The Remuneration Authority will soon decide what pay rise MPs get. This used to be an annual exercise. I lobbied for years that they should avoid the pressure of annual pay rises, and just have their pay set for each term of Parliament.
They have partly moved towards that. There is only one determination for the term, but it occurs after the election, not before – which I prefer. My preferred model would be the salaries are deterred three months prior to an election, so anyone elected knows in advance what the salary will be, and it won’t increase during the term.
The increase may be quite large as they salaries have been frozen since 2017 for various reasons. The problem is a large increase will look bad at a time when the Government is urging fiscal restraint elsewhere.
So I have another solution to the problem.
I have also long advocated that the minimum wage should be linked to the median wage. This would mean that the way to increase the minimum wage is to have a growing economy where the median wage is growing also.
Well the same could go for MPs. The higher the median wage of the economy, the higher an MPs salary is.
The median FT salary is currently just under $65,000.
MPs salaries are:
MPs $164,000
Select Cmte Chairs $180,000
Minister outside Cabinet $250,000
Cabinet Minister $296,000
Deputy PM $335,000
PM $470,000
This would give ratios of:
MPs 2.5 times median wage
Select Cmte Chairs 2.75x
Minister outside Cabinet 3.85x
Cabinet Minister 4.5x
Deputy PM 5.2x
PM 7.25x
No more of having the routine of people complaining if the increase is too high, if it is the exact same ratio as the median wage.
UPDATE: The Authority has made its determination, which is a modest 2.8% increase for most roles compared to 2020. They have also done determinations through to 2026, by which stage the increase is 11% over 2020. That is still pretty modest.
However the full remuneration packages are still considerable. This is what they now are:
