MPs pay rise tomorrow

December 19th, 2012 at 12:00 pm by David Farrar

Tracy Watkins at Stuff reports:

MPs are in line for a Christmas bonus of several thousand dollars.

The Remuneration Authority confirmed today it expected to issue its annual review of MP salaries on Thursday – backdated to July 1, meaning they are in line for backpay as well.

Based on a pay rise in the order of 1.5 per cent, that could be $6000 plus for Prime Minister John Key, while a back bencher will get an extra $2000-plus a year.

But MPs could also be in line for an adjustment worth a couple of thousand dollars more, based on changes to their international travel discount which was estimated to have left them about $9000 a year worse off.

The Remuneration Authority has already adjusted their pay by $5000 and $2000 over the last two pay rounds and is likely to top up pay packets further in its determination on Thursday.

Remuneration Authority chief executive John Errington said he could not discuss details till the determination was gazetted.

But when asked if the payrise was likely to be in the order of last year’s rise of 1.5 per cent he confirmed that was likely.

The annual pay rise is always controversial and likely to attract stiff criticism again this year after  pre-Christmas news that motorists will be stung by a hike in petrol taxes by 9c a litre over the next three years.

I have advocated for many years a win-win solution to this issue. Rather than have annual pay adjustments, the law should require the Remuneration Authority to set salaries and allowances for MPs for an entire term of Parliament, every three years  before the election. This means that no MP gets a payrise during their term, and people stand for Parliament knowing exactly how much the salary will be for that Parliament. It doesn’t mean MPs get paid less overall, but it does mean you avoid this annual masochistic exercise. Rather than say an annual 1.5% increase, you may just have the salary for one term of Parliament set 4.5% higher than the previous term.

The Govt Admin Select Committee has yet to report back on a bill, which may make that change. Hopefully the inevitable outcry tomorrow will convince MPs of the merits of making a change.

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20 Responses to “MPs pay rise tomorrow”

  1. wreck1080 (4,001 comments) says:

    Interesting how it is timed with the petrol tax increase.

    And why is it the politicians are automatically given pay rises? This does not occur in many jobs.

    [DPF: It is not automatic per se. The review is automatic, but not the outcome.]

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  2. Viking2 (11,686 comments) says:

    Surely it should be performance based?

    List any MP’s that have done anything remarkable beyond what would be expected of an MP that has made a difference to peoples lives and to the success of NZ Inc.

    actually can’t think of anything but changing the right hand rule to reflect the common sense the old rule was.

    Not lot for a huge amount of salary and perks.

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  3. Longknives (4,970 comments) says:

    Well isn’t that lovely! Everyone else is expected to tighten their belts in these troubled times….

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  4. tristanb (1,127 comments) says:

    I think it should be based on supply and demand. Obviously there’s no shortage of people wanting to be MPs (look at a party’s list). So we should not be increasing their salary, we should let the market decide.

    By increasing the salary, you just increase the attraction for bludgers and parasites.

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  5. BlairM (2,340 comments) says:

    My view is that it should either be:

    1) Pegged to the median wage (which would have a sobering effect on policy I am sure); or
    2) Determined by referendum every election. People either write in a salary, or tick a salary range, and the average of all the votes is what MPs should get paid.

    At the very least I agree with DPF – it should be set for a full term and not changed during a term, as the 27th Amendment requires of the US Congress.

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  6. thor42 (971 comments) says:

    I remember someone somewhere suggesting that MPs salary be pegged to the *minimum* wage (“x” times the minimum wage).
    If that were done, then if MPs wanted an increase, they’d have to increase the minimum wage.
    This suggestion beats the CRAP out of the current system.
    At least it would mean that a LOT of people would gain from MPs greediness.

    Anyway, I agree that MPs salaries should not be increased during the term.
    The US did a really good thing putting that in the 27th Amendment.

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  7. Rex Widerstrom (5,013 comments) says:

    I’d endorse the suggestions of everyone above as being excellent alternatives to the present system, but particularly Blair’s suggestion of a referendum every election. They work for us (despite many seemingly working against us) after all, and in what other job does your boss not set your wages?

    Or better yet, we could index it to benefits. Not pay them the same – after all (with exceptions such as Rajen and William and Kanwal) they do work. But if it’s good enough for beneficiaries to be told “This is other people’s money, and you receive a sufficient quantity of it to live on” then surely the same message should be given to MPs? If on the other hand they perform so well that the entire economy lifts and we’re able to help our most needy, they automatically reap the same benefit they have bestowed on others.

