MPs likely to get pay boost for the holidays

MPs are set to get a salary bump and a lump sum windfall in time for the summer holidays. Photo / Mark Mitchell

MPs are set to get a salary bump and a lump sum windfall in time for the summer holidays when the Remuneration Authority releases its review of their salaries tomorrow.

Prime Minister John Key, who has criticised the authority for hiking MPs' pay in the past, says he is comfortable with the increase.

Mr Key yesterday told TV3's Firstline the authority had told him what it was proposing.

"Pretty much every year they've written to me and recommended an increase and I've tended to write back and say don't do that and they delivered one anyway."

Mr Key said this year's recommendation was for "a small increase".

"It seemed to be pretty much in line with the national average, maybe slightly lower than that, and so I've written back and said in principle we're comfortable with that."

Quarterly Employment Survey data shows average pay increased by almost 2.9 per cent in the year to June.

Assuming the MPs' pay increase is "slightly lower" at 2.5 per cent, a backbencher's basic pay would increase by $3525 to $144,525. Mr Key's pay would rise by $10,275 to $421,275.

Any increase is likely to be backdated to July which at 2.5 per cent would mean a pre-tax lump sum of $1762 for backbenchers.

Last year, just days before the election, Mr Key said the authority's decision to give MPs a $5000 lump sum to offset the loss of travel perks was unnecessary and he was disappointed the authority had awarded it.