Prime Minister, MPs to get pay rise

Although the Remuneration Authority sets the pay, Parliament can pass legislation to overrule it.
Politicians are in for a pay rise after the Remuneration Authority determined MPs salaries should go up by 2.8 percent.

The independent body, responsible for setting pay for key public office holders, has reported back on its review into MP's remuneration on Tuesday afternoon.

It has set an ordinary MPs' salary at $168,600 a year, up from $163,961.

The prime minister's salary will rise to $484,200 and the deputy prime minister's salary to $344,100.

However, Christopher Luxon has indicated he does not want or need the increase - and will be donating his to charity.

Ministers inside Cabinet will earn $304,300 and Ministers outside Cabinet $256,800.

Although the Remuneration Authority sets the pay for these roles, Parliament can pass legislation to overrule it.

This happened in 2018, when Dame Jacinda Ardern instituted a pay freeze for MPs and in 2020 when her Cabinet voted to take a pay cut during the Covid-19 pandemic.

It has been 20 years since MP remuneration was fully reviewed and more than six since politicians got a pay rise.

The Remuneration Authority is legally required to consider "prevailing adverse economic conditions" when determining remuneration rates.

In this review, it formed the view there was not a compelling case that meets this legislative test.

The authority looked at the pay of MPs in other Westminster style democracies and remuneration paid elsewhere within New Zealand in both the public and private sectors.

The comparisons showed New Zealand MPs' salaries were less than the salaries of almost all those comparisons.