MPs pay

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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