Remuneration Authority (Members of Parliament Remuneration) Amendment Bill (No 2)

I move, That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill (No 2) be now read a third time.

The Government has been clear that the recent increases to member of Parliament salaries have been unacceptably high and that there is an urgent need to improve the system and restore the ability of the Remuneration Authority to adjust MPs’ salaries. This bill is the Government’s response. It amends the Remuneration Authority Act 1977 and the Members of Parliament (Remuneration and Services) Act 2013 to establish a new process for how the authority sets the salaries of members of Parliament.

I would like to thank colleagues from across the House for their support of this bill at all stages, and I’d also like to recognise the members of the Education and Workforce Committee for the speedy and efficient way in which they dealt with the bill and the small number of submitters that we had on the bill and thank the members of the committee for returning the bill to the House with no proposed amendments.

This bill will ensure that MPs’ future salary increases are reasonable and justified. It enables the Remuneration Authority to use their discretion in setting MPs’ pay and strikes an appropriate balance with the use of public moneys. I commend this bill to the House.

Mr Speaker, thank you very much. I plan only to take a very brief call on this, because there is much more important business for the House to do, but I do want to just briefly traverse some of what’s happened that has allowed us to get here today. Colleagues will remember that in the previous Parliament—actually, over the nine years—there were a number of occasions when the country was in recession. New Zealanders were finding it very, very difficult, and the Remuneration Authority, with their independence, decided to set MP salaries much higher than many would say was reasonable—in fact, anybody would think was reasonable. They did this because the criteria they were given allowed them to look at a comparable profession in the private sector and their view of what that should be remunerated as.

Colleagues will remember that when we first came into Government more than nine years ago, we too set aside an increase because we didn’t think it was reasonable and fair. In 2015, the Remuneration Authority came forward with a 5.5 percent increase to MP salaries—very, very different than many would expect and certainly different than was acceptable to the House. At that time, a change was made and legislation was put through the House that all parties—I think except for the Greens—supported, and what that did is it tied the increase for members of Parliament’s salaries to that of the average of the public sector. What that meant is, as the public sector had increases, or didn’t, as the case would be, MPs’ salaries were tied to that, and in place of that, the increases were much, much lower—significantly lower, of course, than that 5.5 percent.

Earlier this year, the Remuneration Authority announced that under that formula of the average of the public sector increase in the previous year, MPs would get a 3 percent increase, and the Government decided that that was too large and that it should be set aside. In place, a new system has been developed that is now before us in this bill which reverts to the old system previously, where the Remuneration Authority will make the decision with, really, one additional criteria around fairness and acceptability.

National is supporting this, as we have previously, through all stages. It is something that we think needs to be sorted out, but once and for all. I don’t think it is the best use of this House’s time to always be looking at the system to pay members of Parliament. The idea that it is independent I think is an important one, but when it is independent and we don’t like the decision of that independent authority, it makes it confusing for the public. I do fear—and I hope it isn’t the case, but I do fear, in reverting back to this old system, the system that delivered a 5.5 percent proposed increase for MPs in 2015, that as a party in Government we set aside, that we don’t again see that, because if we do, the Government of the day will be back in the House saying we need to change the system again.

There is one change, though, that I think is very important. It’s something that I and others in National have advocated for: that, actually, rather than having this discussion and this debate every year in this House and in the public and with our constituents, it will be a decision the Remuneration Authority will make on one occasion for a three-year period, for that term of Parliament. I think, indeed, they will make that just after the parliamentary election. I can understand that. It will be done once; it will flow through for three years. My personal view is, actually, before an election would make sense, then all MPs and candidates and the public would know what was happening, what they were campaigning on, what they were voting on, and then it would move forward. However, it is done independently, it is set for a three-year period, and National will be supporting this.

Final point is that without any exception, I am yet to see a member of Parliament in this House, in my 11 or 12 years here, who I believe comes here for what this delivers, which is a financial reward. I do believe members of Parliament come here to represent their communities, their constituents, and to work hard to make New Zealand a better place. That’s why I hope all parties in this Parliament can support this legislation so we can have clear-cut rules that the public can have confidence in, that they will be independent and remain independent. I say to the Government: if the Remuneration Authority, using this new legislative authority that they have, do come forward with a larger increase, well, actually, we have discussed that here today, and we can’t keep changing this system. We have much, much more important work to do. Thank you.

Bill read a third time.