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Independent Renumeration Authority recommends a 2.8% pay rise for Members of Parliament

Public Policy / news
Independent Renumeration Authority recommends a 2.8% pay rise for Members of Parliament
govt
The National-led coalition government's executive council with Governor-General of New Zealand Cindy Kiro (centre) after the 2023 appointment ceremony (Photo: Mark Mitchell).

An independent body tasked with setting the salaries of Members of Parliament (MPs) has recommended giving politicians a 2.8% pay rise this year and 10.5% by 2026. 

This would lift a backbench MP’s base salary to $168,600 this year and $181,200 by 2026, up from $163,961 today. 

Christopher Luxon, as Prime Minister, would see his salary increase to $484,200 this year and continue to climb to $520,200 in 2026, up from his current salary of $471,049.

In a statement, a spokesperson said the Prime Minister has indicated he does not “want or need” a pay raise and would donate any increase to charity.

Senior ministers and the leader of the opposition would get a pay boost from about $300,000 today to between $309,000 and $327,100 by the next election. 

Finance Minister Nicola Willis also said she did not want a pay increase, while opposition leader Chris Hipkins said pay reviews were independent for a reason and should be accepted. 

This is the first full review of MP’s pay in two decades. It compared current salaries to those in other Westminster style democracies as well as in New Zealand’s private and public sectors. 

The report said this showed NZ politician’s salaries were less than almost all others in the comparison. However, the Remuneration Authority said it applied a “felt fair test”.

It said the test considers “all the relevant aspects of the item and, taking all things into account, answering the question, ‘is this fair in the entirety of the matter being considered’”.

After the initial 2.8% pay bump, salaries would be lifted each year based on forecasts of increases in the Labour Cost Index. The forecast growth would be equivalent to a 10.5% lift over three years. 

Pay freeze

Politicians' pay was last increased in 2017, before the Labour Government restored the Remuneration Authority’s power to set wages.

But before it was able to make any changes to salaries, the Covid-19 pandemic arrived and the Labour Government opted to freeze pay. 

Since then, the Labour Cost Index has climbed 17% while hourly earnings rose more than 30% and the Consumer Price Index jumped 20% — effectively eroding purchasing power.

The Taxpayers’ Union came out in opposition to the recommended pay increases, saying they were out of step with the financial challenges facing households. 

“While the average income of households is going backwards, MPs are locking in annual increases that don’t reflect the real world,” a spokesperson said in a statement. 

“The decision demonstrates that the Wellington-based Remuneration Authority is out of touch with the rest of New Zealand”. 

While it is true that average real incomes have been declining, nominal incomes have been rising faster than normal to keep up with high levels of inflation.

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41 Comments

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Perhaps taxpayers could collectively register as a charity so that we can get back our money that Christopher Luxton does not “want or need”.

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Doesn't NZ First have a charity to funnel its donations through?

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OMG, hadn't seen it before. Not doin' it for me :-).

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For comparison: Singapore PM S$2.2M pa

- their MPs salaries include a significant proportion of performance variable pay. Given Singapores performance, it's money well spent.

https://smartwealth.sg/salaries-singapore-president-ministers-mps/

 

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Yes and Singapore is a very sucessful economy.

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Successful? I guess that depends on your point of view. I wouldn’t want to live there. 

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Successful? I guess that depends on your point of view. I wouldn’t want to live there. 

I wouldn't want to live there, therefore S'pore is unsuccessful.

I've heard similar logic at the neighborhood BBQs.

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Should have read more carefully. 
Successful economy? Sure. 
Successful as a country I’d want to live in? Na. 

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Got it. Nevertheless, S'pore has been quite 'successful' at attracting people who add value to their economy and society. 

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Singapore incentivised productive enterprise and dealt with housing affordability, rather than doing as we did pandering to and subsidising lazy speculators on existing housing stock.

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In NZ we pay MPs peanuts and get a lot of monkeys. If we want talented people in parliament we should have less of them and pay those who get there well. I am thinking at least $250k per annum just for MPs. A good dedicated MP will work long hours and they have a lot of responsibility. For a start they pass our laws. That’s pretty big. 

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Singapore has ~20% less MPs than NZ, slightly higher population & over double the economy (GDP)

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relevance to a discussion on politicians remuneration?

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Rubbish. By NZ standards MP pay is very good. Back benchers have very little responsibility. They vote the way the party decides and generally do as they are told. Tell me why they are worth what they are paid now, let alone the increase. 

I think most MPs pay should be linked to the median wage in NZ. Perhaps then they'd be somewhat better grounded in reality?

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We have way too many MPs in NZ. Should have less MPs, pay them more and get better calibre of people

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100%

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Its not that simple you have to go through a selection process....

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at least now nicola can take her kids to the movies 

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Few more tinnies for Chloe  and OnlyFans premium content (because who pays for normal "blue movies" any more?) for Shane Jones as well. 

Lucky for some, I guess? 

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Wait a minute... there is more then free pron?

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As I said, ask Shane "I thought it was room service" Jones - he has a tale or two to tell about overpriced adult content. 

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Everyone could make at least one mistake with a tv remote....

 

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Over and over...

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It's a wonder the Greens haven't demanded hashish on the top shelf at Bellamys.

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Is Luxon going to donate his salary increase to the same place that John Key donated his salary to?

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The same place Key donated "a substantial portion" to you mean? The size of which was never confirmed.

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Wasn't it a "good portion"?

I also donate a good portion of my salary to charity.

(Although I lack the same power to subsidise and pump my property investments with taxpayer money then sell for way over market rates to a buyer from a foreign power)

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Salary for the NZ PM is approximately 10% higher than for the PM of Japan. 

Our popn is only 5% of Japan's and GDP is approx 6%.  

 

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What does the taxpayer get in return for paying these people’s salaries? A absolute shambles. Ok Some would say it’s a job they could never do therefor someone has to do it…. I think it’s a farce these people are paid so much. If political salaries were paid based on honesty, integrity and performance then they’d all be working second jobs just to get by. 

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that and the cushy jobs they get to do afterwards when their party sits on the treasury benches, 

current crop 

trevor mallard ambassador to ireland  phil goff  UK High Commissioner

tracey martin nz first, chair NZQA,

national ex mps just appointed  murray Macauly education, steven joyce teasury,

bill english kianga ora , paula bennet pharmac, simon bridges NZTA

 

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And/or through banks' revolving doors to recognise good service spruiking and pumping the property market with taxpayer money.

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It's crazy that there's such a strong reaction to what is an a-political decision to give a below-inflationary pay raise, after several years of a freeze. They are getting much less than other public sector worker raises.

Does everything have to be controversial? 

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I think its more that they have actively been cutting services, and restraining pay to essential services. While the merit of their raise is debatable, the optics of it when they are asking others to accept low/no raises in the public service isn't good. 

Also - almost nobody in NZ gets inflationary pay raises. Unfortunately

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Most wages roughly keep up with inflation - MPs must have lost out by ~20% by freezing pay over the last couple of terms. This doesn't really begin to get them back to where they were.

I know if I were given this offer after a long freeze I'd be pretty insulted. Other public sector workers (including myself) have done much, much better. 

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That's why James Shaw agonised over resigning while a minister. Nothing to do with not getting Green policies approved. It would be the pay cut from ~$250k to ~$150k that swung him to stay.

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How much do you think he could get in the private sector?On second thoughts don't bother answering that .

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Pay them what they are worth.

For me that's a 10% decrease.

Will help pay for there silly tax cut ideas.

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Performance Pay! 60/40 split!

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