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Ardern announces salary freeze for MPs

Written By: - Date published: 5:26 pm, August 20th, 2018 - 55 comments
Categories: jacinda ardern, labour, national, Politics, Simon Bridges - Tags:

Jacinda Ardern has announced a freeze of MP’s salaries while a review of the salary setting system is carried out.

This is a good decision and smart politics.  No Government ever was hurt by deciding not to increase MP’s salaries.

From the Herald:

Prime Minister Jacinda Ardern has announced plans to freeze the salaries of MPs while a review of the pay-setting system is carried out.

MPs’ pay rises are decided independently by the Remuneration Authority.

The announcement came at today’s weekly press conference.

The latest pay rise, of 3 per cent, was due to kick in later this month and be backdated to July 1 but Parliament will pass a bill under urgency to freeze the current pay for a year.

Ardern said it is not appropriate for MPs to be subject to such an increase.

Cabinet had been advised of the impending 3 per cent pay increase which was based on a formula under law, and involved no discretion.

She said she had contacted National leader Simon Bridges and was supportive of the decision to freeze and review pay setting.

There was “complete understanding”.

“It is about values. We are focused on raising the income on lower to middle income earners,” she said.

One of the strongest examples of how bad teachers’ salaries have become is by comparing this to what they received a couple of decades ago.  Bryan Bruce has the details:

Backbench MPs are about to earn $163,961 a year. The top of the pay scale for teachers is $78,000.

If we turn the pay clock back to 1979, Backbenchers and experienced teachers earned roughly the same amount ($18,000 a year) Now the basic MP’s salary is more than twice as much as what a senior teacher earns.

Auckland schools are desperate for teachers but, even as she was preparing to leave parliament, former Education Minister Hekia Parata was quoted last March as saying :

“Teachers, like other Aucklanders – police, nurses, bus drivers – are facing the same pressures. And I don’t think one group over another should get some kind of different funding” (Herald March 19,2017)

Apparently, however, it is OK for the particular group to which she once belonged (MPs) to get “some kind of different funding, ” …the ongoing perks of which she will enjoy for many years to come.

This is what neoliberal economics has done to us folks – lowered wages while allowing house and food prices to rise. And those who have championed this kind of unfair economic policy in parliament for the last 30 years have feathered their own nests in the process.

Did we vote for a fairer government this time?

Who would know?

We are in limbo.

Perhaps if pay cuts for MPs and more money for caregivers, teachers, nurses,mental health workers ( for example ) was on the negotiating table I’d feel more hopeful.

It will be interesting to see if any MP complains. And to see what effect the new system has.

55 comments on “Ardern announces salary freeze for MPs ”

  1. Ed 1

    Brilliant.

  2. Kat 2

    And the Taxpayers Union supports the PM!!
    The Hoots and Hosk spin-out drama continues………….

  3. RedLogix 3

    Good politics; the optics of MP’s getting a pay rise, while battling with teachers and nurses was unsupportable for a Labour govt.

  4. Dennis Frank 4

    A genuine strike against neoliberalism! Well done, the government.

  5. marty mars 5

    Nice one.

  6. Craig Glen Eden 6

    Haha nice move, cant wait to hear from the tax payers union. Jordyn Williams will be rapted about this aye?

  7. pete 7

    There are sites to be found where people are spewing about this. Usually people would cheer the move but those who really hate Labour and Jacinda Ardern are looking for reasons to slam the move.

    • Cinny 7.1

      Too true Pete. Funny thing is national and act have come out in support, that will really piss of the people spewing about it.

      • alwyn 7.1.1

        It isn’t terribly surprising that National is in favour.
        It sounds exactly like the sort of thing that John Key would have done, don’t you think?
        I wonder who gave Ardern the idea?
        Incidentally what are some of the sites where people are complaining? I haven’t seen a single one.

        • Cinny 7.1.1.1

          Alwyn, I saw many negative comments on Stuff last night.

