MPs’ pay increases: Prime Minister Christopher Luxon faces his first trial by pay rise while Chris Hipkins is short-changed

OPINION

So Prime Minister Christopher Luxon gets his first taste of the three-yearly horror of finding out what MPs’ pay rises will be and having to defend it.

In a political sense, there
is no good time for MPs to get pay rises – but there are times which are worse than others.

A period leading up to a Budget when a government is taking a scythe to government spending, pegging back the size of benefit increases, cutting public servants, and cutting free lunches for school kids would usually be considered one of those worse times.

On the bright side, the pay rises coming for MPs are at least less in percentage terms than the pay rises in the Government’s last – rejected – pay offer for the Police.

Luxon opted to treat it all a bit like ripping off a band-aid: let it happen, but please make it happen as quickly as possible.

He left it completely to the Remuneration Authority. He has not ventured an opinion on whether or not MPs should have got a pay increase.

Once the pay increase totalling 10.5 per cent over three years was released, he did not take the politically easy route of saying it was unnecessary. However, he promptly said he personally did not need it – and would donate his increase to charity.

He had learned a thing or two from the debacle around his accommodation allowance claims. Propitiously, his muse in that regard, Sir John Key, was sitting in Parliament just before the pay decision emerged on Tuesday watching Luxon in Question Time. Key had donated a fair chunk of his salary to charity.

Politicians can try to hide behind the independent decision-making of the Remuneration Authority all they like – there is no escaping that they are the ones who get it and hence the public face for something there is usually little public appetite for.

However, there are some redeeming features for the pay increases set out for the next three years. The first is that those salaries haven’t increased since 2017.

The Remuneration Authority has taken a proportionate and measured approach. There is no big bump-up or any added bonuses to compensate for those six lost years of the 2017–2023 pay freeze.

The increases of between 2 and 3 per cent a year are lower than or near to expected inflation. They are not excessive compared to others’ pay rises.

The Authority drew the usual comparisons to what politicians overseas earn, and highlighted how miserable the PM’s pay is compared with that of CEOs in both the public and private sector.

It acknowledges that job of being an MP is already considered unappealing enough. Keeping salaries down to save the current batch of politicians a few blushes will not help entice people.

However, spare a thought for Labour leader Chris Hipkins who only gets a 4.5 per cent increase spread over the next three years, while other MPs get 10.5 per cent and some even more.

For the first time, the Leader of the Opposition will be paid less than the Speaker and Cabinet Ministers.

The job often dubbed the Worst Job in Politics has suddenly got even less appealing.

The Remuneration Authority said that was to recognise that under MMP, smaller parties now share the load in Opposition and the salary difference should not be as great. It effectively confirmed that being leader of the Opposition is a job-share.

It’s a fair point. As Act leader David Seymour, the Greens and NZ First’s Winston Peters NZ First can testify, there have been times in the recent past when the smaller party has carried quite a lot of that weight.

Those are the times when the larger party has been a dysfunctional wreck, more absorbed in its internal wrangling than holding the government’s feet to the flames.

Those are times when the Leader of the Opposition’s salary might be described as danger money.

Claire Trevett is the NZ Herald’s political editor, based at Parliament in Wellington. She started at the NZ Herald in 2003 and joined the Press Gallery team in 2007. She is a life member of the Parliamentary Press Gallery.