The Kennetts' taxpayer-funded arrangement was uncovered by Fairfax Media as it investigated details about Mr Kennett's expenses revealed following a freedom-of-information request made by the Electrical Trades Union.

The revelations are likely to rekindle controversy around publicly funded perks for Australia's political class, the most recent row having been over Victorian Labor MPs rorting overnight travel allowances.

On Sunday Mr Kennett defended his use of his entitlements as a former premier and accused Fairfax Media of "mischief". He said the rental payments to his wife's superannuation fund had been verbally approved by an official during the mid-2000s under the Bracks Labor government.

In power from 1992 to 1999, Mr Kennett was an outspoken advocate for open markets and small government; he is renowned for slashing public service jobs, closing schools, and privatising transport, energy and roads.

But as a former premier Mr Kennett is entitled to a publicly funded office space and secretarial support, travel and other expenses on top of his parliamentary pension. The idea of the entitlements is to support former premiers in their ongoing public duties.

He has racked up nearly $400,000 in expenses - including 55 cents for a "giant" paper clip - since 2009 (excluding staff costs).

More than half that spending has been on the lease of an office building in Balmain Street near the Yarra River, which is owned by JGK Nominees whose sole shareholder and director is Mr Kennett's wife, Felicity. Mr Kennett said this was his wife's superannuation fund.

Ms Kennett's company bought the property in 2009 for $1.1 million.

The other surviving former premiers - Denis Napthine, Ted Baillieu, John Brumby, Steve Bracks and John Cain - have office space in government-owned buildings at Treasury Place at the top of Collins Street.

Mr Kennett said that in the mid 2000s the Bracks government asked him if he might leave Treasury Place and find alternative accommodation to make way for a former governor. He said he could have rented space from anybody, even a reporter at The Age. He described the arrangement as "hands off" and acceptable to the government of the day.

The Victorian Heritage Database describes the Kennetts' 1870s former grocery shop as "historically significant" and "notable as the oldest surviving corner store within Cremorne".

Mr Kennett had a similar arrangement before 2009, using his entitlement to lease a nearby building in Swan Street which was co-owned by his wife.

It is unclear how much public money was spent on that earlier lease as the freedom of information documents only cover the past nine years of expenses.

The Swan Street property was sold for a healthy profit in 2009.

Since leaving politics, Mr Kennett has been a prominent media commentator, founder and head of beyondblue, a board member of multiple companies and twice president of Hawthorn Football Club.

He has boasted about his thrift and hard work, tweeting in 2015 about how he still worked six days a week, was "self funded" and had saved for years.

The expenses data also details extensive use of government cars by Mr Kennett totalling nearly $150,000 from mid 2008 to mid 2017.

And they reveal that Mr Kennett claimed expenses for as little as 55 cents for a "giant" paper clip, along with dozens of airport parking tickets, some as little as $5.45 each.

Electrical Trades Union (ETU) state secretary Troy Gray accused Mr Kennett of "rorting his entitlements".

"This has got to make Jeff Kennett Victoria's biggest welfare cheat," he said.

The ETU has been locked in a dispute with one of Mr Kennett's companies after Crown Casino sacked 16 casino technicians and outsourced the work to a business run by Mr Kennett.

Mr Kennett accused Fairfax Media of working on behalf of the ETU.

Monash University governance expert and former Labor MP Ken Coghill, said while the Kennett arrangement may not be illegal - due to the loose guidelines - it did raise ethical concerns.

"My personal view is that allowances like that should be treated very, very cautiously and accordingly that it would be wise ethically ??? to avoid arrangements where there was some personal benefit to the former premier himself or a member of his family," said associate professor Coghill.

However, the Kennett deal appears to be within the loose, unpublished guidelines for former premiers' entitlements which are decided by the premier of the day - the premier who will one day also be a 'former' premier.

On Friday, the Department of Premier and Cabinet was unable to find a copy of the guidelines other than a brief and unexacting list of conditions spelt out in letters from premiers to their predecessors.

Premier Daniel Andrews has defended the arrangements he has signed off on. "All former premiers have certain entitlements and they won't be changing," said a government spokesman in a brief written statement.

Mr Kennett has built a substantial income outside his government perks and pension. As a director of Channel Seven and Equity Trustees he earned more than $250,000 in fees last financial year. His stake in those companies totals almost $2 million.

He is also the chair and director of other companies where his income and/or investment are not publicly disclosed.

Asked if he could understand how a Victorian taxpayer might view his accommodation deal as questionable, Mr Kennett said he could not. But he said he could imagine how Fairfax Media would interpret the the deal. "Go and do your mischief."

JGK Nominees, which owns the Balmain Street property was controversial in the 1990s as the owner of Mr Kennett's advertising business, KNF. At the time Mr Kennett was a shareholder and director of JGK Nominees.

While premier he was accused of using his position to benefit his advertising agency, with KNF receiving money from state government agencies for marketing and promotion work.

He was forced to quit as a director of both KNF and JGK Nominees in 1993.

MPs entitlements have been increasingly contentious in recent years in both Spring Street and Canberra.

Earlier this year, Premier Andrews overhauled entitlements rules for current MPs after Labor parliamentarians Don Nardella and Telmo Languiller claimed a lucrative "second residence" allowance to live on the Bellarine Peninsula, away from their electorates in the western suburbs.

Before becoming prime minister, Mr Turnbull attracted criticism for claiming travel allowance when staying in a luxury Canberra apartment owned by his wife Lucy

Former treasurer Joe Hockey also sparked a row by renting out rooms to fellow Liberal MPs in a house he and wife Melissa Babbage owned near Parliament House.

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