          I thought the PM who quit aka john key said it couldn’t be done.

          • alwyn 7.1.1.1.1

            I suggest you go back and look at what happened in 2009.
            Key did precisely the same thing.
            https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10555840
            The Green Party tried to up the ante to 3 years but that wasn’t accepted by Key as he didn’t accept that the recession was going to last that long.
            It was of course a pretty easy thing for Key to do as he had just become PM and it was quite easy to blame problems on the previous Government.
            “Mr Key has already written to the Remuneration Authority, which sets MPs pay, asking it not to award a pay rise this year”.
            Clearly the Green Party thought that the Labour Government had left the country in a terrible state though.
            I just had a look at Stuff. The complaints don’t seem to me to be about having a freeze as such. They are mostly about the amount being far to much for what they do and that a massive cut might be in order.

            • Ad 7.1.1.1.1.1

              He also donated his entire salary.

              • alwyn

                The best you will find is the statement, when he was a back bench MP that he donated part of his salary to charity.
                He never, at any time, claimed that it was the whole of his salary.
                At least not that I have ever seen. Perhaps you have some evidence.

              • Cinny

                key donating his entire salary to charity is one of the greatest myths in NZ politics.

                • dukeofurl

                  Every Mp does the donation bit, as part of their job. They are expected to tip in sums for local worthy causes and its not kept a secret.
                  I think thats a component of their pay package as , around $5000 I think it was when it was decided ‘to include it’.
                  Some of course would be more than that depending on electorate while others with no local presence like a few Mps would give a lot lot less

                  The trouble with Key is he was caught out calling an event a ‘charity’ when it was a fund raiser for some national MP.

              • Blazer

                a portion…that he would not elaborate on…coulda been $5 .

                Skilfully spread myth by National P.R though.

            • Cinny 7.1.1.1.1.2

              Alwyn, I found a very informative article from 2015, with many links….

              “Every year, John Key says MPs’ don’t need a huge pay rise, and even threatens to change the law. But he never does, except to hide the setting of MPs’ perks behind the Remuneration Authority blame-sink as well (which, surprise surprise, resulted in another big increase).”

              https://www.nbr.co.nz/opinion/nz-politics-daily-mp-pay-%E2%80%93-1-vs-99

            • Darien Fenton 7.1.1.1.1.3

              Nope ; John Key was on about the difference between MPs salary and the upper part of the 1%. This government is talking about the difference between the 1% including themselves and the rest of us ; The key is the calculation under the legislation and the formula has meant percentage increases taking into account huge CEO pay movements and applied to MP salaries. People have always complained about politicians, even when they got no pay. Today they get paid well, no doubt, but they are on fixed term contracts, have no negotiating power, work long hours, get threatened with rape and death threats and in my experience, don’t end up as millionaires at the end of it. Far more important imho to be watching what happens to the way ordinary workers’ pay is set.

              • Anne

                There is a significant portion of the population whose ignorance when it comes to the work load of the average parliamentarian is abysmal. They are too lazy and – dare I say it – too stupid to come to rational conclusions. They like to imagine that politicians spend all day lounging around on sofas sipping cocktail drinks and living the high life at our expense. They have no comprehension of the incredibly long hours and the interminable select committees they have to attend… the constant barrage of complaints and the never ending abuse by way of threats and foul language. And that’s before they even start on their constituency responsibilities.

                These are the same people who think Trump is the next best thing to “apple pie” and they come from all walks of life – including a few notables who like to call themselves “journalists”.

                • the other pat

                  sounds like a lot of jobs at the front desk so to speak where you deal with the public but dont get as well paid….my problem with pollies of any type is the perks they get for life and the outrageous superannuation……they should be scrubbed….the salary is large enough on its own.

