MP’s pay frozen pending ‘fairer system’

The Prime Minister has announced that MP’s salaries and allowances would be frozen for a year “while developing a fairer formula for future pay increases”: MP pay frozen and fairer system for increases developed

“Today Cabinet agreed to freeze MP Pay till July 2019, and to reassess the funding formula used by the Authority to ensure it is fair and in keeping with this Government’s expectations and values,” Prime Minister Jacinda Ardern said.

“I have notified all party leaders of this decision.

The  Minister for Workplace Relations and Safety Iain Lees-Galloway said the Government needed to take action before the Remuneration Authority initiated new pay rates.

“Because of the timing of the annual increase process set in the Act, we need to use an urgent legislative process, aiming for introduction in September.

“This means we need to amend the Remuneration Authority Act 1977 to suspend new Determinations by the Remuneration Authority and restore the 2017 Parliamentary Salaries and Allowances Determination until 30 June 2019,” Iain Lees-Galloway said.

Ardern spoke more about it at yesterday’s weekly media conference.

RNZ: MPs’ salaries to be frozen for a year

The Remuneration Authority recently determined an increase of about three percent for the coming year, which Ms Ardern said did not feel right.

Urgent legislation will have to be passed in order for the freeze to take effect before the Remuneration Authority’s increase comes into force.

Jacinda Ardern said she has told other party leaders about the changes.

“They were brief conversations, obviously [government support] partners and I had an earlier conversation with and they are totally supportive.

“I’ve just got off the phone to [National leader] Simon Bridges and [ACT leader] David Seymour and the general sentiment I sense from them was complete understanding of the situation, and reading between the lines I think they probably agreed with the move as well.”

Ms Ardern said the move was about the government’s values.

“We are focussed on lifting the incomes of low and middle income earners and we also acknowledge that there has been an increasing gap between those income earners and those at the other end.

“We are at the other end. It’s just not right for us to have an increase like that currently and so we want to change the way that our increases are calculated in the future.”

This looks like a symbolic gesture, and a vague one at that.She gave no indication what the ‘fairer system’ would look like.

Ardern seems to think it wouldn’t look right to get a wage increase of about 3% while wage negotiations for 10-16% are taking place for teachers. It certainly looks like an odd move by her.

Is it fair for the Prime Minister to decide when MP salaries should rise, or whether they sshould rise, or what uis fair?

The Remuneration Authority is required by law to determine a pay increase which is in line with rises across the public service, but the prime minister has asked the funding formula to be reassessed, she said, to ensure it is fair and in keeping with her Government’s expectations and values.

More vagueness.

Would it be fairer for MP’s salaries to fall behind public servant salaries?

Would it be fairer for public servant salaries to be frozen pending the introduction of ‘a fairer system’?

Would it be fair to say that Ardern is making a symbolic gesture that will be nothing more than a delay to suit her purposes?

Stuff: Government freezes MPs pay amid multiple pay negotiations with educators, police

MPs’ pay is set by the independent Remuneration Authority – a process that deliberately keeps the annual pay review at arms-length from the politicians.

However, the Government has the power to set the criteria that the authority applies and Prime Minister Jacinda Ardern has announced a review of the act that governs the process.

Another review, with scant details.

The 2016 decision of the Remuneration Authority saw MPs get a 2.5 per cent pay rise across the board. Ardern earns $459,739, with Deputy Prime Minister Winston Peters on $326,697.

Ministers inside Cabinet earn $288,900, with those outside Cabinet on a $243,841 wicket. As leader of the Opposition, Bridges is on $288,900, and for other party leaders, a base salary of $175,398 is supplemented with add-ons depending on the size of the party.

A backbench MP with no additional responsibilities earns $160,024.

Allowances were awarded on top of those figures, which took care of “out-of-pocket expenses” related to the job.

Quite generous salaries, but they are jobs with huge responsibilities and especially for the PM and ministers, heavy workloads.

Green Party co-leader Marama Davidson said MPs should eventually only get the same pay rise as the average worker, “in dollar terms”

“MPs are paid well above the average worker, so giving them a percentage rise accentuates their higher pay. When it is right for MPs to get a rise, they should get the same in dollar terms as what the average worker receives.”

So MP salaries would gradually fall behind public servant salary levels.

Would Davidson also want that same system applied to public servants and government workers?

Graeme Edgeler suggests:

Automatically index to inflation just before the election to cover the whole next term

Then it wouldn’t be a political decision, nor a political embarrassment during the term.

 

26 Comments

  1. Ray

     /  August 21, 2018

    I am pretty sure I have seen this before by the parliamentarians, embarrassed by potential rises they have dicked around with the process, result, large wage increases, or changes to their various allowances and superannuation.
    When I was a young worker the PM earned $12000.

    • Kitty Catkin

       /  August 21, 2018

      What were you earning then ?

      • Ray

         /  August 21, 2018

        I was just a general shepherd then, earning just under $2000 but I had my keep paid and could and did save $1000 a year.
        The average wage was around $2500

        • Blazer

           /  August 22, 2018

          was the transformation from shepherd to …..sheep…difficult..Ray? 😉

  2. David

     /  August 21, 2018

    Why cant this government think past a headline, they seem incapable of coming up with anything concrete its all reviews and inquiries and working groups.
    They must sit around and go that sounds like a cool thing for our cool PM to say without having the first thought about what follows or if it makes any sense or has unintended consequences.oil and gas, plastic bags etc.
    That they couldnt think through a solution to a stupidly minor issue reflects poorly on them.

