Key calls for pay freeze for MPs and Judges
January 22nd, 2009 at 1:32 pm by David FarrarPrime Minister John Key has urged the Remuneration Authority to freeze MPs’ pay at its next review due to the tough economic times.
Mr Key today said he had also written to the Remuneration Authority asking it to exercise restraint when considering all salary rises in its jurisdiction.
The authority, which is independent and free to ignore Mr Key, determines pay rises for MPs, the judiciary and specified statutory officers and members of local authorities and community boards.
We won’t know until late 2009 if they take heed, but I think they will.
Mr Key said it was still a case of the Government leading by example.
“The New Zealand economy is facing what looks to be a difficult time ahead,” he said.
“It is only right that in these changing economic times, as ordinary New Zealanders tighten their belts, MPs and ministers also play their part.
“While the Remuneration Authority is an independent body I would hope that it recognises the current economic climate calls for a cautious use of taxpayer money.”
Mr Key said the National Party would also file a submission with the authority calling for a zero pay increase in parliamentary salaries.
As I have said many times before, I think the law should be changed so MPs salaries never change during their term of office. The Remuneration Authority should set pay rates for an entire three year term, a few months before each scheduled election.
Tags: John Key, Remuneration Authority
January 22nd, 2009 at 1:36 pm
You have to ask why he didn’t do this earlier. It is a great idea but given Obama’s announcement that I heard on the radio this morning about freezing wages in Washington, this just looks like Key has jumped on the band wagon.
Vote:January 22nd, 2009 at 1:46 pm
Wouldn’t it be great if people’s actions could be judged on whether they were the right thing to do, instead of what they “looks like”? If someone else has a good idea, is it necessarily a bad thing to adopt that, even if the originator is from a different political point of view?
Vote:January 22nd, 2009 at 1:52 pm
Not at all but the fact the there is general public contempt for NZ MP’s salaries rising EVERY SINGLE year is not a secret. And it goes across the whole political spectrum.
To make matters worse, EVERY SINGLE time we get told that it’s out of the MP’s hands because its up to the Remuneration Authority.
Maybe this is the case, but it smacks of bullshit to me. I just feel that it is something that Key could have got on to much quicker, especially given they got a pay rise almost straight after Nation got into power.
Vote:January 22nd, 2009 at 1:54 pm
A good start by Neville Key, now he needs to extend that to ALL public sector workers and all pay grades of the public service.
This is the price the public sector should pay for having recession/depression proof tax payer funded jobs.
Vote:January 22nd, 2009 at 2:02 pm
Perhaps MP’s pay rises should be individually struck, and linked to their successful re-election. Would mean 3 years of the same pay (which is not unusual in management roles) and the taxpayer would be ‘deciding’ if/when to pay them more.
Vote:January 22nd, 2009 at 2:14 pm
Thats odd, Helen never did anything like this, it clearlymust be wrong.
Phool Giff will no doubt protest it at the earliest possible.
Vote:January 22nd, 2009 at 2:22 pm
Goof will protest it is just like Muldoon’s wage freezes and that National are living in the past. Of course that will imply he is sitting in a corner with a sign on his head that says: there is no recession. But no one will notice because it won’t be pointed out over the muldoon/key media play.
and yes, it is untrue that MP’s cannot influence the Higher Salaries Commission. No matter how many times you say it, it doesn’t get accepted as true because politicians continue the line that it’s all out of their hands. And people believe them, because it’s in the Herald and the Herald never lies.
Vote:January 22nd, 2009 at 3:36 pm
BB, I agree with your point about holding personnel costs across the public sector at large.
As an aside, though, how about dropping the “Neville Key” stuff now that you’ve given it a fair run. Let the man get on with the job, and give him a reasonable chance to show results. By all means debate his policies and his actions (I’ll join you in a number of criticisms over time, I imagine), but attaching a silly label to Key personally is achieving nothing constructive.
Vote:January 22nd, 2009 at 3:37 pm
# big bruv (2340) Vote: Add rating 4 Subtract rating3 Says:
January 22nd, 2009 at 1:54 pm
“A good start by Neville Key, now he needs to extend that to ALL public sector workers and all pay grades of the public service.
This is the price the public sector should pay for having recession/depression proof tax payer funded jobs.”
