Editorial: Greens' pay push makes little sense

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Russel Norman suggests the use of the median income would overcome the drawbacks associated with the authority's use of subjective assessments. Photo / Mark Mitchell
Russel Norman suggests the use of the median income would overcome the drawbacks associated with the authority's use of subjective assessments. Photo / Mark Mitchell

The Green Party undoubtedly believes a policy that will mean smaller pay rises for parliamentarians is a surefire winner. How could it be otherwise when the announcement of the MPs' annual increase is always the trigger for widespread murmurs of resentment? On that populist level, the policy may gain traction. On any other level, however, it makes little sense.

The Greens would tie the rise in MPs' salaries to that of the median income in dollar terms. According to the party co-leader, Russel Norman, this meant the increase for the 2012-13 year would have been $780, not the $2800 decreed by the Remuneration Authority.

This link to the movement of incomes of "middle New Zealand" would, he said, be in line with MPs' "duty to be part of the solution to inequality".

Dr Norman suggests the use of the median income would overcome the drawbacks associated with the authority's use of subjective assessments.

This had created a situation where "MPs' salaries are linked to the private sector and those earning the most".

On those points, the Greens' policy goes awry. The authority's starting point for MPs is actually the payline for public servants doing jobs with broadly similar complexity and responsibility. Equally, the five criteria used by the authority in setting salaries make more sense and provide considerably more flexibility than a system based rigidly on one indicator.

Those criteria are a fair relativity with comparable positions, the need to be fair to both MPs and taxpayers, the requirements of the job, the need to recruit and retain competent people, and any prevailing adverse economic conditions. In terms of the final criterion, the global financial crisis played a recognisable role in MPs' pay. In one year, they received only a 1.9 per cent rise, while the average increase was 2.9 per cent. In the latest year, the authority's payline of 2.8 per cent was reduced to 2.2 per cent, again in acknowledgment of the need to restrain public sector expenditure.

Recruiting and retaining competent parliamentarians is also a valid concern. Many MPs accept that their salaries will decrease when they enter Parliament. The higher they ascend in politics, the greater becomes the discrepancy between what they earn and what they could gain in the private sector. The Greens' use of the median point would mean, effectively, that their salary increases were tied to the lower rungs of middle New Zealand.

That hardly appeals as a means of enticing the best and brightest to stand for Parliament.

The Greens are also aiming at the wrong target. People may question whether some backbenchers are worth their $144,600 salaries. But they are even more annoyed at MPs' travel and accommodation perks. The most recent development on this was the decision to keep travel within the hands of the Speaker.

This was unanimously agreed by all parties in Parliament.

The Greens would do better to demonstrate a willingness to tackle this sense of entitlement, rather than attack a procedure that is the responsibility of an independent authority.

As much was underlined by the response of the Labour Party leader, David Cunliffe. While his party and the Greens have got together on a number of issues, there is no unanimity here. "The primary principle is that MPs' salaries shouldn't be set by MPs themselves - the Remuneration Authority is the appropriate body to do it," said Mr Cunliffe.

He is right. The Greens may gain some applause from those who succumb easily to the politics of envy.

They will get none from those who value a fair, flexible and independent way of setting MPs' salaries.

- NZ Herald

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