20 Aug 2018

MPs' salaries to be frozen for a year

10:09 pm on 20 August 2018

Prime Minister Jacinda Ardern has announced the Government will freeze MPs' salaries and allowances for a year.

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Photo: RNZ / Richard Tindiller

The Remuneration Authority recently determined an incease 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.

Last year MPs all recieved a pay rise of 2.46 percent.

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.

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."

Ms Ardern insisted the changes were not at all related to MPs' expenses which were released last week, saying the discussion had been underway before then.

The freeze will apply to MPs' salaries, superannuation subsidies and expense allowances.

It will not affect certain services such as accommodation, travel and international travel, because these services relate to the differing requirements of roles that MPs perform.

If the personal benefits of some MPs increase between now and June 2019, they could see a reduction in salary, because personal benefits are offset against salary under the Act.