Otago Daily Times

MPs’ pay rise not a simple matter

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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.

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Christophe­r Luxon

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