Curbing MPs' remuneration

Every time the Remuneration Authority bumps up members of Parliament salaries the public, or at least large parts of it, is appalled.

Almost every time the increase far outstrips the rise most New Zealanders receive. Every time there are cries something needs to be done.

Every time nothing happens.

It was only 40 years ago that a basic MP's salary was on a par with a senior secondary school teacher. Not any more.

Backdated salaries are to rise 5.5% when inflation last year was only 0.8%, and a backbencher's pay jumps by $8200 a year to $156,000.

A secondary teacher at the top of the basic scale and without additional responsibilities earns $73,000.

No-one could deny being an MP is tough. First you have to be suitably ranked on a party list or selected in an electorate where you can be elected.

This is highly competitive. Once in Parliament, there are heavy demands on MPs and their families. Conscientious MPs work long hours, often thanklessly.

MPs need thick skins because of the criticism that is bound to follow.

Job security is mixed, depending on list rankings, party success or whether a seat is marginal.

But many others work multiple jobs and work intensely hard for comparatively little pay.

Even before the last increase, MPs were in the top 1% of earners. Generous superannuation and tax-free allowances boost them to more than $200,000 a year.

Many MPs earn in Parliament much more than they ever could in the wider world.

There are others capable of matching parliamentary salaries and a few who accept large pay cuts, or potential pay cuts, to enter the House.

For many, too, being an MP is far more than a job.

It can, despite widespread cynicism, be an opportunity to serve and to pursue their beliefs. Hopefully, MPs are not in it for the money.

Hopefully, they do not become a detached privileged elite.

Hopefully, they can be reasonably well paid but not too far out of touch with most New Zealanders.

That is in severe danger of happening as backbench MPs earn three to four times average salaries.

When MPs decided on their own increases, there was public pressure to rein them in, although MPs across parties still found ways to make sure they looked after themselves.

Responsibility, however, was handed to the Remuneration Authority.

Formerly known as the Higher Salaries Commission, it has been busy increasing salaries (and sometimes conditions) of judges, local body politicians and senior civil servants well above inflation rates and most salary increases.

It has argued that, by law, it is obliged to compare salaries, including those of MPs, with those in the private realm and also consider the recruitment and retention of quality people and prevailing economic conditions.

Meanwhile, those senior corporate salaries have leapt ahead, supposedly because of supply and demand but perhaps also because of underlying self-interest.

Company directors, chief executives and senior civil servants - and for that matter members of the Remuneration Authority itself - all come from the same circles.

They convince each other of their stellar worth.

If others do well so will they.

Thus salaries ratchet up.

The Greens have for some time proposed increases should be matched to the median salary increase across the community in dollar amounts (not percentages).

That would certainly put a break on the sizes of the increases.

Given the massive responsibilities - and certainly compared with private sector chief executive jobs - Prime Minister John Key is not overpaid, even with an extra $23,400 a year to $452,500.

Likewise, the pay of the president of the United States ($US400,000 plus various expenses) hardly matches his power or aligns with company heads.

Despite MP remuneration being far beyond average salaries, MPs do need to be paid well to try to attract better candidates and lessen any excuse for corruption.

But there also needs to be a large element of social service and hefty increases for backbenchers well above inflation rates need to stop.

Mr Key has long said this should happen.

It is time he played his part in curbing MPs' remuneration. 

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