MPs pay rises are set be linked to those received in the Public Sector after the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill passed its third reading in Parliament last night.
The bill went into its third reading with 106 in support and 14 opposed.
The Remuneration Authority recently awarded MPs a 3.56 percent increase and the bill was a response to this, as MPs felt this was out of proportion to inflation and other people’s pay rises.
The bill would effectively replace the Remuneration Authority’s decision linking MPs pay to the public sector salary movements. The formula would also take into account other factors such as travel allowances.
During the committee stage the Minister for Workplace Relations and Safety, Michael Woodhouse, said the bill would hold back MPs pay rises because the Government had placed stronger controls on public service pay.
He also says, “The changes will come into force the day after Royal Assent on the Remuneration Authority Amendment Bill is given and will be backdated to 1 July 2014. This means MPs’ overall pay rise for the year starting 1 July 2014 will be 1.5 per cent, rather than the 3.56 per cent announced by the Remuneration Authority.”
Green MP James Shaw also believed it would place an economic incentive on future MPs to increase the public sectors pay if they wanted to get higher pay themselves.
All parties agreed there was a need to restrain MPs salaries, but there was disagreement about the best way to go about it.
Other MPs say a better process should have been followed with a bill going through a select committee process. There was also concern raised over the salaries of senior public sector chief executives with many MPs saying they were out of control.
Earlier the second reading and committee stage were completed by 106 to 14 with the Greens opposing.