30 Apr 2024

Members of Parliament and Prime Minister to get pay rise

4:17 pm on 30 April 2024
The Beehive in the evening in Central Wellington

Although the Remuneration Authority sets the pay, Parliament can pass legislation to overrule it (file image). Photo: RNZ / Cole Eastham-Farrelly

Politicians are in for a pay rise after the Remuneration Authority determined MPs salaries should go up by 2.8 percent.

The independent body, responsible for setting pay for key public office holders, has reported back on its review into MP's remuneration on Tuesday afternoon.

An ordinary MPs' salary will rise from $163,961 to $168,600, a 2.8 percent rise backdated to last October.

That will be followed by another 2.9 percent bump from July, a further 2.4 percent next year, and then 2 percent in 2026.

The prime minister's salary will rise from $471,000 to $484,200 and then $520,000 by 2026, with the deputy prime minister's salary increasing to $344,100.

However, Christopher Luxon has indicated he does not want or need the increase - and will be donating his to charity.

Ministers inside Cabinet will earn $304,300 and Ministers outside Cabinet $256,800.

Although the Remuneration Authority sets the pay for these roles, Parliament can pass legislation to overrule it.

This happened in 2018, when Dame Jacinda Ardern instituted a pay freeze for MPs and in 2020 when her Cabinet voted to take a pay cut during the Covid-19 pandemic.

It has been 20 years since MP remuneration was fully reviewed and more than six since politicians got a pay rise.

The Remuneration Authority is legally required to consider "prevailing adverse economic conditions" when determining remuneration rates.

In this review, it formed the view there was not a compelling case that meets this legislative test.

The authority looked at the pay of MPs in other Westminster style democracies and remuneration paid elsewhere within New Zealand in both the public and private sectors.

The comparisons showed New Zealand MPs' salaries were less than the salaries of almost all those comparisons.

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