26 Feb 2015

MPs receive pay rise of 5.5%

8:25 pm on 26 February 2015

MPs have received an increase of 5.5 percent in their pay.

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The Remuneration Authority has decided to boost MPs' pay. Photo: RNZ / Alexander Robertson

The Remuneration Authority ruling increases the Prime Minister's pay from $428,500 to $452,300 a year and senior ministers' pay from $268,500 to $283,800.

The Leader of the Opposition is on the same rate as Cabinet ministers.

The pay for an MP goes up from $147,800 to $156,000.

The authority said the increase represented both a salary increase and also a percentage of MPs' pay towards travel expenses.

PM disappointed with decision

Prime Minister John Key said he was disappointed the authority ignored his request not to increase the pay of MPs and ministers.

Earlier in the year he wrote to the authority advising it MPs should get a zero pay increase.

"In my view, inflation is running at a very low level, we're expecting the public service to have modest pay increases," he said.

"And I think a pay increase that was set at zero would be appropriate given that politicians have had pay increases over the last five or six years and lots of other people haven't."

John Key speaking to media in Auckland.

Prime Minister John Key - speaking to media earlier today. Photo: RNZ / Kim Baker Wilson

Mr Key said there was no justification for the 5.5 percent increase given inflation of 0.8 percent in the year to December and with average wages growing at around 2.5 percent.

Before the authority released its determination, he said it had to justify why politicians should get an increase.

"What I think the Remuneration Authority should do, if they're going to give a pay increase to MPs is point to the law and tell us what in the law is driving the sort of increases that they want to give MPs and then we should go away and consider whether that law is appropriately set."

The authority's chair John Errington told Checkpoint the Prime Minister was not ignored.

"We are required under the Act to consult with the PM and the Speaker and other people, which we did. He expressed a view, which we took into account when we made our decision. Our Act requires us to have regard to jobs of a similar size."

Greens, NZ First respond

Green MP Kevin Hague said his party believed the system that determined MPs' pay was not ideal.

"Where MPs actually get cost of living pay increases but there isn't that same security for everybody else and that's why we have put forward a proposal that MPs pay rises should be in fact set at the nominal increase of the median wage."

New Zealand First leader Winston Peters said politicians should be last in the queue for a pay rise.

"If you are asking me if we deserve a pay rise as much as ordinary people the answer is categorically no."

Yesterday, the Government announced a 50 cent increase to the minimum wage, taking it up to $14.75 from 1 April.

Former Minister of Labour Simon Bridges defended that rate, compared with MPs' pay.

"Actually we've got now the highest minimum wage relative to average wages, I think the fourth highest in real terms, we've put it up in real terms."

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