MPs pay

September 15th, 2009 at 10:00 am by David Farrar

The Dom Post reports:

More than six months after complaining about the Remuneration Authority not paying enough regard to the recession when setting pay for MPs, judges, the governor-general, mayors, councillors and others, the Government has written a law to make it comply.

A bill from Labour Minister Kate Wilkinson will require it to take account of prevailing economic circumstances when setting pay, drawing on independent advice such as Treasury forecasts. The authority would retain discretion to award no rise or reduce increases that would otherwise have been awarded.

That is sensible as far as it goes, but assuming it goes to a select committee (as it should) I will put in a submission advocating a further change.

I strongly believe we should do what they do in the US, and make it illegal for MPs to get a pay rise during their term of Parliament. Instead the Remuneration Authority should revise the pay levels for MPs every three years, with them to take effect after each election.

It would massively reduce cynicism against annual increases for MPs, for which the MPs always get blamed. It would mean you stand for, and get elected to Parliament, knowing exactly what the salary will be for the next three years.

In previous decades with high inflation, you couldn’t do this so easily. But with relatively low inflation, a salary adjustment every three years is fine. It means perhaps a 10% adjustment every three years instead of 3% annually. Some might say what is the difference. They key thing is you have to get re-elected by the people to get the new salary level. It removes the perception (however incorrect) of voting oneself pay rises on the job.

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10 Responses to “MPs pay”

  1. philu (13,393 comments) says:

    shit dpf..!..i agree with you..

    (are these the end-times..?..)

    phil(whoar.co.nz)

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  2. freedom101 (439 comments) says:

    No adjustment for inflation over three years provides an incentive to keep it under control!

    I’d also set MP salaries at a percentage of the average full time *after tax* income.

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  3. homepaddock (429 comments) says:

    Brilliant suggestion, should apply to cocal body politicians too.

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  4. Graeme Edgeler (3,216 comments) says:

    If it could be arranged that the decisions were always made before they were to take effect, so that there weren’t always substantial back-dated payments, that would be good too.

    [DPF: Absolutely. I would see the RA setting in around June of an election year, the salaries to apply from after the election in (usually) november]

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  5. big bruv (12,348 comments) says:

    Great idea DPF, but do you really think this bunch of self serving MP’s and their unbelievable sense of entitlement (English asking for another $20 per week to pay a cleaner when his bloody wife should be doing the job) are going to pass the bill?

    I would hope that your submission is taken on board and I would hope that it is voted into law but I simply cannot see it happening.

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  6. Graeme Edgeler (3,216 comments) says:

    I strongly believe we should do what they do in the US, and make it illegal for MPs to get a pay rise during their term of Parliament. Instead the Remuneration Authority should revise the pay levels for MPs every three years, with them to take effect after each election.

    I would also note that your understanding of the US system is mistaken. The Twenty-seventh amendment stops any law affecting the salaries of senators and representatives taking effect until the holding of an election. However, it has been held not to impede the cost-of-living adjustments (which are basically inflation-indexed pay rises) they receive annually.

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  7. RKBee (1,344 comments) says:

    The saying you pay peanuts you get monkeys comes to mind…
    But I would have to agree we have been paying these monkeys caviar for far to long…
    Economically speaking im of the view we would be better of paying a small group of highly qualified executives to run the country paid on performance.
    But I doubt if we would have any social services left.
    So I guess setting their pay levels based on economic circumstances is the best we can do for these monkey’s under the current circumstances. But don’t forget MPs, judges, the governor-general, mayors, councillors and others can also decline the annual Remuneration Authority pay rises in light of the countries economic circumstances.

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  8. Johnboy (13,386 comments) says:

    Going by the bloody tax I have to pay I think I’m paying for all of Gerry’s caviar ration! Time you other bastards helped me out.

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  9. Tom Semmens (79 comments) says:

    This may surprise you lot, but I believe MP’s pay should be set as a percentage of the average wage of about $46,000 – say, no more than three times that. That way, if they want a pay rise – they have to make sure everyone’s wages rises.

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  10. kaya (1,360 comments) says:

    Motion passed!!

    Wow, a thread where everyone agrees including Phil!! Strange days indeed!

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