                  • Anne

                    Hi t.o.p. (no not the political party),

                    I don’t begrudge them their Super scheme because I believe they contribute to that scheme out of their income. In other words its a compulsory scheme. We all had an opportunity to have such a scheme in the 1970s but the voters, in their lack of wisdom, decided they preferred two birds in the bush rather than a bird in the hand.

                    But the perks – especially the travel perks – is a different matter. Once upon a time decades ago when and MP’s salaries was much lower in comparison to the rest of the population it was fine, but that has not been the case for a long time now. It should be scrubbed.

                    • the other pat

                      i dont begrudge them super…………..its the OTT money they get for every dollar put in…..if its good for the goose…….

              • alwyn

                @Darien Fenton
                I think your statement about the things that the calculation depends on are wrong
                The Act says

                “Criteria used by the Authority in setting remuneration for MPs

                Under the Remuneration Authority (Members of Parliament Remuneration) Amendment Act 2015 the only criteria which the Authority is required to consider in setting MPs’ remuneration are:
                •the Quarterly Employment Survey (QES) for the public sector average ordinary time weekly earnings for full-time equivalent employees, using the change for the average for the previous year to June, and

                any changes in personal benefit or potential personal benefit arising through changes to entitlements under the Members of Parliament (Remuneration and Services) Act 2013. The Authority is required to take into account any prevailing adverse economic conditions when determining MPs’ allowance (but not salaries).”
                https://www.remauthority.govt.nz/clients-remuneration/remuneration-for-members-of-parliament-including-the-prime-minister-and-ministers/criteria-for-setting-remuneration/

                It is thus only meant to use the actual changes in Public Service earnings.
                It does NOT take any account of anything outside the Public Service and therefore whatever CEO’s of private companies may receive..
                If you think that the increases given to MPs by the formula are excessive you must clearly think that the increases received by Public Servants are also excessive.

                • McFlock

                  Except many of the low-paying public sector jobs (like cleaning) are now contracted out, while public sector upper management are paid rates commensurate with similar private-sector roles.

                  So it’s definitely skewed towards an average of higher incomes that doesn’t reflect the reality of most NZers.

            • McFlock 7.1.1.1.1.4

              Key asked to not be given more money, leaving the decision up to people who have an unrealistic idea of what politicians should be paid.

              Arden is making them not give her more money.

              See the difference?

              • alwyn

                There was NO difference between what the Key-led Government did in 2009 and what Ardern is doing at the moment.
                In 2009 they cancelled any increase in the MPs salaries.
                If you are going to comment on this at least you should read the real story rather than just make up fairy tales that conform to your political leanings.
                Read the link I provided.

                • arkie

                  Key supported a Green party motion it seems;

                  Parliament on Tuesday unanimously backed a Green Party call for a one-year freeze on MPs’ salaries.

                  Greens co-leader Jeanette Fitzsimons asked MPs to support the freeze in light of the recession.

                  The Green Party motion was originally for three years, but was reduced to one year in order to secure the support of the National Party.

                  https://www.radionz.co.nz/news/political/30241/mps-back-salary-freeze-proposal

                • McFlock

                  My bold:
                  John Key 2009:

                  Parliament on Tuesday unanimously backed a Green Party call for a one-year freeze on MPs’ salaries.

                  Their pay is set annually by the Remuneration Authority.

                  Greens co-leader Jeanette Fitzsimons asked MPs to support the freeze in light of the recession.

                  The Green Party motion was originally for three years, but was reduced to one year in order to secure the support of the National Party.

                  Ms Fitzsimons asked MPs to support a submission to the authority asking it to refrain from raising salaries in 2009 in light of the current economic climate.

                  Prime Minister John Key says the Government is not seeking to influence the Remuneration Authority, but rather wants to send a strong message about MPs’ pay..

                  Jacinda Ardern 2018:

                  The latest pay rise, of 3 per cent, was due to kick in later this month and be backdated to July 1 but Parliament will pass a bill under urgency to freeze the current pay for a year.

