Legal Beagle by Graeme Edgeler

Read Post

Legal Beagle: MPs' Pay

35 Responses

First ←Older Page 1 2 Newer→ Last

  • Matthew Poole,

    How many mid-term-elevations of list MPs have occurred? It can't be many, but I'm curious how many people have been paid illegally.

    If you haven't yet sent it in, the last paragraph of "Deductions from Suspended Members", second line (as formatted here) says "at lease" when you mean "at least".

    It would be nice if salaries were indexed to the median income, but as a feedback measure it loses its power if it doesn't take effect until the following term. I like the idea of Key et al having their pay cut as a consequence of their presidency over a decline in the median income.

    The pit from whence crawl… • Since Mar 2007 • 3889 posts Report Reply

  • Graeme Edgeler, in reply to Matthew Poole,

    How many mid-term-elevations of list MPs have occurred? It can’t be many, but I’m curious how many people have been paid illegally.

    I count 22 [via Wikipedia].

    Wellington, New Zealand • Since Nov 2006 • 2988 posts Report Reply

  • Deborah,

    I like the three year salary setting proposal, but I think it ought to be inflation adjusted, or adjusted by a percentage increase that is no more that the increase in the CPI over the previous year. Rounded down to the nearest 0.5%, perhaps.

    Manawatu City • Since Nov 2006 • 1296 posts Report Reply

  • Matthew Poole, in reply to Deborah,

    percentage increase that is no more that the increase in the CPI over the previous year

    The mean for the parliamentary term during which it is set would be better, since that gives a longer-term metric. After all, if we'd used 2009 as the benchmark year there would've been some pretty nasty CPI figures whereas if it'd been for 2007-2009 it would've been more moderate. If the pay is being set for a term, it's only fair that CPI movements be averaged across a term.

    The pit from whence crawl… • Since Mar 2007 • 3889 posts Report Reply

  • James Butler,

    I’d be interested to know how well an “inflation adjusted” figure would correspond to what we actually expect politicians to be paid over the long term; ie. if salaries had been inflation adjusted from some point in the past, would they have ended up where they are now? The appropriate pay for an MP is a very subjective judgement, and it would be good to know how well a formulaic approach would capture that.

    A simple experiment* would be to chart actual MP salaries against an inflation-adjusted value starting as far back as we have good data for. You’d have to assume that on the whole, like on a scale of decades, MP salaries do track public opinion; but it would be interesting (for certain values of interesting).

    *Not volunteering (:

    Auckland • Since Jan 2009 • 799 posts Report Reply

  • Graeme Edgeler, in reply to James Butler,

    I’d be interested to know how well an “inflation adjusted” figure would correspond to what we actually expect politicians to be paid over the long term; ie. if salaries had been inflation adjusted from some point in the past, would they have ended up where they are now?

    In 2012 CPI-adjusted dollars, I have quickly been able to determine the follow data points:

    1892: $44,700 (first salary)
    1944: $39,600
    1951: $51,700
    1961: $61,500
    1964: $81,300
    1978: $105,800 (the first calculated under the current scheme)
    2012: $141,800

    A number I quickly calculated from data I/S provided in a post suggested a mid-80s salary at ~$99k.

    These are all basic salary component only, ignoring allowances, which are effectively salary, and other support.

    edit: ref: http://www.oag.govt.nz/2001/salaries/appendix1.htm and http://www.rbnz.govt.nz/statistics/0135595.html

    Wellington, New Zealand • Since Nov 2006 • 2988 posts Report Reply

  • Matthew Poole, in reply to Graeme Edgeler,

    Next stop, comparisons to the median wage where data is available. Although I'm unimpressed by how much MPs' salaries have grown even within my adult lifetime, I'm even less impressed by how divorced they are from the incomes of ordinary people.

    The pit from whence crawl… • Since Mar 2007 • 3889 posts Report Reply

  • Graeme Edgeler, in reply to Matthew Poole,

    Next stop, comparisons to the median wage where data is available.

    The Reserve Bank calculator to which I linked includes an option where you can measure wage increases instead of CPI increases. The $18,000 from 1978 becomes $122,500 in 2012 wages.

