Banking it on the bench

MATT NIPPERT
Last updated 09:58 01/12/2013

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Renumeration for the judiciary has come under the microscope, with revelations five of the country's eight highest-paid recipients of taxpayer salaries are judges.

Judicial salaries are padded nearly 40 per cent by a superannuation scheme described by Labour's Justice spokesman Andrew Little as "one of the most generous I've ever heard of".

The scheme, along with judicial salaries, is set by independent body the Remuneration Authority, and sees taxpayers contribute $7.5 for each dollar paid in by judges.

Contributions are capped at 5 per cent for High Court and Supreme Court justices, and 4.5 percent for judges serving in the District Court.

This scheme is considerably more generous than that available for members of Parliament, who receive $2.5 in top-ups from each $1 put in, and the general public contributing to KiwiSaver where three per cent employee contributions are matched equally by employers.

Sunday Star-Times calculations suggest the super scheme for judges costs taxpayers more than $22m annually.

Taking base salaries, the super scheme and expense allowances into account, and excluding public sector staff who received bulk payouts when leaving their jobs, last year justices of the Supreme Court occupied five out of the top eight places in a ranking of the highest-paid recipients of taxpayer salaries.

Chief Justice Sian Elias' pay package of $656,213 was only eclipsed by New Zealand Superannuation Fund boss Adrian Orr's $667,000 in earnings last year, bolstered by an $186,000 bonus when his multi-billion dollar fund delivered returns to the Crown of 25.8 percent.

The only other non-judges in the top eight are University of Auckland Vice- Chancellor Stuart McCutcheon (around $655,000) and Police Commissioner Peter Marshall ($645,000).

Even in the lower courts judges and justices rank highly on the list, with pay packets for those serving on the District Court ($406,019) and High Court ($548,725) comparable to or in excess of Prime Minister John Key's $428,500.

Andrew Little, cautious about breaching the line separating the legislature, expressed surprise at the total effective pay packets for the judiciary and compared them to those of chief executives of large organisations.

"It's generous, and irrespective how much we value the important work they do in court, and as part of our constitution, these would be some of the highest incomes for anyone in the country," he said.

The median annual income for New Zealand workers is $44,000.

A senior Auckland legal source said while the remuneration for judges appeared high, it paled in comparison with earnings in the private sector for top lawyers - from whose ranks new judges are recruited.

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The source said senior partners at large firms would probably earn more than $750,000 and annual earnings for barrister QCs were typically between $850,000 and $1.2m.

The source said he had considered joining the bench in his 40s, but a rise in public criticism of the judiciary, a likely drop in earnings and a need to remove himself from public life made such a move unattractive.

The revelations regarding the judges' high pay come after Minister of Justice Judith Collins last week took the unusual step of publicly criticising the District Court for what she described as "generous" long-term leave provisions that could see jury trials cancelled because of staff shortages. Members of the judiciary now get more than 11 weeks paid leave annually.

Ministers responsible for the judiciary and the justice system, Attorney-General Chris Finlayson and Judith Collins, this week both shied away from questions about judges' remuneration.

"It would not be appropriate for the minister to comment," a spokeswoman for Collins said.

"Respecting the separation between different branches of government, it would not be appropriate for the Attorney-General to comment," a spokesman for Finlayson said.

Even the spokesman for the judiciary, Neil Billington, declined to defend the super scheme or total pay packets of judges. "The judges themselves don't comment on their terms and conditions, as these are determined independently," he said.

Michael Arrington, chairman of the Remuneration Authority, explained the superannuation scheme was a hangover from an era when judges were entitled to a pension from the Government Superannuation Fund.

Arrington said the old scheme, now closed to new members, provided an effective boost to salary in excess of 30 per cent.

The authority's 2006 determination of the new scheme, however, expressed doubts over linking current policy to a relic of history: "However, it must be questioned whether a superannuation scheme which has been closed to new members since 1992 should continue to be a significant factor in determining parameters for ongoing judicial superannuation schemes."

Arrington said, despite these doubts, "they thought it was the fair thing to do," and the super scheme should be seen as part of a total compensation package.

"We need to ensure the job pays well enough, and has superannuation generous enough, not to allow corruption," he said.

- Sunday Star Times

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