MPs' Covid pay cut bites, three months after PM's promise

Author
Jason Walls, NZ Herald,
Publish Date
Sun, 26 Jul 2020, 2:01PM
Photo / Supplied
Photo / Supplied

MPs' Covid pay cut bites, three months after PM's promise

Author
Jason Walls, NZ Herald,
Publish Date
Sun, 26 Jul 2020, 2:01PM

MPs this week finally experienced the Covid-19 pay cut that the Prime Minister promised they would be taking in an act of solidarity more than three months ago.

The pay cut – 10 per cent for MPs and 20 per cent for ministers – officially took effect on July 9.

That's almost three months after Jacinda Ardern announced the six-month salary reduction would be coming into force.

But MPs only saw the pay cut hit their pay cheque on Wednesday this week, as that was the first time they had been paid since the policy was enacted.

And some politicians are already grumbling.

In a now-deleted Facebook post, Labour's Ōhāriu MP Greg O'Connor complained that his care was going to the mechanic on the same week of his 10 per cent pay cut.

The pay cut policy – which Ardern said was designed to "show leadership" – would save the Government $2.4 million.

Non-ministerial MPs, who were not party leaders or committee chairs, would take a 10 per cent pay reductions – seeing their pay drop to the equivalent of $147,565 a year.

Ministers took a 20 per cent pay cut – going from the equivalent of $296,007 a year to $236,806.

Winston Peters, the Deputy Prime Minister saw his pay shrink from the equivalent of $334,734 a year to $267,788 and Ardern's pay drops from $471,049 a year to $376,840 for six months.

According to Statistics New Zealand, the median income in this country is $52,000 a year.

During the level 4 lockdown, many companies across New Zealand announced their staff would be taking pay cuts – most of which took effect almost immediately.

But MPs are only just receiving theirs despite the fact Ardern made the pay cut announcement on April 15.

This is because the process of cutting MPs' pay is long and complicated, and involves many legal loopholes.

The Remuneration Authority, which is independent from MPs and Parliament, has the final say on pay levels.

A bill to made changes to the law governing MPs' pay had to be drawn up and voted on before any changes were made.

Asked about why it was taking so long to put the changes into effect, Dame Fran Wilde – the chairwoman of the Remuneration Authority – said there was a significant amount of work that had to be done.

The bill related to not just MPs, but also public sector bosses, mayors and councillors and that amounted to "many hundreds of people" receiving the pay cut.

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