A bill tying MPs salaries to public sector pay rises has passed through all stages this evening.
The Remuneration Authority (Members of Parliament Remuneration) Amendment Bill completed its third reading just before 10pm by 106 to 14 with the Greens opposed. The bill was introduced under Urgency after Question Time.
The bill was a reaction to the Remuneration Authority recently awarding MPs a 3.56 percent increase to MPs as MPs felt this was out of proportion to inflation and other people’s pay rises. The bill would set aside the Remuneration Authority’s last determination and replace it with formula linking MPs pay to the public sector salary movements as measured by the Quarterly Employment Survey. The formula would also take into account other factors such as travel allowances.
During the committee stage the minister in the chair, Michael Woodhouse, said the bill would hold back MPs pay rises because the Government had placed stronger controls on public service pay.
Some have observed if past public sector pay rises had been passed on to MPs then their pays rises could well have been higher than those set by the Remuneration Authority. Mr Woodhouse said if a future Government increased public sector in a profligate manner and this created equally higher pay for MPs they would be punished by voters.
Green MP James Shaw pointed out it would place an economic incentive on future MPs to increase the public sectors pay if they wanted to get higher pay themselves.
All parties agreed to the need to restrain MPs salaries, but there was disagreement about the best way to do this. Amendments by the Greens saying MPs pay rises should be tied to other formula, such as to the nominal median wage movements or the narrow public service and not the wider public sector were defeated. Another Green amendment to cancel the Remuneration Authority’s determination and set up a longer process was also defeated.
A number of MPs said there should have been a better process with a bill going through a select committee to find the best formula to set it by. There was also a lot of focus on the salaries of senior public sector chief executives with many MPs saying they were out of control.
Earlier the second reading and committee stage were completed by 106 to 14 with the Greens opposing.
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