Key outstrips peers on salary-to-GDP comparison

John Key. Photo / Dean Purcell

Prime Minister John Key is one of the developed world's best-paid leaders - relative to the strength of our economy - according to analysis by the Economist magazine which ignores perks such as taxpayer-funded private travel and airpoints.

The Economist ranked 22 countries' leaders according to how their basic salary compared to their nation's gross domestic product (GDP) per person.

Mr Key's basic salary of $393,000 or US$272,280 when the Economist prepared its data, was almost 10 times New Zealand's GDP per person, putting him in sixth place.

Kenya's Prime Minister Raila Odinga topped the list easily, even after rejecting a 25 per cent pay increase that would have taken his salary to US$427,886, or 240 times his country's GDP per person.

Still, by the Economist's measure, Mr Key was better paid than France's Prime Minister Francois Fillon, US President Barack Obama, Japan's Naoto Kan, Germany's Angela Merkel, Australia's Julia Gillard, and Britain's David Cameron.

However, the Economist's analysis does not factor in other allowances and entitlements enjoyed by politicians which make their overall remuneration packages much higher.

Last week a report recommended removing New Zealand MPs' international travel perk, which gives them and their spouse up to a 90 per cent subsidy on private trips. The report recommended MPs receive a 10 per cent increase in their basic salary as compensation for the loss of the perk.

The report ignored the long-standing and vexed issue around airpoints MPs accrued as a result of their taxpayer-funded travel.

Airpoints are earned by the person named on the ticket, regardless of who pays for the flight, and it has been estimated the average MP earned enough of them during a three-year term in Parliament to pay for trip to Europe.

While there are guidelines for public servants around airpoints which say they should be used only to purchase travel for official business, there are none for MPs who generally travel much more.

MPs are encouraged to use airpoints earned on taxpayer-funded flights to offset the cost of other official trips but due to the nature of airpoints schemes it is impossible to monitor how MPs use them.

It was for that reason that rules - stating that MPs should surrender their airpoints when they left Parliament - were dropped in 2006.