Members of Parliament (Remuneration and Services) Bill

Just a brief commentary from me on Part 2—

💬 Chris Hipkins: Make it brief.

Well, it can be brief, I say to Mr Hipkins, because I can say it in words that he will understand. Part 2 is concerned with salaries and allowances of members of Parliament. Clauses 9 to 13, very importantly, set out the role of the Remuneration Authority, which is appointed to determine the salaries and allowances. Clause 14 sets out provisions relating to substantial increases in financial penalties for members who are absent from the House without permission, with deductions starting after 3 days’ absence—I think Mr Mallard called it the “Chris Carter clause”—and clause 14A introduces a financial penalty for members who are suspended from the House. The clauses covering financial penalties for members suspended are new and they reflect a recommendation that was made by the Standing Orders Committee.

I want to make just a very brief contribution to this part of the debate on the Members of Parliament (Remuneration and Services) Bill, because I do not think that Part 2 changes a huge amount with regard to the way members of Parliament are paid. The most substantive provisions are the AWOL provisions—so, basically, those are for members who are absent without leave. As a former whip I did discuss this with my caucus colleagues, of course, and suggested that, in fact, this clause did not go far enough. They did not approve of my microchipping idea, which I thought might help, or ankle bracelets, which was the other option that I thought could be a useful contribution in the Committee. They did not think that that went far enough, or maybe they thought that I was going a bit far.

I think that this is actually a really important provision. It is important that we have very good rules within the parliamentary Standing Orders for members to be absent from the House for legitimate parliamentary reasons. If members are absent without legitimate parliamentary reason and without leave, then there is actually very little the Speaker can do about it. I think that we became very aware of that over the last couple of terms of Parliament, and the only really substantive change that Part 2 of this bill makes is to give the Speaker the ability to do something about it. So I think that it is a very welcome addition.

Can I first of all acknowledge the Minister in the chair, the Attorney-General, and say that it is admirable to have such a high level of education and understanding about so many matters of the world but still be able to speak in language that the rest of us can understand. It is such an admirable quality. Very few people in that position have it.

I want to make a brief contribution to Part 2 of the Members of Parliament (Remuneration and Services) Bill as well. One of the debates at the Government Administration Committee was about not just the role of the Remuneration Authority but also the size of it and the competency of the members. It was not in any way to challenge the competency of the existing members but, really, to look at what mix of skills might be required on the Remuneration Authority. It is my recollection that the select committee made a small amendment to it by lopping one of the proposed new members off it and retaining it at the current size. I think that was a good decision.

I share the view of my colleague who has just resumed his seat, Chris Hipkins, that we should have a much higher level of penalty on members of Parliament who have been elected to be representatives either of their constituency or of their party and do not bother to show up in the House. I find that immensely frustrating. All of us, of course, would like to stay in our electorates or in our home areas at various times. But being in Parliament—and not just being here physically but actually being a participant in Parliament—is why we were elected, we should always face up to that being a fundamental part of our responsibility.

The previous regime let us off far too lightly, and I think that we could actually go a little further than this bill, but it is a good step forward in the right direction. As for the idea of microchipping members of Parliament and having GPS trackers on us—what harm would be done? I am sure it would provide other members of Parliament and—[Interruption] It would certainly provide the media, with a lot of additional copy to prepare, I am sure.

But, on a serious note, members of the public know that we get very well paid for the role we undertake as their elected representatives, and the very least we can do is make sure we turn up at the appropriate time. So we have a penalty provision for people who do not show up but do not have a legitimate reason—and, of course, there are reasons that are legitimate when a member of Parliament might not be physically in the Chamber at any particular time, or indeed, in the precincts of Parliament—and we also have provisions for people if they are suspended from the House. I think that a deduction of salary is entirely appropriate, and I am very pleased that we introduced those stronger AWOL provisions.

