Bill limits MPs' pay rises

The Government has unveiled a law telling the body that gives MPs pay rises to consider economic conditions when it makes decisions.

The Remuneration Authority is responsible for determining salaries and allowances for MPs, the judiciary, other statutory positions and mayors and local authority representatives.

Labour Minister Kate Wilkinson said MPs and the Governor-General were willing to forgo a pay rise this year, but that the authority said it could not take account of the recession in its decision.

The Remuneration Authority Amendment Bill would allow it to balance wage rises against the economic conditions of the day.

Governor-General Sir Anand Satyanand wrote to the authority in January, saying he did not want a pay rise but still got it.

He said he would pay the money back into the Crown's account.

The following month, MPs unanimously passed a motion asking that they not get a pay rise this year because of the tough economic times.

Prime Minister John Key said at the time that the Government would change the law, so the authority did not give pay rises to those who did not want them.

Mr Key also wrote to the authority asking it to show restraint.

The authority's annual report referred to the letter and said it considered economic conditions and the views of office holders, but said it was still concerned about low pay rises.

The annual report said the 2008 increase of between 3.8 per cent and 4.8 per cent for MPs was lower than salary movements in senior state sector positions in the previous year.

- NZPA