MPs pay rise coming

Claire Trevett at NZ Herald reports:

Prime Minister John Key has hinted the Remuneration Authority is lining up a good pay rise for MPs this year, saying he had been consulted on the proposed increase and had told the authority he believed only a small, if not zero, pay rise should be offered.

Mr Key would not reveal what the proposed increase was or what he had said but hinted it was above the rate of inflation.

“But bluntly, I’m not in favour of big pay increases for MPs. If it was my vote, it would be no pay increases, but I don’t get that vote.”

He said there might be a valid argument for low increases to an MPs’ salary to keep pace with inflation. “That would be the top end. But I don’t buy the argument that they’re out of whack with the rest of the private sector or the public sector.” Inflation over the 2012/13 year was 0.7 per cent.

Wage increases across the board is one of the factors the authority takes into account when setting the salary, which it usually announces in December and is backdated to July.

Mr Key said he often copped the blame for those increases, although the authority was independent and made its own decisions.

The Government and MPs could save themselves some pain if they adopted my submission which was that the salary for MPs should be set just prior to each election, and remain fixed for a term of Parliament. In these days of low inflation, that won’t disadvantage them. Rather than say get three annual pay rises of 2% each, the salary for each term might be say 6% more than the term before. The key thing is they would get elected on that salary and stay on it.

MPs’ pay

Between 2009 and 2012:
*MPs salaries rose by 2.9 per cent
*General wages rose 5.6 per cent

A useful fact. I still expects howls of outrage though.