In what way are the public service recession/depression proof? If you want them to perform at the levels expected in the private sector why should they be treated any differently? I think the public/private dichotomy is in people’s minds. It’s an illusion. I’ve worked in both sectors.
Vote:January 22nd, 2009 at 3:54 pm
Each time I see this, I think, in this order:
1. Who the fuck is Neville Key?
2. My God, this guy doesn’t even know the name of the PM.
3. John Key = Neville Key = John Neville, who played “The Well-Manicured Man” in the X Files.
By the time all this has run through my head, big bruv’s argument has slipped by me. It is jarring and distracting, unlike “Helen Klark” which one could simply skip over.
Vote:January 22nd, 2009 at 4:27 pm
It is highly inappropriate for the Prime Minister to be writing to an independant authority tasked with setting the remuneration of the Judiciary.
Agree with the broad concept that MPs pay should be set for 3 years- at which point given the electoral checks and balances I’m less inclined to see this as a task for the Remuneration Authority.
I can’t find the link the Key’s actual letter (on a Chinese Windows PC at Beijing Airport) but I wouldbe VERY concerned if the report is correct.
Vote:January 22nd, 2009 at 4:38 pm
Hooray for Johnny! Helen would never have done this.
Vote:But..he needs to go further, its time to start pushing a few needless stuffed public sector suits out the door. How many ‘Communications Managers’ do we the taxpayers need? How many assistants to the Communication Managers do we need? How many consultants/policy analysts to the Ministry of Women’s Affairs, Ministry of Culture and Heritage, Ministry of Social Development, Ministry of Economic Development..etc etc etc do we need? Really?
January 22nd, 2009 at 4:44 pm
Well done John Key. Haha things will be rather grumpy behind the benches for awhile. About bloody time I say. No new range rover next your honour. As for pollies, well minimum wage for starters.
Vote:January 22nd, 2009 at 4:46 pm
Well, we have got monkeys, so paying them peanuts seems justified.
Vote:January 22nd, 2009 at 4:54 pm
Calender girl
Seeing as you asked nicely….yes I am more than happy to stop calling Mr Key “Neville”.
Mind you, his performance so far does remind me of the other great wet appeaser, all I want him to do is remember what bloody party he is supposed to be leading.
Right…….rant over.
Vote:January 22nd, 2009 at 4:56 pm
bharmer
“In what way are the public service recession/depression proof?”
Is that a serious question?
Vote:January 22nd, 2009 at 4:57 pm
MPs aren’t highly paid. A Headmaster of a half decent secondary school gets more than an ordinary MP so does a Colonel equivalent in the military. But I agree with the call at this time. It sends a powerful message right across the industry spectrum.
And for those of you with your heads in the sand about how bad the economy is (going to get) well, you ain’t seen nothing yet.
And yes, the ‘snouters’ will protest. Problem for them is that snouters lost big time on November 6th.
Vote:January 22nd, 2009 at 5:16 pm
Ross
A back bench MP is bloody well paid, many of them could never dream of earning that amount of money in the private sector.
Vote:January 22nd, 2009 at 5:59 pm
*hug* for bharmer
Vote:January 22nd, 2009 at 6:21 pm
Here’s the letter http://www.beehive.govt.nz/sites/all/files/Remuneration2209.doc
Vote:January 22nd, 2009 at 6:56 pm
1. Thanks, Bruv.
2. “A Headmaster of a half decent secondary school gets more than an ordinary MP so does a Colonel equivalent in the military.” I doubt it, Ross – not when you add in the backbench MPs’ tax-free allowances, generous superannuation and various perks. Remember too that a Secondary Principal and a Colonel probably have far greater resonsibilities (but lesser status!) than “an ordinary MP”. When are we going to see the House (Parliamentary Services?) have the courage to express all payments to parliamentarians on an annual “Total Employment Cost” basis? Only then will we poor employers have sufficient transparency to be able to make valid comparisons and judgments.
Vote:January 22nd, 2009 at 6:57 pm
MP’s should be paying us.