I want to make just a brief call too on Part 2 of the Members of Parliament (Remuneration and Services) Bill. We also agree with the changes to the AWOL provisions—to the deductions. There is no point in having a rule if you cannot enforce it. If you cannot enforce a rule, then you probably need to change the nature of the rule. If we have a rule that says you have to be here, and if you are not here without leave, then you are in trouble, well, we may as well make it enforceable in some way, and a financial penalty is one of the ways to do that. We have got no particular problem with that.

I would also just note that one of the provisions in this part in clause 12 is the one that provides for 3 months’ pay for an MP who is no longer an MP as at polling day. It is an old provision. It is a transitional provision where MPs continue to be paid their salaries for 3 months after the election if they stand and are not re-elected. There is nothing new in this, but, again, it is one of those issues that perhaps the public are not aware of. I do not think that it is particularly unusual to have a transitional period like this for someone in a role like ours—I am open to other advice about that—but it does raise one of the issues for me, which is around former members’ entitlements.

We have discussed this at various times in Parliament. It is not part of this bill as such, but it does raise the issue that we have to be very careful that we do not continue with provisions that we do not need and that allow for MPs to be paid or given benefits well after they have finished their jobs. There is no other profession that I am aware of where a person continues to be paid, to gain, to obtain, or to use the same or similar benefits that they had from their employers when they were employed after they finish being employed. There are some justifications for this 3-month provision; there will be some concerns. We are supporting the bill with this provision in it, but it does, again, raise for me that we will need to discuss as a Parliament at some time in the future, and it is likely to happen sooner rather than later, the issues around former MPs’ entitlements and how they can continue to be justified.

I would also just like to pay note to Brendan Horan’s proposed amendment. We have looked at this, and there are differing views from the Green MPs on this. One of the concerns—and this is a concern that I have around this Supplementary Order Paper 368—is that if we are to say that the Remuneration Authority is genuinely independent from political interference and that we do this because we want to have someone quite independent and separate from us making decisions about our salary and allowances, then every time we make a change to the law that gives the authority some kind of instruction or guideline are we doing so for political purposes as opposed to practical ones? Is there a genuinely good reason why, beyond our own political interests, we would be asking the Remuneration Authority to do something differently from what it currently does?

I would note that the Greens made a change, and had a change pass through this House, for the Remuneration Authority to give consideration to the financial circumstances of the country as a whole. This was just before or around the same time as the global financial crisis. So we have been involved in some of these discussions in the past where the issue is to what extent this is a political issue that we are asking of the Remuneration Authority and to what extent it is a legitimate process issue that we are asking of it. I am very reluctant to support any changes or requirements that we might place on the Remuneration Authority where there is a political interest in doing so because, again, it becomes another means by which we can impose political influence over the decisions of our pay and allowances.

The other argument for this Supplementary Order Paper, though in favour of it, is the practical reality, which is that MPs’ salaries and allowances are political issues and that there is a great deal of political interest in what they are, how they are set, whether they go up or down, and how they do or do not relate to the minimum wage and the average wage. It is absolutely true that there is no process in New Zealand for protecting and raising minimum wages like there is for protecting and raising higher incomes. So we have this enormous inequity not only in pay but also in the way that pay is set. We had the Higher Salaries Commission, which did that work for those on higher salaries. We now have the Remuneration Authority, which will be doing this work for MPs. We have nobody, no agency, whose job it is to look at the viability and the value of the lowest wages in New Zealand. That is actually a political decision made by the Prime Minister. The Prime Minister essentially sets the minimum wage. So we do have a significant discrepancy in the way that wages and salaries are managed for New Zealanders, and that has to change.