    Or index it to pensions. If my parents can face rising costs with minimal increases in income, I’m sure the likes of those mentioned above, and other nonentities, could so so as well.

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  8. dime (10,223 comments) says:

    i just hope this means jacinda can finally afford a house in aucklands most exclusive suburb…

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  9. thor42 (971 comments) says:

    Expanding on this a bit – over on the “Not PC” blog, I suggested that the Libertarianz Party could look at having a “clean up Parliament” policy package. Something like this –

    * Remuneration Authority to be axed.

    * MPs salaries to be fixed at “x” times the minimum wage (“x” to be determined).

    * Pledge to axe the gold-plated super scheme. If it can be voted in, it can be voted OUT.

    * Pledge to open Parliamentary Services to the Official Information Act.

    * Pledge to axe the free travel perk for MPs.

    * Pledge to axe any other MPs perks not listed here. MPs get paid enough to pay for everything THEMSELVES.

    * Look at setting up an Independent Commission Against Corruption (as I believe Australia has).

    I think that if they focused on these policies, they would get *at least* another 20,000 votes, and probably many more.
    People have had a gutsful of the self-serving behaviour of MPs, helped along by the Remuneration Authority.

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  10. Lee C (2,720 comments) says:

    “The Supreme Court has ruled that they cannot have a nativity scene in [Wellington, D.C]. This wasn’t for any religious reasons. They couldn’t find three wise men and a virgin. (adapted from Jay Leno)

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  11. alex (304 comments) says:

    The problem with MPs getting to vote on whether or not they get pay rises is that generally they live in a bubble. Their colleagues are all MPs, politicos, lawyers, economists and journalists, hardly the types of jobs that most New Zealanders do. Spend too long in the bubble and it is impossible to understand what being told to tighten your belt really feels like.

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  12. Pauleastbay (5,035 comments) says:

    I don’t believe there has ever been a year when the poor bastards havn’t “reluctantly” accepted the pay rise that they themseves didn’t really want but was forced upon them by the Authority. Wankers!

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  13. BeaB (2,165 comments) says:

    Whinge whinge.

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  14. BeaB (2,165 comments) says:

    LeeC
    That’s older than I am!

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  15. Dave Stringer (190 comments) says:

    adopt the 27th amendment as a local law – YES!

    and add to it another that states than no MP who votes for a deficit budget can be elected for a further term, that should make some ‘HARD POLITICALLY’ decisions easier to make :-)

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  16. Tookinator (222 comments) says:

    Shouldn’t they be subject to the 90 day employment rule. I.e. Us, (The employers) can terminate their employment as an MP if they haven’t done anything useful in their first 90 days of employment.
    Would be an interesting survey to find out how many MP’s we would presently have if that system was upheld

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  17. Nigel Kearney (1,102 comments) says:

    This minimum wage thing I don’t understand at all. Driving low paid people off work into welfare does not merit a pay rise. If there was to be a wage related calculation, it should be pegged to total wages divided by total adult population (working or not). That way, getting people into jobs would be rewarded.

    >Pledge to axe the free travel perk for MPs

    This has been repeated countless times but is still as bullshitical as the first time. The remuneration authority determines a rate based on the marketplace, subtracts the value of things like perks, then sets salaries based on the difference. If MPs use perks their salary will be lower. If they stop using them, they get a (backdated) pay rise, which is exactly what happened. The effect on the taxpayer is nil. Use of the perk is effectively paid for by other MPs.

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  18. Steve (North Shore) (4,538 comments) says:

    List MPs deserve no increase. Actually they should be on half of the Electorate MPs salary. List MPs do not represent anyone other than the Party, and they do sweet fuck all.
    When did you last have contact from a list MP v an Electorate MP?

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  19. sparky (235 comments) says:

    Steve (North Shore). I agree with you 100%

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  20. mikenmild (12,460 comments) says:

    Remuneration for MPs should be set on the three-year cycle suggested. It does help to have a level of remuneration set by an independent authority, as I’m not sure that any linking mechanism – to median wages or pensions, etc – would provide a salary in the right range ie, not so miserly that only those of independent means can afford to be MPs and not so high that it is seen as a gigantic rip off.

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