Vote:January 22nd, 2009 at 7:59 pm
sorry calendar girl but I think you are wrong. I stand to be corrected but my understanding is that post 1996 MPs salaries were calculated calculated on the TEP (Total Employment Package) principle i.e. including a superannuation component). The perks you refer to are nothing more than you would expect for a senior executive in the private sector. Not defending but that’s the reality. And any school principal worth his/her salt (and I have worked in the sector) probably gets the same and in many cases more. For Colonel equivalents (and I have worked in the sector too) the vast majority of them are in staff jobs pushing pens rather than in command appointments (and that’s not to denegrate but to state the reality. You said they have greater responsibilities. For heavens sake, MPs make the law (hash of it at times) and there is no greater responsibility than thet.
Most MP’s I know (and ok my knowledge is limited to those on the ‘right’) I suspect dropped pay on their election.
Look, it’s easy to slag off at MPs It’s fun. I wouldn’t have their job for quids. Marriage breakups and excessive use of alcohol are all too common. And there is nothing more ‘ex’ than a ex MP … unemployable most of them (read consultants read unemployable).
Having said all of that, John Key’s call was the right one. I agree those on the left (who are probably unemployable anyway) will scream louder than most.
Vote:January 22nd, 2009 at 8:28 pm
This is sheer sophistry and Phil Goff is right. Anyone can make a submission but the commission does not have to take it into account.
The only relevant criteria are the following:
“(1) In determining any remuneration under section 12(1)(a) or section 12B(1) of this Act, or under any other enactment, the Authority shall have regard in particular to the following criteria:
(a) The need to achieve and maintain fair relativity with the levels of remuneration received elsewhere; and
(b) The need to be fair both—
(i) To the persons or group of persons whose remuneration is being determined; and
(ii) To the taxpayer or ratepayer; and
(c) The need to recruit and retain competent persons.
(2) In determining the remuneration of any persons or group of persons pursuant to any subparagraph of section 12(1)(a) of this Act or in determining the remuneration of any persons or group of persons pursuant to section 12B(1) of this Act or under any other Act, the Authority shall take into account—
(a) The requirements of the position concerned; and
(b) The conditions of service enjoyed by the persons whose remuneration is being determined and those enjoyed by the persons or members of the group of persons whose remuneration and conditions of employment are, in the opinion of the Authority, comparable with those of the persons or members of the group of persons whose remuneration is being determined.”
Strong language from the PM in a letter will not do it. If JK is serious he will follow Goff’s suggestion.
Vote:January 22nd, 2009 at 8:40 pm
If JK is serious he won’t follow anything the gibbering Piffle Goof says. No, he will lead.
And I seen plenty of leadership so far.
Which is good. No, excellent.
Vote:January 22nd, 2009 at 8:48 pm
Wow I just read that communist propaganda paper known as the Guardian. Did you know that the arch communist Franklin Roosevelt had 100 days of action after being elected during which he introduced the New Deal? Where have I heard that time period recently? Although I recall that it ended up being 42 days of action and 28 days of holiday.
Have you heard that Barack has frozen higher salaries in the White House? To make sure that you do this over here you have to change the law. Goff has suggested this and will obviously support it. Key seems willing to rely on a letter. Will it work? I doubt it.
If Key is the real thing he will introduce legislation to do so. He will also stop borrowing from progressive campaigns and ideas that have happened in the past. Unless he wants to borrow the feel good ideas but do nothing and hope that people do not notice …
Vote:January 22nd, 2009 at 8:52 pm
This is what Obama is doing
It’s all initiated by CHOGM etc.
Vote:January 22nd, 2009 at 9:27 pm
Ross, I stand by my view that secondary school Principals bear far greater responsibility than backbench MPs. Defence force colonels probably do too, although I take your point about those promoted to staff jobs involving pen-pushing. But why do you seek to compare backbench MPs with senior executives in the private sector?
You’re being very generous in suggesting that backbench MPs make the law (“no greater responsibility than that”). They don’t, largely. More than half of them are MPs on the Opposition benches, and their “law making” is pretty much confined to obeying the party whips and voting predictably against most parts of nearly every Government measure. The rest are the governing party’s / parties’ cannon-fodder for achieving the Executive’s legislative ambitions. Again they obey the whips, but they have minimal influence (even if a little more than their Opposition counterparts).
A secondary Principal, running an institution of 1,500-2,000 students and around 100 staff, has serious executive management responsibilities – accountable to a Board, responsible for staff selection and performance, firmly in the hot seat in respect of accounting, legal, human resources, discipline and reputation issues, as well as responsible overall for developing strategy, marketing plans, timetables and curriculum matrices. Most of all, however, Principals have prime responsibility for the welfare, education and development of our children for some 40 hours per week including extracurricular activities (“no greater responsibility than that” – if I may borrow your unconvincing assertion for more worthy application).
