax free for Australia as a general cost for B, L & D and laundry (overnight allowance) If you get paid more than that you must provide receipts for expenditure and any shortage is considered taxable income. If you are only paid the stated allowance you only have to declared it as spent, with no receipts. Overseas it has a list of cities and what allowances are permitted for each, same tax wise.

        Now, my present employer and past employers have a travel dept (or subcontract it out) who book your accomm, flts and transport. If I wanted to find my own digs what I get is well under half of the going rate.

      • Terror Australis

        “The point is not how much is going out of the employer’s pocket.
        The point is how much is going *IN* to your pocket based on a lie (costs incurred from being away from home).”

        Thanks Dr Smithy. You’ve nailed the crux of the issue.

        LOGICALLY, it makes no difference to the taxpayer where Hockey sleeps at night.
        There is a bit of TALL POPPY envy going on because Joe is perceived to be getting some kind of private benefit. The part about it being based on a “lie” is completely false because, as I’ve said many times, an ALLOWANCE works differently to RECEIPTS. If you get paid an allowance it’s effectively your money to spend in whatever way you deem appropriate. There is nothing legally or morally wrong with what he has done.

        And yet I’d still like to boot the stupid fat fool in the arse.

      • drsmithyMEMBER

        The part about it being based on a “lie” is completely false because, as I’ve said many times, an ALLOWANCE works differently to RECEIPTS. If you get paid an allowance it’s effectively your money to spend in whatever way you deem appropriate. There is nothing legally or morally wrong with what he has done.

        Yes there is, because the premise of the allowance is that one is incurring abnormal costs from being away from home. When one is no longer away from home in the sense of incurring abnormal costs, it is no longer moral to take money being given to you based on that premise.

        “Tall poppy” has nothing to do with it. He’s rorting the system and being treated with the contempt he deserves for doing so.

      • If you pocket the difference Terror Australia, then you should pay tax on the difference. Allowances paid in earning income are included in taxable income. TR 92/15 ATO Guidelines.

    • drsmithyMEMBER

      The fact that we’re even having an argument about the merits of this issue shows how far this country has sunk.

      +1

      A culture is defined by the worst behaviour its leaders consider acceptable.

  16. I don’t think the allowance was ever intended for someone in Joe’s superior financial circumstances. Nevertheless he is “entitled” to it, but whether someone who is so far above the normal wealth levels would see fit to claim it, is the moral issue. I would implore everyone to maximise their tax entitlements this year as it so obvious the pollies are doing that. Quick buy an IP before June30 and get a free bali holiday.

  17. He seems to be taking to heart the old adage, “politicians should be obscene and not heard”.

  18. Perhaps a solution here would be for the government to purchase or purpose build ‘politician (or public servant) accommodation’. Those staying in the ACT have the option of using this for free or paying their own way out of pocket. As it stands there’s nothing particularly unfair about Hockey claiming the allowance as all others do.

    • Yes purpose built accommodation seems like a good idea. Each room should be 3mx3m bare concrete, open window to the outside, with bars, a sliding front door made up of vertical bars. No electrical outlets, no heating or cooling, no tv or radio.

      Sounds good to me.

    • Now you are finally getting it BB. If taxpayers had simply purchased properties at the start it would work out far cheaper than being charged $270 a night for the rest of eternity by bludgers like Joe. Comparing to regular travel allowances is stupid as company employees often travel to many locations, but as far as I can tell the parliament buildings are in no danger of being moved anytime soon.

      • I wouldn’t be against alternative accommodation arrangements, especially in ACT where a lot of public servants would regularly travel. I just think it’s silly to single out a single person as was the case in this article. If the rules suck then change them, don’t berate those who are working within them.

    • I had similar thoughts BB.

      I’m sure there’s a few dongas free now that the mining boom is collapsing. Getting them shipped to Canberra should be trivial – I hear McAllese is scratching for work at the moment..

  19. KlimashkinaSydney

    Them that’s got, shall get, them that’s not shall lose.

    It’s in the Bible – and also Billie Holiday’s back catalogue.

  20. Aside from the ‘double dipping’ hypocrisy, aside from the ‘optics’ of it all, surely one of the highest ranking public servants in the country should genuinely not want to claim this entitlement, no matter how many others are doing it or whether it is a god given right or not as he and his wife would still be doing better than most of the population without it. Surely these taxpayer’s funds would be better diverted to an area of social services that are poorly lacking, perhaps housing our homeless/most vulnerable (too much irony…?). Those ‘optics’ would surely be kinder but he shouldn’t even care about how it looks and just do it for ‘Team Australia’…
    Why is it that the ones that can least (or less) afford it, are always the ones setting the best examples?

