Govt's bill backs refusal of pay rises

The Government intends changing the law to stop the Remuneration Authority giving pay rises to people who don't want them.

Prime Minister John Key is said to be "disappointed" by the authority's decision to give Governor-General Anand Satyanand a pay increase after he wrote to it in January saying he didn't want one because of tough economic times.

Nevertheless, it was confirmed yesterday and he said he would channel it back into the Crown's account.

A spokeswoman for Mr Key said the Prime Minister believed the authority had enough flexibility to exercise restraint.

It could consider submissions - which the Governor-General made - and its criteria said it should be fair to taxpayers as well as the person involved.

"He still believes that is the case but in light of what has just happened he has asked for advice, and has received preliminary advice, on changing the legislation to make it crystal clear that when people don't want a pay rise, they don't have to get one," the spokeswoman said.

A statement issued by the Governor-General's office said he was not questioning how the authority reached its determination, and he accepted the outcome.

"In light of his wish to receive no salary increase, however, he has decided to return the amount of the increase to the Crown accounts."

His salary before the rise was $187,000, tax-free.

MPs also unanimously passed a motion last month asking that they not get a pay rise this year due to the tough economic times.

The Remuneration Authority, which sets the pay of MPs, the Governor-General, judges and councillors, last month wrote to councils seeking submissions on a proposed pay rise which would kick in on July 1.

- NZPA