MP salaries

Steve Pierson at The Standard proposes that MPs salary increases be linked to the median wage:

Every year the Remuneration Board, an independent body, reviews the pay of MPs. Whatever pay increase it recommends is always approved by Parliament unanimously and without debate, to keep the process from being politicised. Every year, our ever mature media gleefully portrays this process as politicians giving themselves a huge pay rise.

What if, instead, MPs pay increases were automatic and the same amount as the median income increase? The pay and annual increase methodology would be contained in legislation, so would not require annual approval. Any suggestion of impropriety would be eliminated and our journalists could get on with investigating real stories.

First of all a couple of minor corrections. It is the Remuneration Authority, not Board, and more importantly they do not recommend pay increases – they set salaries.  Not only does Parliament not get to vote on them, they don’t even need an Order-in-Council.

I agree it would be good to avoid the annual outrage over MPs getting a payrise, which people think they have voted themselves.  But linking to the median wage would over time have MPs salaries drift below the level they should be to attract suitable professionals.  It would also provide an incentive for MPs to let inflation run rampant as wage increases of 15% and inflation of 15% hurts people on the median wage, but actually benefits people on higher incomes.

I do recall a Yes Prime Minister episode where Sir Humphrey gets a massive pay rise through Cabinet for the public service, by having MPs pay rises linked to public servants!

What I have long advocated is that MPs salaries and allowances should only be reviewed and set every three years, instead of annually. Inflation is low enough that this can be done.

What this would mean if no MP gets a pay increase during a term of Parliament. They keep the same salary for their term of office.  So in 2008 the RA would set MP salaries for 2009 – 2011. And in 2011 for 2012 – 2014. They would only take effect for the new Parliament.  So candidates can choose to stand knowing exactly what the salary will be, and voters will know the salary for the job they are electing people to.

Pablo, in the comments of The Standard, also endorses this and notes this is constitutional law in the US.

It would be a popular policy with the public, to have no pay increases for MPs during a parliamentary term, and it would save the MPs the annual bashing they get for something they don’t decide.