Parliament food prices spike after MPs reject $3.5m plea

The price of some food at Parliament has surged after ministers rejected a one-off request for more than $3.5 million to help cover costs.

Parliamentary Service chief executive Rafael Gonzalez-Montero had told MPs the extra funding would be needed to move the service in-house.

In September last year, Gonzalez-Montero announced catering on the precinct would be moving in-house after ICON Venues - the company which had managed Parliament's cafe, bar, and restaurant since 2017 - decided to end its contract.

In a statement to RNZ, Gonzalez-Montero said it was a "good opportunity" to bring the service in-house. He confirmed he knew when making the decision additional funding would be needed.

Soon after, a paper outlining the possible options for managing catering internally was presented to a Cabinet committee on behalf of the Speaker and the Parliamentary Service.

It included a request for almost $2m to cover the immediate cost of the transition. A further $1.7 million would be needed over the next 18 months, the paper said, to cover potential losses.

Gonzalez-Montero said the matter was then raised with the Parliamentary Service Commission, a cross-party group of MPs who advise the Speaker on services provided on precinct.

Emails sent to those involved in discussions, seen by RNZ, show some MPs suggested the Parliamentary Service should not spend any more on catering than it earned.

In the emails, Gonzalez-Montero said catering at Parliament made a significant trading loss and had never operated on a cost-recovery model.

The services offered at Parliament would have to change if they were to break even in the first year, he said.

Gonzalez-Montero suggested closing Parliament's bar indefinitely, reducing cafe opening hours and ditching the 30 percent MP subsidy at Bellamy's restaurant.

He acknowledged his suggestions would cause significant disruption but said there was no alternative option.

The Parliamentary Service "would need to make substantial cuts in its other service levels just to avoid significant redundancies," the email said.

Gonzalez-Montero has since told RNZ the bar would remain open and the cafe's opening hours remain unchanged but the 30 percent MP subsidy at Bellamy's restaurant is no longer offered.

He told RNZ the decision was made to use money from the Parliamentary Service's existing budget to cover the cost of moving the service in-house, following consultation with MPs.

It appears the Parliamentary Service had little choice, however. Finance Minister Grant Robertson confirmed to RNZ he declined the funding request late last year.

"The Parliamentary Service, which as announced last year has moved its catering in-house, made a request to the government late last year for more money to subsidise cost of running Parliament's café. We declined the request."

Gonzalez-Montero confirmed the cost of some items sold to the cafe had increased as a result of the changes and lack of additional funding.

"Although the price of some items has increased, some other prices have also decreased, this is part of our transition to a full cost-recovery model.

"The cost of catering at Parliament reflects our support for fair wages for the staff who provide this service and is a fair reflection of the cost for providing the best quality catering service that we can."

Parliament's Speaker, Adrian Rurawhe, told RNZ he had given the Parliamentary Service "clear direction" that the new catering service must be "sustainable, addresses the needs of Parliament, and is to the satisfaction of members".

The Parliamentary Service would provide regular reporting to MPs on the new operation, Rurawhe said.