27 Feb 2015

PM says pay raise about right

2:48 pm on 27 February 2015

The Prime Minister says the pay rates of MPs and Ministers are now about right - despite yesterday saying they did not need any increase.

But John Key's warned the Remuneration Authority not to give any further pay rises.

The Remuneration Authority has given MPs a 5.5 percent pay rise - 10 times the 50 cent an hour increase in the minimum wage.

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Photo: 123rf

The salary for an MP goes up from $147,800 a year to $156,000.

The Prime Minister's pay jumps more than $23,000 to $452,000 a year and senior ministers' pay increases from $268,500 to $283,000.

John Key said he would meet with the Remuneration Authority to discuss if law changes needed to be made to the way it set the pay rates.

But he said the pay rates of MPs and Ministers were now about right.

"If you look at the salary of a backbench MP at about 156,000, or the leader of the opposition or me as Prime Minister at say 450,000, I believe that has set an absolutely correct level of in cooee (increase) now. I can't see the justification for big increases going forward."

Mr Key told Morning Report he had asked the authority several times not to increase salaries but it had said the law required it to award pay rises.

"I do support changing the law. We'd have to think through exactly how you do that, or particularly how you set it.

"But there would be a way of saying it should reflect average public service increases, or it should reflect inflation, or whatever it might be."

MP says pay rise out of kilter

Green MP Kevin Hague said the pay rise did not stack up, and seemed out of kilter with what most New Zealanders were experiencing and what he called the "pathetically small" increase in the minimum wage.

National MP Jami-Lee Ross said the remuneration authority was not getting the message.

"The Government had a view that expenditure needed to be controlled and the authority should take that on board," he said.

Labour Party leader Andrew Little Little said the Prime Minister had had plenty of time before now to do something about it.

Mr Little, who receives the same pay as Cabinet Ministers, said there was a problem with the way the wage determinations were being made.

There needed to be a fix and the Government ought to get to work on it, he said.

CTU says salary rises cannot be justified

The Council of Trade Unions said it was wrong that MPs salaries were tied to the salaries of private sector bosses.

The Council's economist Bill Rosenberg said MPs salaries should not be tied to the private sector.

"You cannot justify some of those salaries that people are getting otherwise than saying well, people overseas are getting similar amounts therefore this is a relativity issue. That's nothing to do with what they deserve - simply perpetuating an unequal and inappropriate system."

Mr Rosenberg said it would be better to concentrate on lifting the wages of lower paid workers.

Can MPs give the money back?

Labour MP Iain Lees-Galloway said the increase was hard to swallow and MPs had been put in a very difficult position by the Remuneration Authority.

"And no-one is going to like it. Not the public - nor the MPs."

But if they don't want the extra money will they give it back?

Finance Minister Bill English said it was not as easy as that. He said they had looked into that before and it was amazingly difficult to do.

Energy Minister Simon Bridges felt the 5.5 percent pay rise was completely wrong.

He said the Remuneration Authority's decision meant politicians' pay rises did not reflect what workers everywhere else in the country were getting - or not getting.

Mr Bridges had not decided what he would do with his extra money but said he gave a lot to charity, so that might be factored in.

However, the Remuneration Authority does not seem to think MPs got enough.

In its ruling it noted that: "based on current movements in remuneration for top-level executive positions, the gap between market remuneration and the remuneration of senior members of the Executive and Parliament is increasing."

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