    Wellington, New Zealand • Since Nov 2006 • 2988 posts Report Reply

  • HenryB,

    The $18,000 from 1978 becomes $122,500 in 2012 wages.

    If we go use 1978 Q1 and compare with 2012 Q1 it comes out at $131,500

    Palmerston North • Since Sep 2008 • 106 posts Report Reply

  • Graeme Edgeler, in reply to HenryB,

    If we go use 1978 Q1 and compare with 2012 Q1 it comes out at $131,500

    I used Q3 in each my calculations: didn't want to overstate result, and knew that now, at least, pay upgrades for MPs take effect in the second half of the year.

    Inflation was kinda high in the 70s, huh?

    Wellington, New Zealand • Since Nov 2006 • 2988 posts Report Reply

  • JackElder,

    Typo, first para: "I think the Committee for the opportunity..." - should be thank, presumably.

    Wellington • Since Mar 2008 • 708 posts Report Reply

  • Graeme Edgeler, in reply to JackElder,

    Typo, first para: “I think the Committee for the opportunity…” – should be thank, presumably.

    They’ll figure it out :-)

    Given most submissions they get, I don't think they'll mind too much...

    Wellington, New Zealand • Since Nov 2006 • 2988 posts Report Reply

  • Rich of Observationz,

    I'd suggest that list MPs who enter parliament mid-term as replacements *were* returned at an election - the general election that decided the composition of the Parliament.

    The new MP will have been on a party list. That party got enough votes to elect a number of list MPs. When the original incumbent left, they were replaced by the new MP. That's a continuation of the electoral process that started with the election.

    Given that parliament's intention was clearly that all MPs should get paid, I'd suggest that notwithstanding sloppy drafting, it's legal to pay list MPs joining at mid-term.

    Back in Wellington • Since Nov 2006 • 4356 posts Report Reply

  • Graeme Edgeler, in reply to Rich of Observationz,

    I’d suggest that list MPs who enter parliament mid-term as replacements *were* returned at an election – the general election that decided the composition of the Parliament.

    That's one interpretation, but the consequence of it is that such MPs are entitled to back pay to the beginning of the Parliament.

    Given that parliament’s intention was clearly that all MPs should get paid, I’d suggest that notwithstanding sloppy drafting, it’s legal to pay list MPs joining at mid-term.

    That may have been the point of the Civil List Act in 1979, however, when we adopted the Electoral Act 1993, that section wasn't amended in a way that covered replacement list MPs. It was a clear oversight, but the usual remedy for such oversights is that Parliament fixes the law up; it doesn't pretend it has been!

    Wellington, New Zealand • Since Nov 2006 • 2988 posts Report Reply

  • chris, in reply to Matthew Poole,

    Inflation was kinda high in the 70s, huh?

    for sure.

    In 1975 the average weekly wage was $95 per week (equivalent to around $850 per week in 2012). This rose to $157 per week by 1979

    Next stop, comparisons to the median wage where data is available.

    1978 MP salary $18,000 divided by average hourly wage (1979)$4.52= 3982.3 hrs
    1979 MPs= 92 population=3137800 rep 34106
    2012 MP salary $141800 divided by average hourly wage(2012)$26.92= 5267.5 hrs
    2012 MPs=121 population=4561000 rep 37694

    So roughly and all perks aside, an MP's value is now 1285.2 average working hours (32 weeks) more (24%), The average* number of New Zealanders represented by each MP being roughly 10% higher.

    中国 • Since Jan 2010 • 890 posts Report Reply

  • Graeme Edgeler,

    Hey! I won!

    Well, a lot of it, anyway.

    Wellington, New Zealand • Since Nov 2006 • 2988 posts Report Reply

  • BenWilson, in reply to Matthew Poole,

    It would be nice if salaries were indexed to the median income, but as a feedback measure it loses its power if it doesn't take effect until the following term. I like the idea of Key et al having their pay cut as a consequence of their presidency over a decline in the median income.

    Word. Inflation adjustment isn't enough. They should be pegged to what the middle is earning, and if they want to also get inflation pegging, then they should achieve that by inflation pegging the median income, or taking steps for that to be what happens in practice, anyway. Then their interests are aligned with the people they represent. The median income should include people who earn nothing, so that they are further incentivized to reduce unemployment, as well, or perhaps to raise benefits.

