Most MPs resigned to their 1.4pc pay rise

16:00, Dec 24 2010

Prime Minister John Key urged restraint over the setting of politicians' pay this year but most MPs seem resigned to the boost in their salaries which, they are quick to point out, was decided independently.

Mr Key was consulted by the Remuneration Authority – the independent body that sets politicians' pay – and said given the circumstances restraint should be shown.

"He argued there should be a nil increase for MPs, or if there was any increase, it should be in the band of other public-sector pay settlements," a spokesman for Mr Key said.

The authority decided on a 1.4 per cent rise backdated to July and a one-off payment of $2000 to cover the decreased use of MPs' travel subsidy. The rise boosts Mr Key's salary to $400,500 and a backbencher's to $134,800.

The authority also signalled a further lump-sum payment was likely in the new year after the travel perk was scrapped.

Politicians have come under public scrutiny for the perk, which allows MPs to get a taxpayer-funded rebate of up to 90 per cent on international travel costs.

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Former minister Pansy Wong resigned after it was found her husband conducted personal business on a trip partly funded with the perk. ACT leader Rodney Hide was criticised for using the perk to take his girlfriend – now his wife – on holiday and this week independent MP Chris Carter cancelled his summer holiday to Sri Lanka after media scrutiny about his use of the subsidy.

Speaker Lockwood Smith said he would scrap the perk, but that won't be official until the new year. It was widely expected MPs would get a salary rise once the perk was scrapped because the Remuneration Authority takes it into account when setting their pay rates.

Labour leader Phil Goff did not want to comment yesterday on the pay rise because it was up to the independent body to set politicians' pay, a spokeswoman said.

ACT MP Heather Roy agreed it was important for the decision to be independent but said she could see why some people were upset at the news.

"It's not for us to decide for ourselves what our salaries should be. There's never a way to satisfy absolutely everybody. I can see why some people would be grumpy but every year since I've been an MP whenever a pay rise has been announced there has been grumpiness from some people."

She had not thought about what she would do with her pay rise and had not realised it would be backdated to July.

Revenue Minister Peter Dunne said the timing of the decision was not the best. However, it was an independent decision.

"You can't have it both ways. You can't say that this should be taken out of MPs' hands and set by an independent authority and then quibble when they do."

He would accept the rise.

The Dominion Post