The new law also provides for the Remuneration Authority to continue to compensate for the loss of any perks, such as travel and allowances. The personal benefit of those has traditionally been treated as part of their overall package and a one-off pay boost added when they are changed, as has happened with international travel rebates.
Labour's Annette King said Labour supported the changes but questioned whether it would guarantee lower pay increases. Green co-leader Metiria Turei raised a similar issue.
"The Government is scrambling to pretend that its making a meaningful change to MPs' pay, without really making a difference at all."
Ministers are also under scrutiny over another of their entitlements - the use of Crown limousines to campaign in Northland.
The limousines cost $68 per hour when the minister is using them - a total of $680 for a ten hour day. Yesterday Finance Minister Bill English estimated the cost of a rental car was about $100-$200 a day, but conceded he did not know the daily cost of the Crown limousines.
He will be using them when he visits Northland on Thursday, saying it was within the rules. Steven Joyce and Simon Bridges are also using the limos on the campaign trail.
Their use by National ministers for a byelection campaign has raised eyebrows, especially after National criticised Labour for using taxpayer funded flights for its leadership contest last year.
Prime Minister John Key yesterday said the two situations were different.
"The byelection is a legitimate point around democracy for the people of Northland. The Labour Party leadership was about the Labour Party."
Green co-leader Russel Norman said the use of the limos was an unfair advantage for National, which has long opposed state funding of political parties.
The Crown limos are one of the few taxpayer-funded resources that can be used without any ministerial purpose and other ministers have chosen not to use them. Paula Bennett has chosen not to use the limos for the byelection, instead choosing to travel with candidate Mark Osborne.
Yesterday she said it was up to others whether they did the same. Nikki Kaye also said she had driven her own car from Auckland up to Northland when she visited, partly because she was also driving volunteers up.
This is not the first time MPs have tried to peg back their own pay increases. In the 1980s, former Prime Minister David Lange limited pay rises to 10 per cent after the Highers Salaries Commission recommended 26 per cent.
Soon after that, Sir Geoffrey Palmer also threatened to sack the commission if it gave an excessive increase.
For years, some MPs have argued that other perks, such as international travel rebates, were compensation for declining big salary increases.
The perk was introduced in 1972 after Australian MPs were given subsidised travel to New Zealand. It was less generous and only applied to MPs who had served more than three terms.
From 1971 to 1974 MPs did take lower pay increases than they were offered, including refusing a 45 per cent increase in 1973 when there was a wage freeze imposed on other workers. In 1976, MPs took a significant increase aimed at making up some of the lost ground.
In the mid 1970s and 1980s the scheme also became more generous so spouses were included and MPs were eligible earlier. It was originally unlimited, but restricted to the value of first class flights to London and 12 domestic flights in 1977 after abuse of it.
In the mid 1980s that was reduced to business-class flights. A former MP, Stan Rodger, has said the perk was seen then as an acknowledgement of the long term impact that would have on MPs' superannuation as well as a reward for long service.
MPs in the 1990s, including Sir Douglas Graham, also argued they took lower increases at the time because of the perk. The Higher Salaries Commission agreed to a zero increase in 1992 and Cabinet ministers turned down a $4000 increase in 1993.
However, again generous increases were subsequently given to make up for lost ground.
The taxpayer spends about $1 million a year on that perk, which gives former MPs elected before 1999 and their partners up to 90 per cent off international flights up to a value of about $12,000 a year - the value of a return business class flight to London.
Former MPs also get two domestic flights a year. It is not available to MPs elected after 1999.