    Auckland • Since Nov 2006 • 8305 posts Report Reply

  • Craig Ranapia, in reply to BenWilson,

    Word. Inflation adjustment isn't enough. They should be pegged to what the middle is earning

    No - it would be infinitely more amusing if MP's salary hikes were pegged to those of the education and healthcare workforce. You know, the people who are constantly being told to show "wage restraint" in these difficult, austere times.

    North Shore, Auckland • Since Nov 2006 • 11783 posts Report Reply

  • Brent Jackson, in reply to BenWilson,

    The median income should include people who earn nothing, so that they are further incentivized to reduce unemployment, as well, or perhaps to raise benefits.

    This won't work. The median income (by definition) is the middle value. Any movement in the bottom values (eg minimum wage earners and unemployed) will make no difference unless they go past the middle value. For example, if all the unemployed got jobs that earned less than the median income, there would be no change in the median income.

    You could use average income (ie mean), but then they'd be rewarded for making rich people richer, which pretty much happens automatically anyway.

    Perhaps a combination would work best, such as the average of incomes excluding the upper quartile (ie the average of the incomes of the bottom 3/4 of the population).

    Auckland • Since Nov 2006 • 383 posts Report Reply

  • linger, in reply to Brent Jackson,

    I could be wrong, but I read Ben’s point as being that the median income (for the purpose of calculating politicians’ salaries) should be calculated across all potential wage earners, including the unemployed, rather than excluding the unemployed. Which will make some difference to the median, as the salary corresponding to the 50th percentile will be shifted down in rank by (roughly) half the number of unemployed.

    But still, you’re right, such a calculation base doesn’t then incentivise MPs to bring about any increase to the salary of the bottom 50%.

    Hmm… The most direct way of incentivising policies leading to increased income equality would be to index changes in politicians’ wages inversely to changes in the standard deviation of the income distribution.

    Tokyo • Since Apr 2007 • 851 posts Report Reply

  • Rich of Observationz,

    You don't think that Paliament would just be peopled by more Key/Banks types who are so wealthy they don't even bother to open their wageslips?

    Back in Wellington • Since Nov 2006 • 4356 posts Report Reply

  • linger, in reply to Rich of Observationz,

    And indeed, there's the rub. It's hard to incentivise MPs to do anything for the general public when they perceive themselves to be so far removed from it.

    Tokyo • Since Apr 2007 • 851 posts Report Reply

  • Sacha,

    Informing the public how wealth and income are spread around would be a great start. Most of us have no idea what the median wage is, or who owns assets.

    Ak • Since May 2008 • 16263 posts Report Reply

  • BenWilson, in reply to Brent Jackson,

    This won’t work. The median income (by definition) is the middle value. Any movement in the bottom values (eg minimum wage earners and unemployed) will make no difference unless they go past the middle value. For example, if all the unemployed got jobs that earned less than the median income, there would be no change in the median income.

    That's true enough. But it would be hard to imagine that all the unemployed getting jobs wouldn't put upwards pressure on the median. It's an improvement on a mean, anyway, in which super high incomes at one end drag up the whole. Even better would be a measure of deviation from some ideal curve, although what that curve is, I don't know. My ideal curve is a flat line, but I'd say most people don't see it that way - they'd say that some difference between rich and poor should still exist as an incentive for ... um....something.

    Auckland • Since Nov 2006 • 8305 posts Report Reply

  • linger, in reply to BenWilson,

    The distribution doesn’t have to be normal for a target of reducing the standard deviation to work well enough for this purpose. Though that doesn’t by itself guarantee that the “typical” wage won’t decrease relative to the cost of living.

    But the bigger problem may be convincing parties to find, and to field, enough political candidates who have both (i) principles favouring income equality, and (ii) the ability to communicate those principles.

    Tokyo • Since Apr 2007 • 851 posts Report Reply

First ←Older Page 1 2 Newer→ Last

Post your response…

Please sign in using your Public Address credentials…

Login

You may also create an account or retrieve your password.