Give MPs pay rise says Cullen

By EUGENE BINGHAM

Future pay rises for MPs may be linked to the average annual wage increase to curtail public outrage over politicians' salaries.

On a day when the country's parliamentarians learned that they would pocket as much as 7 per cent extra over the next two years, Finance Minister Michael Cullen said he wanted to shake up the way the rates were fixed.

Dr Cullen said rises should be indexed according to the average wage increase, rather than leaving it to the Higher Salaries Commission to determine what the 120 MPs took home.

"That would get this whole thing out of the annual argy-bargy that goes on," he said, reflecting the sensitivity felt by all MPs about the issue.

The commission, an independent body empowered by law to decide on salaries for MPs, the Judiciary and the Governor-General, yesterday set out increases for this year and next, backdated to July 1.

Prime Minister Helen Clark will earn an extra 2.8 per cent this year, putting her salary at $222,400. It will rise to $231,400 after July 1 next year.

Her deputy, Jim Anderton, will receive $165,200 this year and $173,300 next, while cabinet ministers such as Dr Cullen will enjoy a 2.8 per cent increase this year and 3.8 per cent extra next year, taking their earnings to $154,900.

Speaker Jonathan Hunt and Opposition Leader Jenny Shipley will bank the same amount as cabinet ministers.

Backbench MPs receive a 2.4 per cent increase this year, taking them to $85,000, followed by a further $2000 next year.

Since 1995, MPs have had six pay rises, two of those lower than the national average and the others higher.

Had the MPs been receiving the national average since 1995, they would now be getting $84,079 a year instead of $85,000 and the Prime Minister would be getting $218,808 instead of $222,400.

Dr Cullen said it was impossible for the commission to do its job properly because it could not set MPs' pay at the appropriate levels without "sparking riots."

If the Prime Minister was paid a rate comparable to the private sector she would be on $750,000, which was more like what was paid to TVNZ staff, said Dr Cullen.

He himself would receive $520,000. "I would probably have to read the weather forecasts at the weekends as well as during the week to justify such a salary.

"Clearly those sorts of sums are just absurd and ludicrous and couldn't be justified."

It would be much fairer if the rate were set automatically according to average wage increases, the way pensions were.

Dr Cullen's idea found favour with Mr Anderton, also the Alliance leader. Act leader Richard Prebble said he would be prepared to look at it.

A spokesman for National said the party was "pretty happy" with the present situation.

In its report, the commission noted that increases should be much higher than they were.

"The commission finds itself in an even more difficult position than in previous years. On the one hand it wishes to fairly reward the positions while at the same time it is all too keenly aware of the desire for restraint."

The Council of Trade Unions said the increases were not excessive but it hoped workers at the bottom end of the scale would enjoy similar benefits.

Employees who were getting rises generally received about 3 per cent, said CTU president Ross Wilson.

"What we need to ensure is that the low-paid in our workforce are not missing out on collective bargaining opportunities to reach fair increases in their pay, just as MPs have done."

Helen Clark said last night that her increase for this year was in line with the average, but she was not comfortable about the hike she would receive next year.

Last month, she said she would not accept an increase similar to the 9.5 per cent paid to public sector chief executives last year.

She also took a swipe at Reserve Bank Governor Don Brash for the 2.4 per cent increase that took his salary to $496,000, saying that while the rise was in line with the going rate, it came on top of a handsome salary.

Dr Brash had called for restraint from workers seeking rises.

Green MP Sue Bradford said she believed the MPs' increase should have been the same as that received by those on the minimum wage. She would donate half of her rise to unemployed workers' groups.