Ex-MP Mike Sabin included in salary payout

Deputy Prime Minister Bill English's base salary will change from $303,900 to $320,800. Photo / NZME.

Remuneration Authority gives 5.5% pay rise to politicians backdated to last July.

Former MPs including Mike Sabin are set to get a farewell present from the taxpayer after a 5.5 per cent backdated pay rise was announced by the Remuneration Authority.

The authority's decision, released yesterday, means Prime Minister John Key will get a $23,800 increase in his base salary to $452,300, and Cabinet ministers' salaries will rise by $14,900 to $283,400.

Backbench MPs will receive a $8200 boost to their pay cheques, lifting their salary to $156,000 a year.

The pay rises are backdated to July 1, which means 25 MPs who are no longer in Parliament will get an extra lump sum of about $4000.

MPs who were not re-elected or did not stand were still paid for three months after the election.

Mr Sabin, who stood down in January "due to personal issues that were best dealt with outside Parliament", will get a slightly larger lump sum of nearly $5000 because he was a select committee chair until then.

Former National MP Claudette Hauiti, who opted not to stand again after she used her parliamentary credit card for personal spending, will also get the payment.

The authority's decision angered unions because it came after the minimum wage was increased by 50c to $14.75 this week. MPs will receive nearly $5 more an hour.

The authority said the increase was partly to compensate for a cut in travel entitlements. It also said it was concerned about the widening gap between ministers' incomes and the pay for comparable private-sector roles, such as chief executives.

Mr Key and Labour leader Andrew Little said MPs' roles should not be compared to the private sector. Most MPs said the pay rise was excessive or unnecessary, but did not say they would reject the higher salary.

Mr Key, who has repeatedly called for zero or smaller pay increases, said the rise had no justification given inflation of 0.8 per cent and average wage growth of about 2.5 per cent.

He said laws governing how MPs were paid might need to be reviewed.

Mr Little said Mr Key was crying wolf over his objections.

"The Prime Minister has been saying for five years that the pay should be frozen but he does nothing about it when it's in his hands to do something."

Mr Little said although the level of increase was in the hands of an independent body, the pay-decisions system was "clearly broken" when "low-income workers get 50c an hour extra because that's what the state says is good and then another branch of the state says MPs should get $9000 a year".

Green Party co-leader Russel Norman said MPs' pay rises should be matched to the median wage increase, which was $1300 in 2013/14.

Base salary changes

Prime Minister John Key:
$428,500 to $452,300

Deputy Prime Minister Bill English:
$303,900 to $320,800

Cabinet ministers:
$268,500 to $283,400

Leader of the Opposition Andrew Little:
$268,500 to $283,400

Backbench MP:
$147,800 to $156,000.