Decent MP salaries serve a purpose

The recent Labour-led Government decision to freeze the pay of MPs for a year was hailed by some as a long-overdue cutback, but how much should we pay people from the public purse and how much is too much for anyone to collect in a pay packet? The answer will depend on how much we understand about the role of MPs, and those who work for us and also on how much we value what they do. It will also be influenced by how much we earn ourselves.

The salaries of MPs are set by the independent Remuneration Authority, while the State Services Commission sets the salaries for senior public sector staff and local authorities have their own independent body to advise them on salaries for their CEOs. These processes are designed to prevent various authorities from setting their own pay scales, but the level of some pay packages has caused discontent in the community for some time. Those who struggle on low incomes or benefits – and that number has grown alarmingly in recent decades – will understandably resent what seem to be the massive salaries paid to some of our public servants, particularly politicians.

Unfortunately, also, there is a longestablished but ill-informed opinion in our folklore that all politicians, be they parliamentarians or local body councillors, are by their very nature untrustworthy profligate spenders of public monies. During nearly 40 years in journalism, during which I interviewed, met and talked with many politicians, I learned the truth to be very different. I disagreed with many of them, was impressed by some, and a small few were genuinely stupid. But I never met one who was not very aware of the need for prudence and frugality with public money. The hours and effort put in by politicians, particularly MPs, are daunting and damaging to health and families. They can spend days and weeks away from home and the novelty of travel and living in temporary digs out of a suitcase wears off within the first week or so. We also need to remember that a couple of generations ago, it was only wealthy and usually land-owning Pa¯ keha¯ men who could afford to stand for public office, as remuneration was a minimal token at best. That effectively prevented the average working man, Ma¯ ori or Polynesians, and all women from entering politics and it has been from the ranks of these groups that the majority of our most outstanding politicians have come in the past century or more.

The Government has now frozen the pay of all MPs for a year, pending law changes to tighten the parameters later next year.

The last increase MPs got was in 2016, when the Remuneration Authority gave them a 2.5 per cent pay rise across the board. That means Prime Minster Jacinda Ardern gets $459,739, Deputy Prime Minister Winston Peters gets $326,697, ministers inside Cabinet get $288,900, with those outside Cabinet on $243,841. Leader of the Opposition Simon Bridges gets $288,900, and for other party leaders, a base salary of $175,398 is supplemented with add-ons depending on the size of the party. A backbench MP with no additional responsibilities is paid $160,024.

While those packages might seem enormous to some, they are peanuts compared to top salaries paid in the private sector, headed by Fonterra chief executive Theo Spierings, who was on a massive $8.32 million in 2017, a 57 per cent increase from 2016. His salary was made up of a $2.46m base salary, superannuation benefits of $170,036, and performance payments for 2016 and 2017 of $1.83m and $3.85m. He is not the only one on a big salary in Fonterra, which has 23 other senior staffers on $1m or more a year.

While the public has some limited influence on what politicians and senior public sector officials are paid, they have little control over pay scales in privately owned industries. But it is these obscenely massive salaries that help to set the level which, it is assumed, the public sector has to compete to attract the right people for the top jobs. That is an assumption without robust logic, but it gives the wider community at least the right to voice an opinion on salaries paid in the private sector.

With average incomes lower than they have been in living memory in real terms, and the gap between rich and poor getting ever wider, perhaps it is time for the planned review of the Remuneration Authority empowering legislation to be expanded to cover all top salaries in the public and private sectors – and substantially lift the minimum wage, perhaps to a living wage. That will take some courage and it will only be a Labourled Government which would dare the attempt.

It would, without a doubt, be world leading and might also keep Labour in office for longer than a single term.

The hours and effort put in by politicians, particularly MPs, are daunting and damaging to health and families.