Frozen out of the top incomes

There’s been a lot of talk lately about the average and ordinary New Zealander. National Party leader Simon Bridges travelled the country looking for them, occasionally stepping out of his chauffeur-driven Crown car to encounter one or two. This week Prime Minister Jacinda Ardern referenced them loudly and often as she announced a freeze on politicians’ pay and a review of how that pay is set by the Remuneration Authority.

First, it would be churlish not to acknowledge that a freeze is a good thing, and timely too, given that many average and ordinary New Zealanders are seeking decent pay rises after so many years of austerity. Also, it is equally good and timely that our politicians are finally recognising the need for a review that might end up tying future salary rises to those accorded average Kiwis, and that it is to stop giving public service bosses extravagant bonuses.

But it’s hard to think of the timing of the announcements, the context in which they’re made, and not consider a political motive and a potentially empty gesture that highlights disparities rather than seeks to dispel them.

For all the talk of average and ordinary New Zealanders, it’s worth noting that our politicians left that particular cul-de-sac long ago.

Our prime minister is just your typical young mum who earns $460,000 a year and whose accommodation, transport and other basics are heavily subsidised. We genuinely don’t begrudge her that, or the near $300,000, plus perks, paid to hard-working Cabinet ministers. Many of them engage well with their fellow Kiwis, but there is simply no comparison with the average ones, many of whom will probably struggle to feel a great deal of pain or sympathy for a backbench MP whose salary is frozen at $160,000 and counting.

Even if the rules governing the Remuneration Authority are changed, and MPs’ future pay increases are more modest, the damage has been done, and they will continue to receive substantially above the average wage.

That’s the bigger, more disturbing truth potentially obscured by the temporary glow of a pay-freeze publicity, no matter how wellintentioned: real wages for most Kiwis have gone backwards while those of a select few, including our MPs, have soared. Our parliamentarians now rank in the top 1 per cent of income earners. Teachers are a case in point. There will be many other similar comparisons. In the late 70s, a primary school teacher earned almost three-quarters of a backbench MP’s annual salary. Today, the top teacher is paid less than half the lowest-ranked MPs.

This is not to suggest that teachers, nurses, police officers and others be paid at the level of an MP. The jobs, responsibilities and burdens are very different, making too direct a comparison difficult. But pay freezes and reviews aside, our parliamentarians will have achieved little if they simply lock the yawning disparity in place, to continue indefinitely.

Real progress for those average and ordinary New Zealanders whom our politicians profess to hold so dear to their hearts will be made only when the gap between the two is substantially narrowed, and all Kiwis can point to real gains in income and purchasing power.

Not just your average and ordinary MPs.