MPs pay should be constant for the term

December 27th, 2010 at 3:00 pm by David Farrar

Kate Chapman at the Dom Post reports:

Prime Minister John Key urged restraint over the setting of politicians’ pay this year but most MPs seem resigned to the boost in their salaries which, they are quick to point out, was decided independently.

Mr Key was consulted by the Remuneration Authority – the independent body that sets politicians’ pay – and said given the circumstances restraint should be shown.

“He argued there should be a nil increase for MPs, or if there was any increase, it should be in the band of other public-sector pay settlements,” a spokesman for Mr Key said.

The authority decided on a 1.4 per cent rise backdated to July and a one-off payment of $2000 to cover the decreased use of MPs’ travel subsidy. The rise boosts Mr Key’s salary to $400,500 and a backbencher’s to $134,800.

Every year the MPs go through a self-flaggelation when the Remuneration Authority does their annual pay adjustment for MPs. It is either too much, or it is at the wrong time, or it is backdated etc etc.

This will always be the case, as MPs getting pay rises during  term of Parliament never will be popular.

The easy way to solve this, is what I have long advocated - set the salary and associated terms around three months before each election, for the next term of Parliament.

So MPs would get elected to Parliament for a term, on a known salary which remains constant during that term.

This might not have been possible in the days of high inflation, but one could do it easily and the adjustment from term to term would still be a fairly modest single digit percentage.

You don’t even need to change the law to do this. The Remuneration Authority Act says that the maximum gap between adjustments is three years, so it would just take the leadership in Parliament to ask the Authority to move to setting as constant for each term of Parliament.

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16 Responses to “MPs pay should be constant for the term”

  1. jaba (2,069 comments) says:

    all positions should be given a “rate” and increased by the rate of inflation each year .. every 5 years or so, a review should be done to try and match their pay with the private sector. The issue there of course is that the PM will increased to a $mil plus and that would cause an uproar.

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  2. MT_Tinman (2,795 comments) says:

    I don’t disagree with pollies being paid what they’re worth but we’d never get anyone if they had to pay to hold the job ;-)

    I do agree the contract should run until the next election (for all pollies, local and national) and suggest taking a lower level of remuneration should be allowed to be part of electioneering as long as that promise is written in concrete.

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  3. jaba (2,069 comments) says:

    I’m still spewing that some of the so called “Super City” councillors started to demand big pay rises as soon as they were elected

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  4. BlairM (2,266 comments) says:

    Like I said on the other post, make each candidate set their own individual salary before the election. Then it can be a factor in the election as to whether a candidate gets the votes or not.

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  5. grumpyoldhori (2,410 comments) says:

    Remuneration Authority, totally independent are they ? they do not get a wad of taxpayers money each year ?
    And politicians have nothing to do with what the peasants pay in income tax.
    yeah, right.

    Good to see Corporal Apiata VC and the two who won the GC will not be getting a fat government pension or trips to Europe when they choose at taxpayer expense, after all what did they do compared with self serving politicians ?

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  6. reid (15,604 comments) says:

    We should pay each MP according to a personal stock indexed at ipredict. If the nation as a whole as expressed through the ipredict collective mind thought the particular MP wasn’t doing very well at all, their salary would drop accordingly or vice versa as the case may be.

    Yes this would disadvantage politicians with constituents too thick or poor to have yet become internet-capable at home, but who cares about them, anyway?

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  7. Manolo (12,643 comments) says:

    Yes this would disadvantage politicians with constituents too thick or poor to have yet become internet-capable at home, but who cares about them, anyway?

    If you mean Labour and racist Maori Party voters, yes by all means. :-)

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  8. reid (15,604 comments) says:

    “…but who cares about them, anyway?”

    Well, I really really really do care about them, vewy deeply indeed. What I’d offer them is a free laptop and free connection to ultra-broadband, but they’d only get it if they voted National.

    Their choice.

    Of course Liarbore doesn’t get a chance because it has to cost its policy at the local Noel-Lemming store whereas we (wink) get to price ours on govt discounts. Isn’t that a shame, but not for us.

    I’ve been watching lots of Dr Evil over the hols, in case you’re wondering.

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  9. wreck1080 (3,533 comments) says:

    The renumeration authority is setup to so the politicians can say ‘wasn’t me ‘ to their constant pay rises regardless of economic times.

    Seems a bit rich to me that the MP’s can get such pay rises when many those who pay taxes are suffering tremendously.

    It is not just MP’s either, the heads of the biggest companies are receiving salaries at ever increasing multiples of the lowest paid company employees. The fact is, the bosses have control over salaries, whereas the employees do not – which is precisely why management salaries sky rocket while non-management remain static.

    However, at some stage there will be a tipping point, where people will simply not tolerate these excesses. I’m not jealous, but I think the system has become too heavily waited to those at the top.

    My rant done!!

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  10. reid (15,604 comments) says:

    “…the system has become too heavily weighted to those at the top.”

    Nah, for the power and responsibility they wield, Ministers of the Crown are way underpaid. However, many of them (but not all of them all the time thank goodness) are, in fact, monkeys. As in: “pay peanuts…”

    So what should we do?

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  11. Guy Fawkes (702 comments) says:

    That might make the former Minister of Buyable Quotas think twice unless he got into a position of power that was easy to abuse again.

    Labour seem to keep Immigration as their cash cow. Guess that leaves the back handers from the racing Industry.

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  12. MIKMS (163 comments) says:

    @grumpyoldhori

    I think it is worth pointing out Corporal Apiata got something quite alot, at least 200k up to the millions- also considering he was the first of the New Zealand Variant it is almost priceless, he definitely has not been left out in the cold. GCs also go upwards of 5k to the 6 digits on some rare occasions. I also understand he gets up to 3k a year for holding the award dependent on inflation (set in 2005 at $1700) , personally I think he’d deserve comparable renumeration with anything that our MPs get! If not more so!.

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  13. kaya (1,360 comments) says:

    Index link it to inflation or whatever system is used to adjust pensions and benefits. Sauce for the goose etc.

    The remuneration authority is an expensive joke, only there to deflect criticism from the politicians.
    Getting rid of it is one way to start reducing our 300 million dollar a week borrowing.

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  14. backster (2,000 comments) says:

    Kaya…….I agree.

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  15. burt (7,096 comments) says:

    I don’t really care what they get paid but what I find alarming is that during the tyrannous reign of Klark & Kullen the MPs got circa 9% every year while most workers had to fight hard for 1%-3%. Of course the lovers of corrupt self serving govt now blame National for our low wage economy having sat quietly when their deal leader was doubling her pay over 9 years.

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  16. supersimmo (1 comment) says:

    The issue as ever is going to be the increases on a tri-yearly basis. The screams are very loud now from the media and vice-a-viz the leftist controllers and that is annual adjustments. The increases will be much larger and the screams will be even harder to ignore.

    I totally agree that tri-yearly is a good option but how to implement without the backlash?

    My most preferred option would be a substantially lower base (reviewed triennially) with significant performance pay component based around key metrics that are visible to the public and reviewed by the rem authority. Let’s have the parliamentarians leading by example which hopefully will lend credence to doing the same (ie performance component) for teachers!

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