Councils are responsible for valuing the cost of the vehicle and deducting the remuneration of the mayor or regional chair. Refer to clause 9 of the latest Local Government Members Determination.
The Remuneration Authority limits the actual purchase price for a vehicle bought for a mayor or regional council chair. The price is set each year in the determination.
Actual purchase prices include:
For motor vehicles purchased after 1 July 2018 the maximum price is:
These limits do not apply to existing motor vehicles purchased before 1 July 2018. In these cases the actual purchase prices are grand-parented until the existing vehicles are either replaced or relinquished.
Remuneration deductions are determined by how the vehicle is classified for use. Deductions apply for vehicles regardless of when it was purchased.
Full private use vehicles are:
The deduction for full private use vehicles is the actual purchase price (v) x 41% x 20%. For example, the deduction for a full private use vehicle valued at $40,000 is $3,280 per year.
Partial private use vehicles are:
All travel in a partial private use vehicle must be recorded in a logbook.
The deduction for partial private use vehicles is the actual purchase price (v) x 41% x 10%. For example, the deduction for a partial private use vehicle valued at $40,000 is $1,640 per year.
The minimum amount for partial private use is 10%.
Restricted private use vehicles are:
There are no remuneration deductions for restricted private use vehicles.
A council provides a mayor or regional chair with a vehicle valued at the actual purchase price of $42,800.
|Full private use||Partial private use||Restricted private use|
|Annual remuneration as shown in either schedule 1 or schedule 2||$85,220||$85,220||$85,220|
|Motor vehicle deduction||$3,510||$1,755||$0|
A council may deduct the rebate they have received through the Clean Car Discount scheme, from the purchase price of the eligible motor vehicle, before calculating the deduction to the mayor’s or regional chair’s remuneration for the full or partial private use of the vehicle.
Note that there is no change to the maximum purchase prices, as shown in the latest determination, which may be paid for an eligible vehicle purchased by the council.
Therefore, a council could purchase an eligible vehicle up to the maximum value of $76,000, ie: $68,500 (maximum purchase price) + $7,500 (public authorities’ new vehicle rebate received).
If a mayor or regional chair has full private use of an eligible vehicle, the adjustment to their annual remuneration would be calculated as follows:
$76,000 (actual purchase price incl: goods and services tax and on-road costs) - $7,500 (discount/rebate received) = $68,500
$68,500 x 41% x 20% = $5,617 (deduction from mayor’s annual remuneration).
$59,990 (actual purchase price incl: goods and services tax and on-road costs) - $7,500 (discount/rebate received) = $52,490
$52,490 x 41% x 20% = $4,304 (deduction from mayor’s annual remuneration).
In some circumstances, a council may consider whether it is appropriate to install charging infrastructure in the private residences of their mayor or regional council chair who are provided with a council electric vehicle.
Sensitive expenditure such as this is any spending by an organisation that could be seen to be giving private benefit to a staff member, their family, or friends. It risks harming an organisation's reputation and the public sector more generally.
In considering whether it is appropriate to install charging infrastructure in the private residences of mayors or regional council chairs, councils should first consider the sensitive expenditure principles published by the Office of the Auditor-General. Such expenditure must:
If a council approves the provision of charging infrastructure in the private residences of their mayors or regional council chair, it must be included in their expenses and allowances policy which should be published on their council website. This is deemed to be a rule prescribed by the Authority under schedule 7, section 6(3)(b)(ii) of the Local Government Act (the Act) for all local government members listed under schedule 7, sections 6(1) and 6(2) of the Act.
The policy should cover both the provision of the infrastructure and how it will be treated when the office holder no longer holds the office of mayor or regional council chair.
The use of electricity (for business and private use) should also be covered and be consistent with the policy and reimbursement rules the council applies if the electric vehicle was a petrol or diesel vehicle.
The Authority expects councils to publish details of the purchased vehicles in its annual financial statements.
This should include the vehicle’s annual value as a part of the mayor or regional chair’s total remuneration.
A vehicle’s annual value is 41% of the actual purchase price.
If a council approves the provision of a vehicle for their mayor or regionals chairs, the policy must be included in: