Bill for new MPs pay setting process passed   18 Mar 2015

17 March 2015

Bill for new MPs pay setting process passed

Parliament has passed a law which will see MPs pay move in line with changes to public sector salaries, Workplace Relations and Safety Minister Michael Woodhouse says.

“Under the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill passed by Parliament this evening, the average annual percentage change in public sector pay, as measured by Statistics New Zealand’s Quarterly Employment Survey (QES), will now determine MPs’ pay rises,” Mr Woodhouse says.

“This means that MPs pay will increase in line with average public sector salary movements.

“Under the law change the Remuneration Authority will be required to take the previous year’s base salary and superannuation and multiply this by the QES index to reach a remuneration figure for the current year.

“The Authority will be required to adjust this remuneration where there is a new personal benefit entitlement or a real change to an existing entitlement. For example if the travel allowance for a dependant was removed, then the resulting reduction in personal benefit will be shifted to the base salary.

“There are no changes to how the Authority, The Speaker of the House and the Minister for Ministerial Services determines the value of personal benefits for MPs and their families, such as travel.

“The changes will come into force the day after Royal Assent on the Remuneration Authority Amendment Bill is given and will be backdated to 1 July 2014. This means MPs’ overall pay rise for the year starting 1 July 2014 will be 1.5 per cent, rather than the 3.56 per cent announced by the Remuneration Authority.”

The MPs salary determination that was issued by the Remuneration Authority on 26 February 2015 will be revoked, apart from the provisions in this determination that relate to allowances which stay in place.

The 2013 determination will come back into force until the Authority is able to gazette a new determination (for the period of 1 July 2014 to 30 June 2015) based on the amendments Parliament has made to the Act.

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