22 Jan 2009

Key wants freeze on MPs' salaries

8:38 pm on 22 January 2009

Prime Minister John Key is urging the Remuneration Authority to freeze salaries for Members of Parliament this year due to the economic downturn.

The independent authority agency sets the salaries of MPs, judges, local government representatives and some statutory officers.

In November, the salaries of MPs, ministers and the prime minister were raised by between 4% to 4.8%.

In a letter to the chairman, Mr Key asks the authority to exercise restraint when next considering all salaries because the New Zealand economy is facing a tough time.

Mr Key says the National Party will also recommend a zero pay increase for Parliamentary salaries at the appropriate time.

Move concerns PSA

But the Public Service Association is concerned the Government is trying to send a message about wage rises to the state sector.

The union's national secretary, Brenda Pilott, is questioning if the Government is indicating that wage rises are off the table for public servants this year.

Ms Pilott says it is hard to understand why the Government made the move now, when MPs pocketed a pay increase last November and will not have their wages reviewed until November 2009.

However, she says she appreciates that Mr Key would be embarrassed by a further pay increase.

Labour Party leader Phil Goff says if the Government wants to freeze MPs' salaries it should change the legislation.

Mr Goff says he thinks all Parliamentarians would agree that there has to be constraints this year, but the appropriate way to do that is to set it out in the legislation.

Mr Goff says that would mean the authority would have to take into account economic circumstances at the time and the position of other New Zealanders.

He says Mr Key's request to freeze MPs' salaries was obviously prompted by US President Barack Obama freezing the wages of senior White House staff on Wednesday.