      • Thanks R2M, just the response I was hoping for! My pinko lefty work here is done and I’m off for a chardonnay…hehe

    • moderate mouse

      Yeah I hate that term – optics. More corporate jargon for the dumb trying to look smart. Good points re said ‘optics’…amazing to think Team Hockey thought it was all worth it for $12K. Says a lot about the Fat Conductor and his wife.

  21. John Howard cut the civil service in 1996, causing Canberra house prices to fall.
    Joe Hockey bought his place in 1997.
    John Howard then expanded the civil service, causing house prices to rise.
    Is this a case of insider trading?

  22. Not too sure what the fracas is about. Politicians have for the best part of 30+ years being taking tax payer money both whilst ‘sitting in parliament’ and after their time. Pensions, cars, travel, meals etc etc, they are all more or less the same thing. What upsets the majority of people is that ‘I cannot claim this, and I cannot claim that and I am working 2 jobs just to get by’.

    Is it right? I don’t think so. I think they are paid a sufficient salary and out of that salary they should ‘pay their way’ but then lets look at those who are (or were) in the mining sector. They were paid upwards of $160-$200k per year, worked for somewhere between 6 months to 8 months of the year (depending on rosters) and whilst on site they still got their meals, accommodation etc. Is it different because a ‘Company’ is paying for those entitlements…..

    Hockey put his foot in it and it has angered people not because of the ‘entitlements’ (because they have been going on way before, and will continue on well after this crowd in government) but because of the stance and image he portrayed both in saying ‘The end of entitlements will apply to all’ and most recently ‘get a good job to get a house’. They both speak more of the character of the person and his total disconnect from the middle to lower ends of town who are feeling it more than those at the top end and this is where the backlash is. This is a fact because as the article states – He has been claiming these since the late 90’s, some 17 years ago and it is only being brought up now.

    So whether you agree with the situation or disagree, the facts are that if you were given an ‘allowance’, be it a fleet vehicle, fuel card, mobile phone or something else as part of your ’employment’ package then you have benefited from the system. If you haven’t well then I guess you can be a little angry but it happens in most businesses throughout the world and governments have and will continue to offer these entitlements ‘at the tax payers expense’.

    Again, do I agree it’s right… No, but I also have a work car that I use to commute to and from work for 3 hours a day so I guess I’d be a bit of a hypocrite if I took the hard moral ground.

    • I still don’t think it can be compared to business. Employees generally travel to a variety of locations and they don’t have an ownership stake in where they stay. Canberra is a devoloped city with amenities, can’t exactly compare that with mining companies feeding their workers in the middle of nowhere.

  23. Agreed, the public ire is magnified due to the fact that he alternated his hooves between sucking on said cigars or doing a ‘best day of my life’ dance but it is different if a company is paying as not every taxpayer is a shareholder. Also, the car, phone, fuel allowances are usually factored into a person’s employment package in some way or other and aren’t really seen as ‘benefitting from the system’ just that they get non-cash remuneration in those particular roles. I don’t dispute that politicians should get a living away allowance at all but maybe it needs ‘restructuring’…
    I dunno, I just can’t seem to get past the notion that it smells too much like a ‘related parties’ transaction to me…

  24. SoMPLSBoyMEMBER

    “A great leader never sets himself above his followers except in carrying responsibilities.”
    Jules Ormont

  25. arescarti42MEMBER

    Here are the travel allowance rates:

    http://maps.finance.gov.au/parliamentarians_travel/TA_rates/Senators_and_Members_Travelling_Allowance_Rates.htm

    What’s particularly interesting is that for travel to most cities there are two rates, commercial (e.g. a hotel) and non commercial (staying with friends), with the non commercial rate a fraction of the commercial rate.

    Travel to Canberra however has only the one rate, which is somewhere in between the two rates. The Canberra rate is also applicable to a much wider area – anywhere within 30km of Parliament house, compared to 5-10km from the GPO/Airport in other cities.

    What this all makes me think is that the travel allowance rules have been specifically designed to encourage politicians to either buy their own property for when they stay in Canberra, rather than get a hotel room.