The Green Party has proposals for how to change that so that it is more equitable and so that we can close the gap between the lowest paid and the highest paid. That is one of the political issues that are buried in the instructions that we might give the Remuneration Authority about setting wages and salaries. So, understanding that there is severe inequity in this country between the wages of MPs and others on high salaries and the lowest paid, that there is inequity in the way that wages are set for those two communities, and that there is a great deal of political interest in the decisions that are made about MPs’ salaries, should it, then, occur only once every term? Is that one way of taking out the political heat on issues of MPs’ salaries, and of giving the Remuneration Authority the power to limit how often MPs’ salaries might go up? They tend to go up; they would never go down. I do think that Parliament and MPs do have a political interest in having the Remuneration Authority limited in its ability to increase MPs’ wages, because of the public concern about those increases. None the less it is a reasonable tool to give the Remuneration Authority some indication that it needs to take some of these things into account too.

So, on balance, we will be supporting the Supplementary Order Paper. We think that it is a tool that the Remuneration Authority can use. It does deal with some of the heat in the issue around MPs’ salaries and allowances. It does not deal with the inherent inequity in pay. It does not deal with the inherent inequity in structure that means that MPs’ pay and the pay of highly paid New Zealanders—highly paid public servants, for example—are protected, whereas the minimum wages of those on the lowest incomes are not. That is another discussion that is still yet to be had. Thank you.

We are debating Part 2 of the Members of Parliament (Remuneration and Services) Bill. Part 2 of the bill—clauses 9 to 15—is entitled “Salaries and allowances of members of Parliament”, and it starts off, importantly, by stating that the Remuneration Authority determines the salaries and allowances of members of Parliament. I have Supplementary Order Paper 368, which I would like to address. It inserts new clause 9A and would address the practice, not required by law, of the authority giving MPs a pay rise every Christmas. It may be nice but is it fair? Is it justified? What new clause 9A will do is this. The Remuneration Authority will set the pay rate for MPs before each general election, and that pay rate, that determination, will apply for the full 3-year term of Parliament. MPs’ wages will be fixed for each term of Parliament if that amendment is adopted.

Last Christmas, in December, I promised that I would put forward an amendment in a bid to get Parliament to agree that salaries would be set by the Remuneration Authority before the next election. This keeps that promise. Three weeks ago I wrote to all parties in Parliament seeking their support. Quite honestly, I cannot understand why anyone would vote against this. If adopted, the new law would still require the Remuneration Authority to independently set the salaries of MPs. The difference is that the determination would be published about 3 months before the election. That way every candidate running for Parliament and all the voters will know the remuneration of MPs for the next 3 years. Voters will choose their MPs and we will have an end to the spectacle of Christmas back-pay bonuses.

A commentator said that unless MPs enjoy the annual self-flagellation they go through, they should vote for this Supplementary Order Paper. He went on to say: “Some MPs may be reluctant to support this amendment, because it is from Horan.” I do not know that particular commentator very well at all, but I would say that that would be very short-sighted and cutting off the nose to spite the face. Certainly, I would appeal to every party, every member here, to support this Supplementary Order Paper. We are elected for a fixed term of 3 years. None of us can be certain that we will be returned in November 2014. Yes, I will be a candidate at the general election, and I may or may not be back. I would say to the honourable David Bennett and the honourable Mark Mitchell that they cannot take for granted the green leather that they are seated in over there. It is up to the voters to exercise their judgment, and those members might not like the verdict of the public this time next year. We are here on a fixed-term contract, and it is appropriate that the voters and the candidates should know before the election what the pay is going to be. It is called openness and transparency.

Last Christmas we had the shameful treatment of KiwiRail’s safety maintenance crews, where they lost their jobs and were made redundant. And we had the ridiculous situation where a train driver from Veolia Transport Auckland fell through rotting sleepers in a track. Being made redundant is not fair, and it is certainly not fair that workers are being made redundant at Christmas and then hearing that MPs are getting a pay rise. It sticks in the craw. I found that out last year, as we all did, and I would hate to think that it would happen again. Thank you.

The question was put that the amendments set out on Supplementary Order Paper 389 in the name of the Rt Hon John Key to Part 2 be agreed to.

Amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 368 in the name of Brendan Horan to Part 2 be agreed to.