I don’t want to denigrate backbench MPs’ long hours, electorate responsibilities (rather light for the List members), select committee work and relative loss of personal privacy. Marriage break-ups and propensity to alcoholism, however, are not factors that I’m prepared to include as make-weight justifications for very full salary packages. As for lack of employment skills on loss of office, that rather demonstrates my point about their intrinsic (lack of) worth relative to true professionals like secondary Principals.
Finally, Ross, I’m not convinced that you are conversant (I’m certainly not) with the full detail of a backbench MP’s emoluments. For example, is there a daily allowance for attendance in Wellington on sitting days? If so, how much is it, and is it taxable? What’s the level of subsidy on food and refreshments, and is it taxable? Until all such matters – and others that we don’t know about – are wrapped up fairly in a transparent TEC / TEP formula, the public at large will not feel comfortable that they understand a backbench MP’s income. As voters and taxpayers, we are entitled to have that understanding so that we can make valid comparisons with other occupations.
Vote:January 22nd, 2009 at 9:40 pm
calendar girl
Long post.
Do you think that JK should follow Goff’s suggestion and introduce a law change? The Nats have been pretty good at introducing urgent legislation that gets passed quickly. I am sure they could get the appropriate law change through with Labour’s support.
Vote:January 22nd, 2009 at 9:48 pm
mickeysavage – our government does not need Labour. Not for advice. Not for suggestions. Not for legislation. Enjoy the impotence of opposition and let the good elected leaders run the show.
Vote:January 22nd, 2009 at 9:52 pm
Is anyone else amused by Phil Goff insisting we should legislate over an independent body?
Vote:January 22nd, 2009 at 9:52 pm
Getstaffed
Will you apologise in 12 months time if MPs wages go up?
Vote:January 22nd, 2009 at 9:55 pm
Still no talk of dismantling the EFB
Vote:January 22nd, 2009 at 10:18 pm
mickeysavage – if it would make you feel better then sure. i’m a charitable kinda guy. but we still don’t need Labour… and that gives me a spring in my step. every day.
Vote:January 22nd, 2009 at 11:07 pm
Im going against the flow here but if we offer an attractive salary to MP’s we will start attracting decent MP’s,
I realise Keys gesture is symbolic more than anything else and we have a massive envy problem in this country – but we need only 99 MP’s and the need to be of CEO quality. Sorry, but you wont get that for $130k
Vote:January 23rd, 2009 at 1:35 am
I think we need to expand on ‘CEO quality’ versus their salary a little more.
Reading any financial literature of late it’s getting harder and harder to identify such talent with the levels of implosions going on around the world …
Vote:… it’s reasonable to assume a higher salary doesn’t increase the ‘quality’ of decisions made. But at which point the threshold is would be anybody’s guess.
January 23rd, 2009 at 7:49 am
You are citing such a small percentage of senior executives it’s hardly on the scale. there is a bit of a difference between the multi million $ salaried CEO’s you refer –and yes, some of whom have made extremely poor decisions – to the $130k salary in question, that attracts some of the idiots that have been in parliament.
“it’s reasonable to assume a higher salary doesn’t increase the ‘quality’ of decisions made” – well after the last 9 years in NZ its evidence a comparatively ‘lower’ salary certainly does not.
Vote:January 23rd, 2009 at 8:11 am
Personally I would probably be happier if MPs werent paid at all. This would tend to limit the talent pool to those who had proven their ability to make it in the world (or chosen the right parents or lottery numbers) and further limit it to those who wanted to “serve”. You wouldn’t keep out all the control freaks with nothing better to do with their lives but order us around but it would be a start.
I dont see too many CEOs wanting to be MPs and I wouldn’t put most MPs in charge of a corner dairy so I dont know if those pay comparisons are relevant.
Vote:January 23rd, 2009 at 8:32 am
MP’s paying us isn;t going to work, they’d want to raise a tax to do it.
Hands up all those in fovor of another bloody new tax.
