“Massive increase” in MP funding, most for Government MPs

The Speaker has tabled a report in parliament proposing that MPs, especially Government MPs, may be given substantially more funding – like 20% – plus extra staff for Ministers, just two weeks after two weeks ago Prime Minister Jacinda Ardern announced a’nobly prudent’ freeze of MP salaries – 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.

Ardern made a big deal about this in some sort of principle of fairness and to close the income gap – “It is about values. We are focused on raising the income on lower to middle income earners”.

NZH: Prime Minister Jacinda Ardern announces salary freeze for MPs

The latest pay rise, of 3 per cent, was due to kick in later this month and be backdated to July 1 but Parliament will pass a bill under urgency to freeze the current pay for a year.

Ardern said it is not appropriate for MPs to be subject to such an increase.

“It is about values. We are focused on raising the income on lower to middle income earners,” she said.

Ardern said the way the draft increase had been determined did not seem fair.

“We do not believe, given that we are at the upper end of the scale, that we should be receiving that sort of increase.

“The current formula isn’t meeting our expectations.

“What we have seen in this determination I believe is out of kilt with those expectations.

“This is about us acknowledging that we are at the top end … and this only extends that gap.”

But the salary gesture pales in comparison to expence increases proposed for MPs, especially list MPs.

David Farrar at Kiwiblog: Massive increase proposed for MPs expenses

The Speaker has tabled a report which proposes a massive massive increase in funding for MPs, almost all of it to benefit Government MPs.

We’ve got the Government turning down a 3% pay rise, which is chicken feed compared to the 20% increase in funding that has been proposed for them.

The details will make your blood boil. They overwhelmingly benefit the Government. The major changes proposed are:

are:

  • List MPs to get the same funding as Electorate MPs. 34 of the 49 List MPs are Government MPs. It is a huge boost for Labour, Greens and NZ First. It is also wrong as Electorate MPs have far greater demands on them. They represent an actual constituency and need extra staff to deal with all the constituent issues. Many List MPs do very little constituency work, and any extra funding will go on advertising and campaigning.
  • Parties won’t lose funding if they lose MPs at an election. At the moment a party gets funded based on their actual number of MPs. Totally sensible. This report proposes a gerrymander where National and Labour get guaranteed 38% of the funding regardless of their number of MPs, and NZ First and Greens get 8% minimum, again regardless of their number of MPs.
  • Also outrageous is it proposes Ministers get extra staff. Ministers already get totally funded for their staffing needs through Ministerial Services. And the number of staff is already 13% higher than the last Government. This report proposes each Minister also get an additional staffer funded through The Parliamentary Service. So a huge boost of 30 more staff for the Government. It also may allow Ministers to avoid the OIA by having one of their staff working for The Parliamentary Service instead of Ministerial Services.
  • And bad enough this $13 million increase in funding for MPs, but they want to have it get even bigger every year. They recommend an automatic 3.3% to 3.7% increase every year, which means Parliament will be the only public sector organisation that doesn’t have to make a business case to justify extra spending.

This proposal is a huge rort designed to massively increase funding for Government MPs.

And it is the Government that effectively decides whether or not to accept the recommendations.

Farrar seems a bit against this, perhaps for good reason. The quoted cost is accurate:

Our recommendations include indicative costs where these are available, and these show that the package of
recommendations will involve a significant investment in the first year to support the lift in performance of our
democracy. Across all of the funding, this represents approximately $13.0 to $13.5 million per year.

$13 million works out at $108,333 per MP, but it sounds like it will go disproportionately to Ministers and list MPs.

That’s a lot more than a 3% salary increase would cost.

It will be interesting to hear what Ardern thinks about this.

 

 

7.84% rates rise “a normal part of the cycle”

Saying that a 7.84% rates rise will be “in the lower quartile” won’t mean anything to ratepayers who face increases of $200-400. I am horrified by this level of increase – and it sounds like it is what much of the country should be expecting.

ODT: DCC approves second highest rates increase since 1989

The Dunedin City Council has backed a higher-than-expected rates rise of 7.84%, after agreeing to a series of last-minute funding boosts yesterday.

