MPs’ pay rise pared back

Prime Minister John Key has announced an overhaul of the Remuneration Authority Act, tying MP salaries to those of the wider public sector, which will be passed under urgency.

Mr Key says the decision was made after the Remuneration Authority’s latest determination which saw the total remuneration received by MPs increased by about 3.5 per cent.

“That increase was neither necessary nor justified at a time when inflation is at 0.8 per cent,” says Mr Key.

“While the decision was made independently of MPs, they should not be receiving increases which are disproportionate to the wider public sector.”

Mr Key says the Remuneration Authority referred specifically to the criteria contained in the Remuneration Authority Act 1977 as the reason for the increases, therefore a law change was necessary.

The change will take away the Authority’s discretion when setting MP pay. The sole criteria will now be the average public sector pay increase for the previous year.

Mr Key says the decision to remove the Authority’s discretion was not taken lightly, given that it changed a practice going back several decades.

“However, it is clear that changing the criteria upon which that rate is set is the only way to ensure the Authority will start handing down more modest pay increases.”

The new legislation will be backdated to 1 July 2014, meaning the pay increase outlined in the latest determination will not be awarded.

Based on the most recent data, total remuneration will instead increase by something in the range of 1 – 2 per cent, reflecting average wage growth in the public sector.

Ministers anticipate more detailed advice from officials on the measure to be used, which will be set out in the legislation, likely to be introduced in the next sitting session.

There is always an uproar when MPs’ pay rises are announced but feelings were stronger about last week’s announcement when inflation is so low.

Continuing to say it was out of their hands was an untenable position for MPs when they had the power to change the legislation.

Acting to reduce the current pay rise is a good move but it would be better if changes to the legislation weren’t  done under urgency to allow public submissions.


29 Responses to MPs’ pay rise pared back

  1. Andrei says:

    Good to see John Key’s back on form – he has been erratic a few times recent days but this is an example of why he is New Zealand’s Prime Minister and has no rival as of 03/03/2015


  2. Andrei says:

    And example of how to show the New Zealand public of why you are not ready for prime time: Open mouth, put foot firmly in it


  3. Andrei says:

    And example of how to show the New Zealand public of why you are not ready for prime time: Open mouth, put foot firmly in it


  4. TraceyS says:

    Andrew Little supports tying MP pay increases to average public service sector pay increases from the previous year. He also said on Breakfast this morning that he thinks when the economy is doing well then that justifies a bigger pay increase for public servants. He therefore is supporting a growing economy as a criterion for MP pay increases.

    How many New Zealanders will support MPs automatically gaining a percentage pay increase on the back of private effort? Not many I think.

    Little provided a superb justification for decoupling upcoming public sector pay negotiation arguments from the country’s economic success factors. We want MPs to work for their future increases – not gain them parasitically.


  5. TraceyS says:

    It is quite ironic that when MP pay increases become tied to average public sector increases the public sector unions will effectively be advocating for MPs as well as their fee-paying union members.

    I would like to think that this might encourage innovation in remuneration structures – away from across-the-board percentage increase for everyone (even those who are underperforming or on disciplinary action) towards structures that remunerate for performance and competence while keeping the overall percentage remuneration increase low.

    This would be to the benefit of everyone.


  6. RBG says:

    ‘but it would be better if changes to the legislation weren’t done under urgency to allow public submissions’ EXCUSE ME! The National government has passed SO many bills under urgency. Back in 2011 Chen Palmer reported that urgency had been used in 70 bills, with 20 not being referred to select committee. They said this government used urgency often to fast track the passage of bills “even when there is no crisis.” Late last year the NZ Law Society, the Human Right’s Commissioner and the Privacy Commissioner all expressed concern over the haste with which the Key government pushed through the Countering Terrorist fighters bill. Incredibly hypocritical of you, Homepaddock, to express concern about the lack of public submissions on this legislation, when you have ignored the many other times this government has done the same thing.


  7. TraceyS says:

    How dare Homepaddock have an opinion eh, RBG?

    What a stunningly hypocritical comment…to criticise the mere expression of an opinion when presumably you agree with it in substance!

    Really, truly, unbelievable!


  8. RBG says:

    No TraceyS, I did not object to Homepaddock expressing an opinion. So many bills passed under urgency by this government, yet this is the first time I’ve seen Homepaddock express concern about the process. Not sure how my pointing that out is ‘stunningly hypocritical’, but then I do often have trouble understanding how you come to your conclusions.


  9. Andrei says:

    Helen Clark’s last Labour Government was known for doing the same thing RGB.


  10. RBG says:

    Sorry Andrei, the “Labour did it too” response just isn’t true.