Vote:January 23rd, 2009 at 9:04 am
Most MPs entering the house already get a pay rise compared with their former occupation. Raising MP’s salaries will not necessarily increase the “quality” of MPs – these guys are elected not appointed.
Vote:January 23rd, 2009 at 9:14 am
calander girl … good response. We could debate it in detail but I won’t except to say that your quoted principle of a 1500-2000 pupil secondary school receives a salary considerably more than that of a back bench MP (+ perks which probably include a car, club memberships, entertainment allowance and perhaps even a house or housing allowance) and I don’t have too much of a problem with that – for the good ones.
You can see the various determinations regarding MPs pay and allowances on the Parliamentary website – pretty transparent.
But my point simply is that $130,00 for a back bench MP is not a lot of money and I suspect there are many thousands in the public and private sectors who are remunerated at higher levels (a part-time Deputy Mayor in a relatively small District Council can pick up nearly half that alone and what do Deputy Mayors do special?
And I reiterate the point that most of the MPs I am associated with dropped pay to enter Parliament. And yes there are bozzos (and boozers) and unfortunately they make it through the Party selection process helped on the Labour side where Union membership is a substitute for natural talent.
But John Key is certainly right to urge the Remuneration Authority to reflect on the economic times before making its next determination.
As for Phil Goof and his knee jerk response of ‘change the law then’. Sledgehammer to crack a wallnut. Carrot then stick. Sure the Remuneration Authority is ‘independent’ but the legislation it works under is does allow them to take account of the prevailing economic conditions (see clause (1)(b)(ii) – fairness to the taxpayer) … and if they are so dumb as to not to be able to read the tea leaves then they will get what they deserve. DPF’s suggestion is a good start point.
Notice too that Goof failed to say whether he agreed that their salaries should be frozen. Clearly his failure to do so means that he does not … hubris rules ok in Labour.
Vote:January 23rd, 2009 at 9:14 am
Might, though, any of these attempts to influence or interfere with the salary setting processes for the judiciary be “unconstitutional”?!?!
Vote:January 23rd, 2009 at 9:21 am
Patrick Starr,
I disagree. You could double or triple the pay for MP’sm and still get the same Labour drones drawn from the pool of trade unionists who have “served their time” (read: demonstrated true belief in the socialist dogma) and marginal academics most of whom have made their mark through one of the academic/teacher’s unions or a radical branch of the Party. From the Greens, you will get no changes, from National, I suspect you would get little change as most are taking pay cuts to be their so money is not the prime motivator, Act ould deliver the same faces and teh Maori Party, being all about history, grievance and warm fuzzies wouldn’t attract any different faces. Jimbo would still be there ‘cos he doesn’t know anything different and Winston will still be GONE …. Yay for that.
the fact is that in most cases the candidate selection process is not designed to let through the best potential law makers and goverment administrators, it has objectives far simpler. That is to present the party’s philosophy and reward commitment to the cause.
Now looking at MP’s themselves, this is where you have some potential to let the cream rise. Key, it would appear, is prepared to do that with some of his cabinet posts (think Bennet, Joyce). Indeed I would posit that there is more chance of quality being recognised on the right (and with it more chance for personal expression) than on the left where ideology and commitment to the agenda seems to take priority.
So, what is the answer? Abolish MP’s salaries and make the positions true “public service” roles. Meet expenses by all means but make it the responsibility of parties to pay their representatives what they are really worth. Forget all the bullshit about policies for sale and the other smokescreens behind which the public funding for parties, politicians and electoral campaigns hide. Give the power to the people – we will soon see who is trying it on and who does not deserve our support and we will decide who is worthy of their pay.
end of rant
Just my 2cents worth.
Vote:January 23rd, 2009 at 9:40 am
Good point Greg, who on earth would pay $130,000 a year to the likes of; Dale Jones, Barbara Stewart, Ruth Dyson, Lesley Soper etc..
Vote:January 23rd, 2009 at 9:44 am
Kiwigreg, as you might gather, I concur ! sorry I missed your post – should have acknowledged earlier.
Vote:January 23rd, 2009 at 9:49 am
Brilliant!..the PSA have laid down a challenge that Key would be foolish to ignore.
“Public Service Association national secretary Brenda Pilott warned if civil servants were denied pay increases, there could be an exodus from the sector”
Deny them John, deny them for all you are worth, the PSA are giving you the chance to cut the public sector without having to come across as the bad guy.