Plus:

The council has also signed off on a 4% increase in most fees and charges.

The waffle:

But Mayor Dave Cull insists the rates hike, like the fees and charges, are just a normal part of the cycle as cities invest in their futures.

That was within the council’s new self-imposed rates limit of 8% for the first year.

That’s about four times the rate of inflation.

Council chief executive Sue Bidrose said the city’s rates would remain in the lower quartile, while other centres across the country eyed increases of between 3% and 15%.

Lower quartile, about average, that’s tosh when trying to make excuses for an increase of about 8%.

It’s not as bad as 15%, but that’s like saying it’s not as bad getting two teeth pulled by the dentist as getting four teeth pulled.

Mr Cull said cities went through cycles of investment, leading to periods of higher rates increases, but the alternative would be worse.

Those cities that kept rates artificially low by not spending in the short term were eventually forced to catch up, leading to ”massive rates increases” later, he said.

”They pay the price in the end. The idea is to try to keep it smooth, but every now and then you have got to invest,” he said.

More nonsense. I think that rates have been rising ahead of inflation for yonks.

This is budget day news. I don’t expect to get any joy from the Government today either, but the budget shouldn’t be this bad.

60% rates rise proposed

It’s not uncommon for mayors and councils to play down rates rises. Like this:

Wellington Rates Snippet.png

Gwynn Compton:  Spin cycle shrinks rates as well as clothes

But for Wellington City Council, an attempt to spin the merits of reducing a potential 7.1% rates rise down to 3.9% has ended up with an announcement that they’re reducing rates down to 3.9%, which would be a 96.1% cut!

In this case, the words “rise” or “increase” appear to have been omitted from the article.

In contrast, in the ODT today:  Rates must rise to maintain momentum, mayor says

Dunedin faces a 7.3% rates rise as the Dunedin City Council eyes a decade of increased investment, but Mayor Dave Cull says it is essential for the city to keep riding a wave of activity.

Mr Cull was commenting before today’s start of public consultation on the council’s latest 10-year plan, which outlined proposed spending for the decade to 2028.

However that is a bit misleading too – the 7.3% rise is proposed for the first of ten years. More detail:

Rates would rise by 7.3% in the 2018-19 year,
by 5% the following year,
and by 4.5% each year
until 2027 when the increases would drop to 4%.

That amounts to about 60% over ten years.

Modest rates of $2000 would rise to $3190 after ten years.

2018   2,000.00
2019 7.3%   2,146.00
2020 5.0%   2,253.30
2021 4.5%   2,354.70
2022 4.5%   2,460.66
2023 4.5%   2,571.39
2024 4.5%   2,687.10
2025 4.5%   2,808.02
2026 4.5%   2,934.38
2027 4.5%   3,066.43
2028 4.0%   3,189.09

And that is without any knowledge of future inflation, which would presumably add to the increases.

The council had come out of a period of austerity, during which rates increases were limited to 3% and spending was cut, as the focus shifted to driving core council debt down below $230 million.

Rates had still risen faster than inflation over the last ten years.

At the same time, core council debt – excluding companies – was forecast to climb from just over $200 million now to $285 million by 2028.

So debt is forecast to rise despite the large rates rises.

Not helping, from ODT at the same time: Tender troubles mean more delays for cycleway

Dunedin City Council staff have voiced frustration after a call for tenders to complete an Otago Peninsula safety improvement and shared pathway project came in $20 million over an already-inflated budget.

The council last year announced a revised budget to complete the project alongside Portobello Rd and Harington Point Rd, which rose from an estimated $20 million to $49 million.

This is not the first ‘shared pathway project’ (cycleway) where the costs have blown out.

So even with large rates rises there must be little confidence that the ‘increased investment’ wouldn’t increase substantially more.

This was Mayor Cull’s pledge last election:

In the six years I have led our Dunedin City Council we have reduced rate increases.

That’s much like the Wellington example above – rates increases were ‘reduced’ to above inflation.

I wonder how what he will pledge if he stands again in next year’s local body election.