    • Gezza

       /  August 21, 2018

      Hosking was scathing on ZB about the setting up of yet another Committee & weren’t thIs government capable of actually doing anything themselves?

      • duperez

         /  August 21, 2018

        They probably won’t do anything themselves because of the certainty of the meltdown from Hosking and such about a Dictatorship.
        Dictatorships are fine if you’re the dictator or she’s your mate. Hosking would be along for the ride if it were his team, with him providing the dic part.

  3. robertguyton

     /  August 21, 2018

    Bunch of moaners. Across the board, Ardern’s move to freeze MPs salaries has been met with praise. Not here.

    • Gezza

       /  August 21, 2018

      It’s a good move politically & socially speaking – it will go down well with the mendicants & the peasantry – although time will tell (when we see what alternative system is proposed & adopted) whether it’s just a cynically calculated one.

      It is to be expected that it will be loudly applauded by the Labour & Green stalwarts.

    • Zedd

       /  August 21, 2018

      onya Jacinda !!

      her head is in reality.. not the greedy feeding trough :/

      • Kitty Catkin

         /  August 21, 2018

        The idea that MPs have no say in their pay meant that they could not be accused of giving themselves huge pay increases (or have the chance to do so)

        There are, of course, many ignoramuses who don’t know this well-known fact, or choose to ignore it.

        A PM interfering in this is inexcusable. It makes nonsense of the MP’s pay being set by a neutral organisation. She is being dictatorial and trying to be above the law.

        If MPs have pay rises later, her highhanded actions lay them open to the charge of setting it up themselves, one of the things that the current system was set up to avoid.

  4. Gezza

     /  August 21, 2018

    -Would it be fairer for MP’s salaries to fall behind public servant salaries?
    -Would it be fairer for public servant salaries to be frozen pending the introduction of ‘a fairer system’?
    -Would it be fair to say that Ardern is making a symbolic gesture that will be nothing more than a delay to suit her purposes?

    It is probably IS time to freeze senior PS Executive & MP’s salaries for a wee while to let the pay for the peasants to catch up a bit.

    It’s not like the astronomical salaraies for either group is producing really outstanding talent is it (with the possible exception of Shaneo)?

  5. Strong For Life

     /  August 21, 2018

    Mayors, MPs, councillors are elected for three years terms. I think politicians’ salaries, both national and local governments, should apply for the three years after they are elected until the next election. Presently, they get pay rises annually from the Remuneration Authority, which are usually above the rate of inflation and well above what most wage and salary earners get.

  6. Blazer

     /  August 21, 2018

    why have a remuneration authority at all?
    Supposedly they compare private -public salary bands.

    Disbanding the authority..there’s a saving right there.
    Edgelers idea has merit.

  7. Trevors_elbow

     /  August 21, 2018

    Doesn’t go far enough.

    Reset MPs wages as 2 x Average wage and make the role about public service and not a career choice as per Bishop, Adern, Swarbrick and a number of others.

    I think that would:
    1/ avoid all the wailing and posturing about MPs pay
    2/ mean people running for parliament probably have had a career and are of an age were some wisdom has been acquired through exposure to real life work with its attendant difficulties
    3/ Stop politics being see as a career- Uni to a Ministers office to a safe seat pathway. Prefer to see MPs who have had a real job before entering the bearpit of politics

    • Gezza

       /  August 21, 2018

      2x average wage is way too low for Cabinet Minister hours, abuse & responsibilites, possibly ok for ordinary MP’s.

      • Trevors_elbow

         /  August 21, 2018

        Did Key or Joyce need the money? Does Jacinda after her long private sector career… ok that was a dig at her relative inexperience…

        End of the day it shouldn’t be about money and it shouldn’t be aboit a career like Winston has made it. It should be about giving back and service.. about considered decision making not blind ideological kant…

        Good night I’m off to sleep

        • Gezza

           /  August 21, 2018

          Sleep well Trev. I should be waking up soon.

          • Kitty Catkin

             /  August 21, 2018

            I have known several Ministers because my late husband did, he was involved with a political party, One routinely put in 17 hour days, One, on his holiday, decided that he would not accept any engagements after 4.30 pm; he needed some time off. How many workers would expect to be working until 4.30 on their annual leave ?

            Of all the MPs I have known, I can only think of one who would have been earning less before she was an MP.

        • Blazer

           /  August 22, 2018

          millionaires always ‘need’ more.

  8. spanish_tudor

     /  August 21, 2018

    Rodney Hide had the best idea years ago:bulk-fund MPs, for arguments sake, at say $500,000 per year. Out of this amount comes their salary, travel, super, expenses, electorate expenses, electorate agent’s salary, electorate office rental, meal allowances, etc. Obviously a higher funded amount for PM and Cabinet, party leaders, and the handful of MPs with the largest electorates.

  9. NOEL

     /  August 21, 2018

    Wondered how the money was going to be found for tbe Greens over equity gender balance.
    The guy who got told by senior management he wasn’t built right for a better position will be getting a chuckle out of this one.

    https://www.stuff.co.nz/national/politics/106440919/government-stamps-out-performance-bonuses-for-public-sector-bosses

    • Gezza

       /  August 21, 2018

      Good. Always pissed me off they got paid more for the performance of their staff who got sod all except constant Visions, bullshit and powerpoint presentations.

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