Change to MPs remuneration setting process

Minister for Workplace Relations and Safety Michael Woodhouse today announced Cabinet’s decision to change the process for how the Remuneration Authority reviews MPs pay.

“Today Cabinet agreed that the average annual percentage change in public sector pay, as measured by Statistics New Zealand’s Quarterly Employment Survey (QES), will from now on determine MPs’ pay rises,” Mr Woodhouse says.

“Using the QES public sector index means that MPs pay will increase in line with average public sector salary movements.

“The law change is expected to be passed under urgency with the changes coming into force later this week and 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.

“Previously the Authority had to take into account factors such as relativity to comparable positions, and the requirements of the job. With this change, the Authority will just need to annually apply the average QES index for the June year to the MPs’ total remuneration package.”

The Remuneration Authority will continue to have the ability to change the mix of cash and non-cash items in MPs’ overall pay.

This indexing of MPs’ salaries to the QES will be done at the same time every year, following publication of the June Quarterly Employment Survey.