1 May 2024

'Never a right time' - MPs respond to pay rise news

8:24 am on 1 May 2024
David Seymour

ACT leader David Seymour said MPs would accept the law and abide by it, and discussions over whether they deserved a pay increase or not were a no-win situation (file image). Photo: RNZ / Samuel Rillstone

MPs have reacted cautiously to the news they are set to get a pay rise, admitting it was a no-win situation.

On Tuesday afternoon, the Remuneration Authority, an independent body which sets pay for key public office holders, determined MPs should get a pay increase.

MPs have not received increases to their salaries since 2017.

Those approached by RNZ shortly after the news broke stressed stressed the independence of the authority.

"I follow the directions of the Rem Authority," cabinet minister Shane Jones said.

"It's an independent decision, I think it's really important these decisions are separated off and not made by politicians, that's why we have the system we have," fellow minister Chris Bishop said.

An ordinary MP's 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.

It means by the end of this Parliamentary term, an ordinary MP's salary will be $181,200.

National MP Chris Bishop

Chris Bishop said the Remuneration Authority made an independent decision. Photo: RNZ / Angus Dreaver

"That's a real surprise, actually," Labour's Willie Jackson said.

Cabinet ministers will get $327,000 by 2026, and ministers outside Cabinet $276,000.

The prime minister's salary will increase to $520,000.

Christopher Luxon immediately indicated he did not want or need an increase, and so any increase would be donated to charity.

A question to the Prime Minister's Office asking to name the charity or charities was not answered.

The deputy prime minister's salary will increase to $369,800 by 2026 - but the role is set to change hands next year.

The leader of the opposition's salary has been reviewed, with the authority deciding its status had changed since the advent of MMP, and its salary relative to other party leaders was overstated.

It means Chris Hipkins will get a $13,000 increase over the same time period, rising from $296,000 to $309,000.

MPs were keen to separate themselves from the decision-making process, while also admitting their discomfort.

"The Rem Authority makes those decisions, it's really good that we stand back from it and say it is what it is, right," Labour MP Duncan Webb said.

"I think probably there's never a right time to give MPs a pay rise," Webb's Labour colleague Rachel Brooking said.

Speaking before the announcement, ACT leader David Seymour said MPs would accept the law and abide by it, and discussions over whether they deserved it or not were a no-win.

"Politicians' pay has been flat for six years, somebody has a legal obligation to set it for politicians and judges and so on. And from the point of view of someone like me, you're kind damned if you do and damned if you don't, it's just a process and law that you have to follow."

He said it was not particularly great timing when the public was doing it tough.

Green Party co-leaders Marama Davidson and Chloe Swarbrick

Green Party co-leaders Marama Davidson and Chlöe Swarbrick. Photo: RNZ / Angus Dreaver

Green Party co-leader Marama Davidson admitted she was uncomfortable getting the pay increase amid a climate of rising rents and the loss of half-price bus fares.

"There are other things we could be doing to make sure ordinary New Zealanders don't feel like we're rushing ahead," she said.

Fellow co-leader Chlöe Swarbrick agreed it would be galling to some members of the public to see MPs get a pay rise.

"I think that we end up with a real political football whenever we are engaging in what politicians should be paid or otherwise, and I think that's the point of the independent Remuneration Authority," she said.

ACT's Simon Court, Parliamentary Under-Secretary for the Minister for Infrastructure and RMA reform, said he was not in Parliament for the money but observed MPs had not had a pay rise since he entered Parliament in 2020.

"I think it's really important we keep this in context. I'm willing to accept a pay rise of 2.8 percent. The cost of living has gone up by much, much more than that in the time I've been in Parliament. I think it's important that MPs' salaries and allowances keep pace as far as practical with the private sector."

Parliament can pass legislation to overrule the pay rise.

In 2018, then-Prime Minister Dame Jacinda Ardern froze salaries for a year, while during the early days of the Covid-19 pandemic in 2020, ministers took a 20 percent pay cut and MPs took a 10 percent cut.

In 2015, Sir John Key overhauled the Remuneration Authority Act, by tying MP salaries to those of the wider public sector. It was repealed in 2019.

Labour leader Chris Hipkins said both Dame Jacinda Ardern, and Sir John Key before her, had made a mistake in intervening outside of the authority.

"I do think it was a mistake, I think we should just leave it to the process and MPs should stay out of it."