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Peter Wilson: MPs Get The Raw End Of The Salary Stick

Contributor:
Peter Wilson
Peter Wilson

MPs have had a torrid time in recent weeks. First there were thousands of documents detailing ministerial credit card spending which landed several in trouble, two of them seriously, and last Thursday a report was released by the independent watchdogs who check the way Parliament spends taxpayer money.

Among other things, it recommended changes to the way MPs' allowances and entitlements are handled.

On Friday morning, talkback radio was going berserk.

The report had collapsed into a single issue: MPs were going to get a 10 percent pay rise.

Outraged callers were beside themselves. It was the scandalous old "snouts in the trough" behaviour -- and they were doing it while everyone else was being told to tighten their belts and the Government was saying it was strapped for cash.

What the report actually said was this:

"We see no good reason to retain the international travel rebate in its current form. None of the other jurisdictions we examined provide international travel entitlements for MPs or their spouses/partners for personal purposes.

"If the remunerative aspects of travel entitlements were incorporated into MPs' salaries, there would be an approximate 10 percent increase in MPs salaries (on average) but no change in MPs' total remuneration (as the subsidies for private travel would be discontinued)."

That's it. "No change in total remuneration". But the Parliamentary Appropriations Review Committee had opened an old can of worms.

Those travel entitlements, rebates of between 25 percent and 90 percent on international travel depending on length of service, go back to the 1970s.

MPs of that era, considering they should be paid more than they were getting and that there should be some sort of increase for those who had been around for several terms, didn't want to incur public wrath by giving themselves a pay rise so they thought up the international air travel rebate.

It has been part of the deal ever since. If it is considered in lieu of salary, then taking it away would cut their pay.

At the time it was introduced there was far less transparency around MPs' spending. Today it is a noose around their necks, tightened every time disgruntled voters feel like stringing them up.

It would be a fairly safe bet to say nothing is going to happen. If they wanted a 10 percent pay rise instead of the travel perks they wouldn't take it because they know the trouble they would land in if they did.

And it isn't likely those talkback radio callers would see it any differently to the way they did on Friday.

It would also be difficult to work out how to do it and end up with that "no change in total remuneration" proviso because MPs don't all use the entitlement to the same extent. Some make the most of it and others don't use it at all.

And if they did get a 10 percent pay rise, they would pay tax on it at 38 cents in the dollar which they presumably don't when they get cheap flights.

A much more realistic recommendation, which was lost amid the 10 percent pay rise fiasco, was this:

"MPs should consider whether it is appropriate for them to continue to be involved in determining the benefits they receive.

"MPs' entitlements and allowances are determined largely by the Speaker on the advice and recommendation of the Parliamentary Service Commission. By way of contract, an increasing number of Parliaments with whom the New Zealand Parliament might be compared have moved or are moving to have the allowances and entitlements of MPs determined by an independent body."

The Parliamentary Services Commission is made up of representatives from each of the parliamentary parties, chaired by the Speaker.

This recommendation has been made before, and for years it has been resisted.

Initial reaction to Thursday's report is that they will think about it, and after the beating they have taken over the past few days maybe they will think it is time to get this particular monkey off their backs.

They should have done it long ago. Their salaries are determined by an independent body, the Remuneration Authority, and MPs' hands are clean. They still get some stick when the authority recommends pay rises, and during the recession they decided not to accept a pay rise. Parliament even passed a resolution to that effect and changed the rules so the authority could consider economic circumstances when deciding their pay levels.

Prime Minister John Key, who doesn't use the travel perk, or any others as far as we know, and Speaker Lockwood Smith have been instrumental in opening up parliamentary spending to public scrutiny. They could be instrumental in passing allowances and entitlements to an independent body.

Even if that doesn't happen, sunlight is having a powerful effect and the scrutiny of their spending is making them think carefully about how they use their credit cards and their entitlements.

No MP wants to feature in the "Top 10 Big Spender" list now they know it is going to be regularly published, and Key constantly urges constraint upon his ministers.

MPs have been unfairly vilified over the report's recommendations -- and they are just that, it isn't an edict that they get a 10 percent pay rise -- but now it is in their own hands to finally clean up their act.

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