1 May 2024

Pay bump for politicians: What you need to know

12:46 pm on 1 May 2024

Photo: RNZ / Angus Dreaver

Politicians' pay packets are about to get fatter thanks to a staggered 10 percent salary increase this term.

The Remuneration Authority has determined MPs should earn more after an extensive review of their pay system.

Although the authority is an independent body - a point MPs have stressed since hearing the news - its findings are already raising eyebrows.

Many households are struggling to pay the bills as recessionary pressures bite down - while police staff and their bosses are at loggerheads in pay talks.

Is it really fair our elected representatives are earning more? Here's what we know.

What are MPs getting?

Every MP will get a 2.8 percent pay rise, backdated to last October.

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

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

The prime minister's salary will be $520,000 and the deputy prime minister's will be $369,800.

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

The leader of the opposition will get $309,000.

What do MPs from other countries earn?

The Remuneration Authority looked at the pay and responsibilities of MPs in the United Kingdom, Australia, Canada and the Republic of Ireland.

It found that, even taking a cautious approach to the data, a New Zealand MP's salary is generally lower than that of their colleagues in other countries.

MPs in New Zealand earn twice the local median wage while their Canadian counterparts earn 3.1 times the average local salary.

MPs in Australia earn 2.7 times their median wage, MPs in the UK 2.6 times their median wage, and MPs in the Republic of Ireland 1.9 times their median wage.

The authority also found New Zealand's PM earns less than their comparative counterparts and much less than what public officials and private sector chief executives get paid.

Christopher Luxon

Prime Minister Christopher Luxon. Photo: RNZ / Samuel Rillstone

Is the pay bump fair?

The Remuneration Authority says its new pay rate aligns with other roles with comparable levels of responsibility in the New Zealand market.

Police officers earn $75,000 to $83,000, primary school teachers $49,000 to $89,000 and nurses $74,000 to $153,000 a year, according to careers.govt.nz.

It is worth noting the authority is legally compelled to consider "any prevailing adverse economic conditions" and can determine the remuneration at a rate lower than it would have otherwise set.

"The authority is confident that this outcome is appropriate in accordance with the Act's criteria," its report said.

Wellingtonians RNZ spoke to have mixed feelings about the move putting up a range of descriptions from "stupid" and "indecent" to "pretty reasonable" and "probably okay".

One woman said: "They're getting a pay increase, are you kidding?"

"Oh, that's stupid. How are they getting a pay rise when half of government agencies are losing their jobs, people will be struggling to pay bills and there's also a cost-of-living crisis."

Meanwhile, a teacher said: "We've recently got ourselves a pay rise but nowhere near that sort of pay.

"I'm also a bit worried about cuts in the public sector so if money is available perhaps it should go to public services and maintaining employees there."

Others, like a woman who works for charity, were more supportive.

"Well to be fair, if it's the first pay rise in over six years and it's only 2.8 percent then that sounds pretty reasonable. It's a really hard time to be announcing a pay rise isn't it? Wellington feels like a disaster zone at the moment, quite honesty.

"I work for a charity and we're all struggling to wonder where we're going to get some money from. So, not great but hey, six years is a long time."

A man in Wellington said" "It's probably okay, 2.8 percent is below the level of inflation but everybody else should get the same probably.

"I'm in the public service and there's quite a bit of pain being felt through the public service so maybe the right thing for parliamentarians to do is to share a bit of that pain."

Prime Minister Christopher Luxon has indicated he does not want or need the increase in earnings and will be donating his share to charity.

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