MPs are having pay reviewed, but no guarantee it will go up

The potential for a backlash if MPs are given a pay rise in the next two weeks, at the same time the Government is cutting public spending, and as many households struggle with economic hardship, is not lost on Finance Minister Nicola Willis.

“I don’t want one,” she said of a pay increase yesterday, before making her way into the House.

The Renumeration Office should in the next fortnight determine Parliament’s salaries, its chair Geoffrey Summers said.

This means MPs could be in for a pay rise – but Summers, who is leading the work, said there was no guarantee.

“We are required to look and work out what people are paid elsewhere,” he said. “We make a comparison with the same level of responsibility.”

The breakdown

The Renumeration Office is an independent body that sets the pay for key office holders such as judges, local government representatives and some independent statutory bodies, as well as MPs.

Summers, who is a remuneration expert, said there were five legal requirements the authority had to consider when deciding what MPs’ pay should be, as set by law. These were:

■ Fair relativity with comparable positions

■ The need to be fair both to the individuals whose pay was being set, and to taxpayers

■ The requirements of the job

■ The need to recruit and retain competent individuals

■ Any prevailing adverse economic conditions (which may lead the authority to set remuneration at a lower rate).

Summers said the authority would also factor in the fact the economy was in a recession, as well as what MPs were paid in other Westminster-style democracies. It also makes its assessment without regard for what MPs are paid now – so there is no guarantee it will go up, even though MPs have not had a pay rise since 2017.

By the numbers

The prime minister gets $471,049 a year, the deputy prime minister $334,734, ministers within cabinet $296,007, and ministers outside cabinet $249,839.

The leader of the Opposition gets $296,007, and other party leaders have their remuneration determined by the number of MPs in their party in Parliament.

The speaker is paid $296,007, and the deputy speaker $209,471. Whips have a base salary of $179,713 and earn more depending on how many MPs the party has.

Backbencher MPs get $163,961 a year. Those who chair or deputy chair select committees earn $179,713 and $163,961 respectively.

On top of that, there is an allowance for office expenses of $22,606 for the prime minister, and $16,980 for other MPs.

MPs also get a contribution to their superannuation equal to up to 20% of their salary – paid on a ratio of $2.50 for every $1 contributed. The prime minister also gets an official residence in Wellington, known as Premier House, or $52,000 a year in continuous accommodation payments.

MPs can receive up to $31,000 a year for their Wellington accommodation, reduced if they share with another MP.

Ministers and party leaders shied away from talking about the issue yesterday.