MPs’ pay & super age: Never-ending sagas

The late rapper The Notorious B.I.G best described the problem our politicians have when it comes to their pay: Mo Money, Mo Problems. It has always seemed somewhat paradoxical that those responsible for establishing conditions for workers do not get to enjoy those conditions themselves.

Politicians do not get many public holidays off — on Anzac Day it is frowned upon if they do not work by attending the various services in their electorates.

Nor do they get an alternative day off for those public holidays they work.

There is no such thing as overtime or regulated lunch breaks, five-day weeks are a luxury, and by and large, an eighthour day is as much a myth as a unicorn.

I know, diddums. Crack out the little violins.

What they do get is a salary package and allowances which are intended to compensate for all of that, as well as the glow of wellbeing from public service.

They also get regularly pilloried when they get pay increases.

While most workers want higher pay

increases and battle to get them, politicians want lower pay increases but are finding the job of getting them to be a Sisyphean task.

Their efforts are turning into something worthy of an episode of The Thick of It.

Back in his day, former PM John Key got sick of having to defend pay increases awarded by the Remuneration Authority.

It was particularly galling during the global financial crisis, when other workers were getting minimal increases.

So in 2009, Key legislated to require the Remuneration Authority to take economic conditions into account when setting the pay.

That did not work to his liking, so in 2015 he ordered the authority to scrap the criteria it had always used and instead peg MPs’ pay to the average increase in the public sector. Alas, it transpired that the public sector got rather more generous pay increases than Key expected and as a result, so did MPs.

Now Prime Minister Jacinda Ardern has decided to have a go as well — by returning to the system Key ditched because it was proving too generous.

That leaves the Remuneration Authority to set the pay using the same criteria it had used before Key scrapped it.

Many solutions have been proposed to help MPs out of the predicament of getting good pay increases. Perhaps the least helpful for the quest for smaller pay increases was the Green Party’s call for MPs’ pay to be pegged to the median wage.

Herald data guru Chris Knox calculated that if the median wage criteria had been used since 2007, MPs would be getting $172,000 — which is $10,000 more than they get now.

If overall wage growth was used, MPs would be earning slightly more than they do now.

If inflation was used MPs would be on about $15,000 less than they are now on.

Like Key once did, Ardern also froze MPs’ pay for 18 months while she decided what way was best. And just as Key did, Ardern may well now find that the Remuneration Authority decides it has to give MPs a bigger-than-usual pay rise over the next year to make up for the 18-month pay freeze.

The issue of superannuation also reared its head after National Party leader Simon Bridges announced his party would stick with the superannuation policy announced by Bill English in 2017.

That was to lift the super age in sixmonth stages from 2037 so it would hit 67 years old by 2040.

Back in 2011, Labour too was in its first term in Opposition when it adopted a policy to raise the retirement age to 67 — starting from 2030. Then leader Phil Goff said it showed “we’ve got the balls to do that — John Key doesn’t”.

Six years later, the balls switched sides. After losing two elections, Labour’s 2017 leader Andrew Little dumped the policy. Then Ardern repeated John Key’s pledge never to raise the super age while she led Government. Starting repayments to the Super Fund would do the job just fine.

The more money we come across, the more problems we see.