MPs Remuneration Bill passed

The MPs Remuneration Bill passed all three stages last night, and during the debate I got quoted over a dozen times by Labour and NZ First MPs. Oh dear.

Annette King said:

What we want to know from the Minister when he gets into the chair a little later on is whether he has got the formula right. I am not sure, because last week when we were meant to be debating this bill I just happened to read David Farrar’s blog. Unlike the Government, he had done some work on the methodology that the Government was using to set MPs’ salaries. What did he find? He found, in fact, that if MPs used the formula put up by the Government last week we would have got a bigger pay increase than what actually was provided. Under the new legislation that was put up last week the average would have been 3.1 percent; under the current law it would have been 1.7 percent.

Annette is referring to my blog post here.

Tracey Martin referenced another of my posts:

It was interesting that Mr Farrar, David Farrar—he is a well-known leftie, I think, is he not—has helpfully compared MPs with judges. An MP used to get 73 percent of what a district court judge gets, but today they get just 48 percent. This excludes superannuation subsidies that are far more generous to judges. And then Mr Farrar compared Cabinet Ministers with High Court judges. In 1985 they were paid almost the same. Ministers got $957 more. Today a Cabinet Minister gets just 67 percent of what a High Court judge gets. They get paid almost $150,000 less. We are not suggesting that that means we need to go up towards High Court judges; what we are suggesting is that things have got out of kilter.

That is referring to this post.

Michael Woodhouse as the Minister responsible, responded to my blog post:

Mr Farrar, on Kiwiblog. I can give that member the date if she wishes. It is true that the average increase, were it calculated over that period of time, would have been higher than the actual increases that were handed down by the Remuneration Authority under the current legislation. Why was that? There were straitened times. The Remuneration Authority quite rightly interpreted the legislation in the way that it was intended. Indeed, this is the only increase, for all the tub-thumping and rhetoric from the other side about the Prime Minister talking a good game and not acting—in fact, the Remuneration Authority listened very carefully, and this determination set out in 2015 was the first increase of over 2 percent since this Government came to office. In 2009 and 2010 the quarterly employment survey increases were 4.8 percent and 5.5 percent. Why was that? It was because that was the ongoing sequelae of an out of control Labour Government that taxed and spent and taxed and spent and built up the public service until it was out of control in terms of numbers and salary growth, and locked this Government in to wage increases that went out years ahead. That was the parting gift to the incoming National Government. Ten years of deficits and salary increases that the Labour Government arranged before it left office—4.8 percent and 5.5 percent.

It is worth remembering that the QES measures the average remuneration in the public sector, which is not the same as the average pay increase. If for example you have fewer entry level jobs, and more managerial jobs, then the average remuneration will increase.

Michael is right that the 2008/09 and 09/10 had very large increases in average public sector pay. However in 10/11 and 11/12 the increases were also higher than what MP pay rises were. It is only in the last two years that MP pay rises have been greater than public sector average remuneration increases. The Remuneration Authority has, as Michael said, been quite restrained.

I suggest to the Labour Opposition members that if they aspire to the Treasury benches again, they will do so knowing that their profligate spending will have direct benefit for them, and the public will have no truck with that.

This is why the PSA is worried. A future left Government that signs off on massive pay increases for PSA collective contracts will look like they are doing it, so they gain bigger pay rises themselves.

The last thing I will say is in relation to Grant Robertson’s intervention in the second reading around public servants’ pay linked to ministerial pay. He said that he did not believe that public servants should be paid any more than the Prime Minister and other Ministers in their charge.

I have good news for Grant in that regard. The Taxpayers Union at some stage will be publishing a list of every person or position on the public payroll who gets paid more than the Prime Minister. People may be surprised by how large it is. I’m sure the Taxpayers Union would welcome Labour’s support in keeping top public sector salaries restrained.