No pay rise for MPs until law reviewed
The Government has frozen the pay of all MPs for a year, pending law changes to tighten the parameters in which their salaries are set.
MPs’ pay is set by the independent Remuneration Authority – a process that deliberately keeps the annual pay review at armslength from politicians.
However, the Government has the power to set the criteria that the authority applies and Prime Minister Jacinda Ardern has announced a review of the act that governs the process.
Speaking at her weekly postCabinet press conference yesterday, Ardern said it was not appropriate to allow a planned 3 per cent pay rise to go through.
The Government coalition parties had all agreed to it, and Opposition leader Simon Bridges was informed of the decision earlier in the day. Ardern said he was also supportive.
But it was unlikely to get much, if any, pushback from MPs on either side of Parliament. The issue of MPs’ pay has always been fraught, with several former prime ministers – including Sir John Key and Sir Bill English – expressing unease at pay increases in years past.
In 2015, under Key, MPs hurriedly passed a law to cut their controversial pay rises but still
gained an average increase of more than $5000 that year. The law change saw MPs’ pay tied to average wage increases as determined in Statistics New Zealand’s Quarterly Employment Survey – resulting in a 1.5 per cent pay rise,
instead of the 3.5 per cent the Remuneration Authority had set.
MPs have also systematically legislated to try to reduce additional perks like travel costs that used to stretch far beyond their parliamentary term.
Green Party co-leader Marama Davidson said MPs should eventually only get the same pay rise as the average worker, ‘‘in dollar terms’’.
‘‘MPs are paid well above the average worker, so giving them a
percentage rise accentuates their higher pay.’’
Ardern’s announcement comes as the Government is locked in a contentious pay negotiation with teachers, and is soon to start collective bargaining with other major public services.
The latest Remuneration Authority decision has been delivered to the Government but not enacted. It said the authority was ‘‘legally obliged’’ to deliver MPs a 3 per cent pay rise.
Workplace Relations and Safety Minister Iain Lees-Galloway said new legislation would be pushed through Parliament as a matter of urgency.
‘‘Because of the timing of the annual increase process set in the act, we need to use an urgent legislative process, aiming for introduction in September.’’
If left untouched, the pay decision would come into effect partway through September and would be backdated to July 1.
The authority’s 2016 decision saw MPs get a 2.5 per cent pay rise across the board.
Ardern earns $459,739, with Deputy Prime Minister Winston Peters on $326,697. Ministers inside Cabinet earn $288,900, with those outside Cabinet on $243,841. As leader of the Opposition, Bridges is on $288,900, and for other party leaders, a base salary of $175,398 is supplemented with add-ons depending on party size. A backbench MP with no additional responsibilities earns $160,024.