                  Ardern said it is not appropriate for MPs to be subject to such an increase.

                  So quite a big difference: Key watered down a motion politely asking the RA to not give him any more money pretty please. Ardern just flat changed the law so the RA couldn’t give MPs more cash.

        • AB 7.1.1.2

          John Key would certainly be “comfortable” with this sort of thing.
          Because in Key’s world, only mugs and losers actually depend on their income from work. The truly rich and successful have lucrative streams of unearned income from capital gain, rent, ticket-clipping, monopolistic pricing and other extractive techniques.

  8. peterh 8

    Ardern is making fools of some of our last lot in power, she is doing everything right,and the ones that say she is not ,are making fools of themself

  9. SaveNZ 9

    Excellent instincts and while they are about it, please get rid of the renumeration committee too.

    • Puckish Rogue 9.1

      What would you replace them with?

      • Dennis Frank 9.1.1

        Levellers. The Citizens Pay Equity Enforcement Authority. 😄

      • alwyn 9.1.2

        I think he is proposing that the Government should bite the bullet, admit that they completely screwed up the Census, and sack the people in the Statistics Department who ran it.
        The responsible Minister, Mr Shaw should resign as well.
        After all a “renumeration” committee would be people who recount things and that is what the Census is.
        I wonder if he means “remuneration”.
        And yes, I make mistakes like this all the time. Mine aren’t as funny though.

  10. The Chairman 10

    Jacinda made the right call on this one. It will resonate widely. Evident by it also having Act’s support.

    However, Jacinda should have gone one better and not only freeze MP’s salaries, but also reduced them.

    • Draco T Bastard 10.1

      I think you’ll find reducing wages/salaries is against the law.

      • the other pat 10.1.1

        cant be illegal….the neo libs been doing it for years to a lot of job sectors!

        • Draco T Bastard 10.1.1.1

          But they don’t do it directly.

          • the other pat 10.1.1.1.1

            well mate its semantics…..directly or deliberately stealthy its all the same methinks…..changing laws and giving the ok even tacitly to people/employers thru legislation or immigration targets etc etc all achieves the same….the 99% largely get shafted…..the mention of the myth about Key donating his salary or rather a piece of it…..to the majority its a just a big fuck you….even tho its 10 times what you peasants earn….i dont need it….here give it to the great unworthy cos i got more money than ALL of you can shit.!

      • Gabby 10.1.2

        Mps could be redefined as subcontractors draccy.

      • The Chairman 10.1.3

        She could and should look at restructuring how they are set and reset them at a lower base rate going forward (taking effect after the next election).

        • Draco T Bastard 10.1.3.1

          I can agree with that. I like the idea of going back the time where backbench MPs are paid the same as 3rd year teachers. A convergence around the $100k would probably work.

  11. Sabine 11

    Good. Good call.

    It is a start.

  12. Jimmy 12

    Good move by Jacinda.
    A few MP’s in there are well over paid at the current level.

    • indiana 12.1

      …but they are all defined as MP’s, hence they should be paid equally, irrespective of their performance outputs. I can recall one independent MP, that hardly turned up for parliament, but still collected his cheque.

      I mean after all, as GR supplies answers during question time, he should get paid more than the person asked to answer the question.

  13. Paul 13

    It’s easy though. Plenty of teachers and nurses who would like their pay frozen at the level of a back bench MP!

    Even if teachers earned $80k right now it would take 18 years of 3% pay rises to get to the $146k back benchers get.

  14. Cinny 14

    But wait…. there’s more…… 🙂 🙂

    The Government is stripping public service bosses of their performance bonuses, a move it expects will help save the country $4 million.

    Until now public service chief executive remuneration packages have included the potential to receive a discretionary payment of up to 15 per cent for “exceptional performance”.

    https://www.stuff.co.nz/national/politics/106440919/government-stamps-out-performance-bonuses-for-public-sector-bosses

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