PM defends, then u-turns on, $52k payment for mortgage-free Wellington living

UPDATE 6PM: The prime minister has announced he will now pay back his accommodation allowance, telling journalists, "It's clear that the issue of my accommodation allowance is becoming a distraction".

Prime Minister Christopher Luxon started the day being questioned by preschoolers and ended it facing a grilling from journalists over revelations he is claiming a $52,000-a-year accommodation supplement to live in his own mortgage-free home in Wellington.

Mr Luxon is the first prime minister in decades to do so, and this afternoon in Queenstown he repeatedly defended his decision, making no commitment to paying it back.

"It's an entitlement and I'm well within the rules."

Mr Luxon says his preference while in Wellington for work would be to live in Premier House, but he is choosing not to because of well-documented maintenance issues there.

Previously, Mr Luxon famously said, 'If I can pay, I should pay', in relation to National's opposition to the former government's universal waiving of the $5 prescription fee.

He was reminded of the statement today, and asked if he still believed it, as well as if he thought it was hypocritical or greedy of him to claim the stipend - the equivalent of a few grand off a starting teacher's salary.

But he was adamant it was his for the taking as an Auckland-based MP.

"I come down on a Monday and I leave on a Wednesday...anyone outside of the greater Wellington area is entitled to the entitlements.

"I don't know how to explain it any clearer to you. 

"It's the same rules for everybody."

Mr Luxon was speaking with media at Queenstown tourism business iFLY, after earlier hanging out with 80 under five-year-olds at ACG Queenstown Early Learning Centre in Frankton.

He handled the youngsters' prepared questions with much greater ease, telling them he preferred Bluey to Peppa Pig, he wasn't that great of a fisherman, and he had two children with red hair. The only question from the preschool floor about his housing situation: 'What colour is your house?' (the answer, grey).

He left after a couple of waiata, plenty of invites to upcoming fifth birthday parties, and a full brief on who still required training wheels on their bikes and who didn't. Left behind on the art table, a signed sketch of the beehive by the PM himself.

Prime Minister Christopher Luxon talks training wheels, fifth birthdays and superheroes with preschoolers at ACG Queenstown Early Learning Centre in Frankton.

Next stop was iFLY, where with Southland MP Joseph Mooney Mr Luxon donned a flying suit and personalised helmet and took to the air, hosted by business owner and district councillor Matt Wong.

Perhaps even more daunting than the high-flying tourist attraction after today's breaking news, Mr Luxon then faced a media pack, all focused on claims of hypocrisy that the leader of a government demanding others in the public sector tighten their belts appears unwilling to do the same himself.

There was little time for questions on local issues, but Crux did ask the prime minister about his continued 'no' to calls from Queenstown Lakes for a bed tax.

If no tourist tax, what's his government's next great idea for fresh revenue streams to help take some of the weight of infrastructure investment off ratepayers?

His initial response related to what he called Queenstown's "acute" housing problem, for which the solution he touched on focused on freeing up more land for developers more easily.

Prime Minister Christopher Luxon dons personalised helmet and jumpsuit to take to the air at Queenstown's iFLY, Friday, March 1, 2024.

When steered back to the question of how the Queenstown Lakes District can pay for much-needed infrastructure without the ability to tax tourists, he largely stuck to pre-election talking points, and didn't appreciate being interrupted when Crux tried to ask for specifics.

"There's lots of different funding and financing mechanisms, if you look at other small advanced economies around the world of a similar size to us.

"We're very open to sovereign wealth money, overseas money, pool of capital here in New Zealand, public-private partnerships, toll roads - all those options are on the table."

Main image: iFLY owner and Central Otago District Councillor Matt Wong hosts Prime Minister Christopher Luxon and Southland MP Joseph Mooney at his Brecon Street business in Queenstown, Friday, March 1, 2024.