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Politics
Ben McKay

NZ PM Luxon U-Turns over $52k accommodation handout

NZ leader Chris Luxon has been claiming an allowance for living in his own flat in Wellington. (Mick Tsikas/AAP PHOTOS)

In a chain of events kicked off by cricketer Usman Khawaja, New Zealand Prime Minister Chris Luxon has been outed taking a taxpayer-funded allowance to live in a flat he owns outright.

In the space of two hours, Mr Luxon completed a reverse-sweep that would make Khawaja proud - first defending the payment then promising to pay it back.

"It's an entitlement and I'm well within the rules," he told reporters in Queenstown at around 3pm on Friday.

"It's become a distraction," he then told Newstalk ZB after the 5pm news.

"As such, I have decided today that I will no longer claim the allowance and will repay anything I have received."

The odd episode in Kiwi politics began when Mr Luxon hosted the Australian and New Zealand Test teams at a reception on Monday at Premier House, the country's Wellington residence for sitting prime ministers.

At the event, he told players he was not living there, instead staying at his own apartment.

That admission - as relayed by Khawaja the next day - prompted enquiries if Mr Luxon was claiming a rarely-used allowance offered to non-Wellington based prime ministers for their accommodation in the capital.

Turns out, he was.

Kiwi outlet Newsroom reported on Friday morning Mr Luxon was the allowance, worth $NZ52,000 ($A49,000) annually.

Mr Luxon is wealthy, owing to his previous career as an executive for Unilever and Air New Zealand.

At the national carrier, he reportedly earned $NZ4.2 million ($A3.9 million) in his final year as chief executive, a role he held for six years.

He owns seven properties without a mortgage according to his financial interest disclosures.

As well as the Wellington apartment, he owns six properties in Auckland; including two that his family uses -  a home in the eastern suburb of Remuera and a holiday home on Waiheke Island - and four as investments.

One of those investments is his electorate office, a property which is also subsidised by taxpayers.

It became plain during Friday that Kiwis couldn't stomach Mr Luxon pocketing the allowance for his taxpayer-funded flat.

Social media was awash with criticism, with Mr Luxon crediting journalists at the press conference and talkback radio listener responses for his quick u-turn.

 "I thought 'wow, people are pretty fixated on the allowance'. I thought 'what's going on'," he told Newstalk ZB.

"I'm well within the rights and well within the rules but frankly it's a distraction (so) I will live on my own costs."

Mr Luxon said he would pay back what he has received to date: around $NZ13,000 ($A12,000).

The revelation was plainly damaging to Mr Luxon given he campaigned on "ending wasteful spending" from the previous Labour government.

Just last week, he pledged the government would "stop treating taxpayers like an ATM".

Opposition leader Chris Hipkins attacked Mr Luxon, who had recently launched a crackdown on welfare recipients citing the need for "tough love".

"He needs to apply his own tough-love standard to himself," Mr Hipkins said.

The scandal all started with the Australian Test opener's comments at the start of a press conference on Tuesday.

New Zealand PM Chris Luxon with the NZ and Australian test teams
The revelation about the allowance emerged from a conversation with Australia's Usman Khawaja.

"The prime minister said he couldn't live in his place," Mr Khawaja said, referring to Premier House.

"He said it was condemned, the kitchen was condemned ... I said, 'why don't you live here?' He said, 'I'm actually not allowed, it was condemned'."

"I said 'what?!' You're the prime minister, fix it!'

"He was like 'oh, that costs money'. I'm like, 'surely there's some money in the New Zealand system!"

Mr Luxon denied using the word 'condemned' but admitted it needed work before he could live in it.

That maintenance is set to take place, with Mr Luxon saying he was eager to move in.

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