MPs’ pay rise not a simple matter
IN the court of public opinion there may never be a right moment for members of Parliament to get more pay, but the timing of the announcement of proposed increases this week seems particularly fraught.
It has happened against the backdrop of a poor poll result for the government, public service cuts, the police pay dispute dragging on, junior doctors about to strike over their pay offer, health spending under pressure, increasing unemployment and the cutting of public transport subsidies. When the constant refrain from the government has been about the ‘‘cost of living crisis’’ and the pressure people are under to make ends meet, it is understandable many constituents are aghast at politicians getting a pay rise which takes the basic MP salary from $163,961 to $168,600.
If the authority’s recommendations are implemented, further increases over the next two years will bring it to $181,200 by the end of the parliamentary term.
Not that the timing, or the increases have been chosen by parliamentarians.
They are rightly kept at arm’s length from recommendations on their pay and expenses with the independent Remuneration Authority doing that work, as set out in the Remuneration Authority Act 1977.
This year the authority, rather than just adjust the existing rates, undertook a ‘‘green fields’’ review of MPs’ pays, the first for more than 20 years.
The authority considered the skills and qualities needed for the position of MP, the pay of MPs in other Westminster style democracies and remuneration paid elsewhere within New Zealand in both the public and private sectors.
It found these comparisons showed ‘‘with some caution’’ that MPs’ salary were less than the salaries of almost all those comparisons.
As the authority pointed out in its 54page report setting out how it arrived at its decisions, an entirely formulaic approach was not appropriate for remuneration decisions because judgement was involved in every aspect.
Whenever it made a decision, the authority applied a ‘‘felt fair’’ test.
Part of the authority’s considerations involved comparisons of the purchasing power of New Zealand MPs’ salaries with that of those in Australia, the United Kingdom, Canada, Ireland, and the Australian states.
Tasmania, where apparently there has been a pay freeze, was the only one of these where MPs’ purchasing power was estimated to be lower than that of New Zealand MPs.
It also made the observation that although the prime minister’s job ‘‘is undoubtedly the largest job in the country regardless of what system is used to determine jobsize’’, the holder of that job would be regularly interacting with senior public service and private sector executives getting more money than they were.
This was common to all four of the comparator countries, although the authority could not find any ‘‘credible documentation’’ explaining the rationale for that. It concluded there was a consistently conservative approach applied in similar democracies to the payment of the prime minister. Is that merely confirmation of concerns top executives’ pay, whether in public or private settings, has increased at a rate in recent years which defies common sense?
Christopher Luxon has already said he does not want or need his recommended increase which would take his salary from $471,000 to $484,200 initially and then to $520,000 by the end of this parliamentary term.
He said he would donate the increase to charity and has not given any indication he is considering legislation to freeze pay as the former prime minister Jacinda Ardern did in 2018. Whether constituents see that as the right call may depend on whether they regard politicians as overpaid bludgers sucking on the public teat or people doing a tough, complex, peculiar and precarious nationally important job, often away from their families, with punishing hours and under unrelenting and sometimes brutal public scrutiny.