IRD plan to spend $30M of taxpayers money on office renovations

PHOTO: IRD. FILE

Inland Revenue is estimated to allocate over $30 million for the renovation of its offices. National Party representative Nicola Willis criticizes the department as being “out of touch” with the cost of living crisis, particularly highlighting the expenditure of $46,000 on a meeting pod. However, IRD Commissioner Peter Mersi defends the expenses, stating that they are necessary to create effective and welcoming office spaces.

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According to information presented to the Finance and Expenditure Select Committee, around $30 million has been designated for renovations, refurbishments, and redecorations across 11 IRD sites during the 2023/24 fiscal year. The largest portion of the budget is allocated to the department’s Wellington Asteron Centre premises, which had to be vacated due to structural risks. Some fittings were also removed following a seismic assessment.

The committee was informed that the seismic upgrades necessitated the clearance of floor plates and partial demolition of a significant portion of the 12-year-old fitout. This situation presented an opportunity for Inland Revenue to refurbish the site, with plans to reintroduce activity-based working and a more collaborative and agile environment by the second half of 2023.

The refurbishment of the Wellington site is expected to cost nearly $10 million, which includes the purchase of a four-person meeting pod worth $46,325 and four-person seating pods costing $7,510. These additions are being made in lieu of constructing separate meeting rooms.

Approximately $7 million will be allocated for either refurbishing the current Christchurch site or fitting out a new one, while around $5 million is budgeted for refurbishment on Auckland’s North Shore. Most of the planned renovations are projected to be completed next year or in 2025.

National Party’s finance spokesperson, Nicola Willis, expressed concerns about the excessive spending by the tax department while New Zealanders struggle with the cost of living crisis. During a meeting of the committee, she questioned Revenue Minister David Parker about the appropriateness of these costs. Initially, Parker considered it an operational matter, attributing the need for substantial work to earthquake strengthening. However, he acknowledged his personal dissatisfaction with the amount spent by government departments on their premises, drawing from his father’s experiences as a small business owner who deemed his fitout inferior to that of the IRD.

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Commissioner Mersi explained the situation regarding the Asteron Centre, stating that the extensive renovations were inevitable due to earthquake requirements. He emphasized that the department was not engaging in excessive spending and that the changes had been planned for some time. Mersi believed it was a wise use of taxpayers’ money to ensure effective offices and a welcoming front-of-house area for visitors who require in-person assistance.

Willis seized on Mersi’s statement about no “gold plating” and questioned him about the proposed $46,000 expenditure on a four-person meeting pod. Mersi acknowledged the cost but explained that there would be a net saving overall as the department reduces the number of floors it occupies. He cited the shift in working styles as a reason for the expenditure, particularly in the Asteron Centre where two floors will be relinquished. This change reflects the department’s commitment to modern working practices while maintaining its purpose of providing assistance and support to taxpayers.