    “Labour MP Grant Robertson released figures on the use of urgency since 1999, which showed that in its first two years National pushed 17 laws through without allowing public submissions – compared to the four or five each term when Labour was in government.”


  11. Paranormal says:

    RPG I seem to recall Liarbour pushing through a truly draconian piece of legislation that removed individuals rights under urgency – the Seabed & Foreshore thingy.


  12. Dave Kennedy says:

    If you want consitently good process you will just have to vote Green 😉


  13. Dave Kennedy says:

    oops ‘consistently’


  14. Andrei says:

    In response to your 2:31pm Dave Kennedy


  15. Dave Kennedy says:

    Andrei, yep 🙂 Vote us in and we’ll soon have things sorted out.


  16. TraceyS says:

    You’re asking the impossible from Andrei. He only has one vote.

    What you really need is for Andrei to convince all his mates and their mates to vote Green. But you’re too scared to ask.


  17. Ray says:

    Vote us in and we’ll soon have things sorted out.

    Now there’s an election slogan to get the heart pumping…


  18. Paranormal says:

    “Vote us in and we’ll soon have things sorted out” – where o where have we heard that before?


  19. Mr E says:

    Trust British Paints – sure can!


  20. Dave Kennedy says:

    Tracey, our voting numbers have increased every election since 2005 and by 100,000 since 2008. We’re doing alright without Andrei’s help 😉

    Ray, I agree, it’s an exciting thought 😉

    You are right Paranormal, National have claimed something similar but have made a dog’s breakfast of it all (growing debt, housing crisis, blown IT budgets…). It’s the Greens’ turn now. You did note that we managed our own finances pretty well over the election and did not have to rely on corporate handouts 😉

    Mr E, how nice of you to compare the Greens with a sex offender, but I have learned that is the sort of thing you do 😛


  21. TraceyS says:

    Dave, what makes you think things will keep going up? You don’t think that the Auckland property market will, for example. And dairy prices, well you almost predicted that fall.

    Sorry to burst your bubble.


  22. TraceyS says:

    But just to get back on topic, MP salaries are definitely going to keep going up because the public sector unions will be vicariously bargaining for them.


  23. Dave Kennedy says:

    Tracey there is a trend around the world for the fortunes of Green Parties to be on the rise as voters realise that their current Governments, and many of the existing larger parties, are involved in anti democratic, unethical politics. People don’t like mass surveillance, giving up our sovereignty to the US (and ‘The Club’) and they especially don’t like the shift of wealth to a privileged few. The Greens in Australia, the UK, Canada and New Zealand are all experiencing greater support.

    The Green bubble has more substance than the housing and dairy ones 😉

    You can continue to support a party that has allowed the exploitation of our workers (zero hour contracts) or support a decent party that actually cares and does have principles.


  24. TraceyS says:

    “The Green bubble…”

    So we agree then?

    Does “substance” prevent bubbles from popping? On the contrary, I rather think that the greater substance within the bubble, the bigger the mess!


  25. Dave Kennedy says:

    I will leave you to your images of bubbles bursting and exploding substances, Tracey, it seems to excite you ;-P


  26. Ray says:

    The Greens in the UK are experiencing greater support.

    You would really have to wonder at the mentality of said “support” when the leader comes out with gems like…..

    “The Green leader was humiliated last Tuesday during an interview with LBC’s Nick Ferrari, when she experienced what she later described as a “mind blank” and “brain fade”. She struggled to explain how her party would pay for the 500,000 new council homes it is pledging to build, erupting into a coughing fit when pressed. She told Ferrari the cost would be £2.7bn, prompting the presenter to ask: “Five hundred thousand homes – £2.7bn? What are they made of – plywood?”

    The Green bubble has more substance than the housing and dairy ones


    Green Party’s Natalie Bennett gives ‘excruciating’ radio interview.


  27. Dave Kennedy says:

    You are right, Ray, it’s best to shut up when you don’t know the answer. It’s better to talk in vague terms like National does when they describe how changing the RMA and selling state houses will solve our housing crisis 😉


  28. Mr E says:

    Please show where this occurred:

    “Mr E, how nice of you to compare the Greens with a sex offender, but I have learned that is the sort of thing you do :-P”

    You cant, because I didn’t. This is another blatant lie by you, in order to denigrate me. This seems to be a repeatable behaviour from you Dave. I think the voting public will recognise this sort of behaviour. It could be possible that many already have.


  29. Ray says:

    I never cease to wonder how minds like yours work Mr Kennedy, .
    I saw a rather insipid slogan for a paint company, similar to your own insipid green slogan.
    You saw a sex offender!


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