Pay freeze savings

WELLINGTON: The Government’s decision to freeze MPs’ pay will save taxpayers’ $750,000.

A regulatory impact assessment of the decision, written by the Ministry of Business, Innovation and Employment (MBIE), also revealed officials tossed up the idea of giving MPs the option of donating their wouldbe pay rise to a charity of their choice.

Last August, Prime Minister Jacinda Ardern announced MPs would not receive a pay increase as she did not believe it was fair.

The Remuneration Authority — an independent body that sets MPs’ salaries — advised it planned to increase MPs pay by 3%.

For an MP earning a base salary of $163,961, a 3% increase would be just under $5000.

Ms Ardern said that was ‘‘not acceptable to this Government’’.

The MBIE impact assessment also showed there were options available to address what it called the ‘‘growing imbalance in pay between those on highly remunerated salaries and the rest of New Zealand’’.

One of these options was MPs resolving to pass on any pay increases to charity until the next determination was due this year.

‘‘MPs could pass a unanimous resolution to voluntarily give the increase in salaries and expense allowances to a nominated charity. This option would not require amending the Act.’’

But this was not recommended by MBIE.

‘‘As this option is voluntary, there could be a lack of transparency around whether MPs provide their pay increases to charity and no ability to require MPs to comply,’’ the assessment said.

It also said this option would be too complicated.

Instead, MBIE recommended a freeze on MPs’ salaries and expense allowances at 2017 levels until the next determination was due this year, while conducting a review of the settings for how MPs’ salaries and allowances were determined. — NZME