The independent body tasked with setting MPs’ pay is just weeks away from deciding if politicians will get a pay raise.
Video / NZHerald
The independent body tasked with setting MPs’ pay is just weeks away from deciding if politicians will get a pay raise for the first time in more than half a decade.
The Prime Minister won’t say if he thinks MPs should receive a pay rise: “Those are decisions for the independent Remuneration Authority, and it would be inappropriate for the Prime Minister to comment”.
Labour leader Chris Hipkins issued a similar statement, saying it’s important the authority maintains its independence, so it can complete the work required of it by law.
But while noting the authority’s independence, the Greens co-leadership said the prospect of MPs receiving a pay rise at a time so many households are enduring financial strain will be a “bitter pill to swallow for many”.
Despite this, it’s understood some MPs are not unsympathetic to the idea of a pay rise.
That’s because it’s been six and a half years since they last received a bump in their pay packet.
Prime Minister Christopher Luxon and labour leader Chris Hipkins both say the matter of MP pay increases is up to the independent Remuneration Authority. Photo / Mark Mitchell
According to New Zealand law, MPs’ pay is set by the politically independent Remuneration Authority and reassessed after every election.
The recommendation came at time of widespread teacher and nurses strikes across the country.
“It does not sit well with me or this Government that ... we have increases that are out of kilter with what the average New Zealander is seeing,” Ardern said at the time.
A spokesman for the Remuneration Authority said it implemented a zero increase from July 1, 2019 until after the election in October 2020.
But when it did that review after the 2020 election, Covid was in full flight, so it put out a three-year determination for MPs’ pay with zero increases again.
Now it’s back on the agenda.
However, it appears a decision on MPs’ pay will not have a retrospective element.
“We are doing a ‘green-fields’ review; that is we are not looking backwards six and a half years and trying to recoup what was lost through the various pay freezes,” a Remuneration spokesman said.
“We are starting again and investigating what fair relativity is at this time for MPs pay – that is effectively what the law requires us to do.”
There’s a sliding pay scale for MPs. The Prime Minister receives $471,049 a year (plus perks), Cabinet Ministers and the Leader of the Opposition get $296,007 and non-executive MPs – those without leadership positions within their party or on select committees – get $163,961 a year.
The average annual wage in New Zealand is closer to $70,000 a year.
Bryce Edwards said the MP pay question brings into focus the issue of politicians’ pay in general.
“In the past, the average backbench MP received a pay that was roughly in line with a senior secondary school teacher; these days it’s roughly double that.”
“If the way our representatives live and the incomes they’re used to are so out of sync with wider society, it will make people wonder whether they are representatives or part of a distanced elite.”
The Green co-leaders agree.
“We’ve seen a massive divergence in the last 40 years as teachers have been forced to negotiate their pay every other year as the power of unions has been intentionally and systematically undercut, while MPs salaries are set by an independent authority. This tells us all we need to know about the need to change the system to a far fairer one,” they say.
The Remuneration Authority says it will make its decision on MPs pay, and recommend it to the Prime Minister in late April.