Vote:January 23rd, 2009 at 9:51 am
More music to my ears
“Public servants face pay freeze”
http://www.stuff.co.nz/4826953a6160.html
Freeze the bastards Mr Key, freeze them until the private sector recovers.
Vote:January 23rd, 2009 at 10:20 am
From the Dim Post:
Vote:January 23rd, 2009 at 10:39 am
I think we are all too late to join that game stephen.
Key is holding a straight flush and she is bidding him up while holding three fifths of a straight 10 high. Cards are all face up too.
what a numpty
Vote:January 23rd, 2009 at 10:43 am
Is Brenda Pilott undergoing a brain explosion? Please, please Brenda do the country a favor and ask for a twenty percent increase in pay this year, you deserve it, go on, I dare you.
Vote:January 23rd, 2009 at 10:46 am
Maybe they will go on strike?
Gosh how would I get through my day.
Vote:January 23rd, 2009 at 10:50 am
I thought PSA members weren’t allowed to go on strike..?
Vote:January 23rd, 2009 at 11:58 am
“Public Service Association national secretary Brenda Pilott warned if civil servants were denied pay increases, there could be an exodus from the sector”
An exodus to where? The Private sector is cutting back jobs here and overseas. So where will all these outraged civil servants go?
Vote:Perhaps they will go forth into the desert lead by Brenda Pilott with a staff and cloak to seek the promised land and they shall wander for 40 years…
January 23rd, 2009 at 12:13 pm
Damn good question.
Vote:January 23rd, 2009 at 12:35 pm
Is Brenda Pilott part of the planet or which part of her medication has she stopped taking?
Vote:January 23rd, 2009 at 12:52 pm
KiwiGreg
“I dont see too many CEOs wanting to be MPs”
I said of ‘CEO quality’ – and to answer your statement anyway- why would they take such a pay drop?
“these guys are elected not appointed.” – really – have you heard of MMP?
David
“You could double or triple the pay for MP’sm and still get the same Labour drones drawn from the pool of trade unionists”
I’m not just talking Labour but maybe no one of better quality is stepping forward for that kind of money.
I don’t set the salaries of positions I have available by the quality of the applicants. I set it for the quality of applicants I want to attract, and what they’re expected to achieve
Vote:January 23rd, 2009 at 2:24 pm
Ross, we’re not far apart on any of the views expressed in your post this morning. My main point was to emphasise the importance and worth of Principals of larger secondary schools. (No, I don’t have a vested interest, other than in the education of our young ones.)
I don’t know whether MPs generally are paid too much or too little. That’s a fairly subjective matter. But the uniformity of salaries for different types of MP is patently daft. For example, the Minister of Finance on the same salary as the Minister of Internal Affairs. And a List MP on the same salary as a constituency MP (despite differences in their allowances). In my view, the whole MP remuneration structure requires a serious overhaul against a list of meaningful responsibility and performance criteria.
mickeysavage: apologies for my delay in responding to your query – I wasn’t trying to duck it! You may take it from my comments in the previous paragraph that my answer is “No” to the suggested legislation. Apart from an aversion to ad hoc legislation at the best of times, I’m not a great believer in artificial wage, salary or price controls in most situations. But in this instance I think that leadership is important, including the sending of messages such as the one Key seems to be conveying. Most of the country still has no idea what is coming down the track in terms of widespread economic difficulties, and leaders everywhere need to use every opportunity to prepare their people for what’s in store.
Vote:January 23rd, 2009 at 3:17 pm
calendar girl … thank you again for that considered response. The HSC does recognise, to a degree, differing levels of responsibility in MPs. For the Executive and Ministers inside Cabinet receive about $40k more than Ministers outside cabinet and your quoted examples of the Minister of Finance and Minister of Internal Affairs just happen (this time and by happenstance) to be Ministers inside and outside Cabinet. So it is with Electorate vs List MPs and while they receive then same base pay the Electorate MP picks up more in allowances and staff support recognising the extra work that falls to that person.
There was a time when MPs set their own salaries (normally five minutes before the House rose at nights and without great debate). As a nod to the great unwashed (us) the actual salary was quite low but to make up for it they front loaded allowances and perks. Much of that changed post 1996 and I wouldnt like to see any sort of return to the bad old days.
Vote: