Hipkins Chris: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — First Reading Second ReadingText is incorporated into the Bound VolumeHipkins Chris: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — First Reading Second Reading[Sitting date: 17 March 2015. Volume:704;Page:2278. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka): I rise to speak on the issue of MPs’ pay with some trepidation. I think it would be fair to say there is not a single vote to be gained in this particular debate. I do not think anybody particularly enjoys these kinds of debates in Parliament. It would be fair to say as the chief whip of the Labour Party that I did not have a queue of MPs lining up outside my office door this morning wanting to speak on this particular piece of legislation and I do so myself with some trepidation.I want to say right from the very outset that I absolutely agree with the principle behind this legislation which is that MPs’ pay should not be out of step with what every other New Zealander is getting at the moment and I think that is an issue that has been spoken about for some time and it is absolutely high time that the Parliament address that so I am pleased that this opportunity has arisen. However I do have some significant concerns about whether the bill is going to actually deliver on that commitment. I want to make it very clear from the outset that the Labour Party will be voting in favour of this legislation and we will be voting in favour of it with all of the reservations that I am about to go through because voting against it would effectively be voting for the large pay rises that we are trying through this bill to decline. So we are going to vote in favour of this legislation but I want to make it clear that we have reservations.We have particular reservations about pushing this bill through all stages under urgency without any kind of proper process around it. The risk of getting it wrong is high in doing that. The risk that we will need to come back and fix it again is high but also the independence of the Remuneration Authority is compromised in the way this bill has been introduced and in the way it is being pushed through. Interestingly by pushing this bill through under urgency through all stages in the way we are today the Remuneration Authority which issued the original determination that gave MPs the pay rises will not get the chance to have any contribution on this debate at all. So the Remuneration Authority will not have the opportunity to come up to the Parliament and say: “OK if that’s what you’re trying to achieve this bill won’t do it.” It will not have that opportunity. So we have no external verification that this bill is actually doing what we want it to do which is that we wanted to ensure that our own pay does not get out of step with the rest of the country. We have no guarantee of that. So although we are supporting it because we want to deal with the immediate issue the long-term issue may well still remain.There have been numbers flying everywhere from different parties different bloggers all of whom come up with a different set of calculations that may or may not demonstrate that over the longer term this bill could give us a lower pay rise or a greater pay rise. There are numbers flying around about various proposals to amend the bill that may or may not give us a lower or a higher pay rise. That is one of the problems with pushing a bill through all stages under urgency in the way this bill is being pushed through today. We absolutely support the principle of the bill but we are not convinced that it is going to be actually delivered on by the words that we have in front of us at the moment.We have had 5 years to deal with this. The Government has known since November that these pay rises were in the pipeline and likely to come up. Why has it taken until now until the pay rises have already been awarded and due to be paid into MPs’ bank accounts next week before we finally get legislation to deal with it? This should have been dealt with months if not years ago and then it could have been dealt with in a proper considered process where it would not be rushed through Parliament.I want to make it very clear that I am also quite uncomfortable at the idea that Cabinet the executive Cabinet sets the policies around MPs’ pay. That is why we have an independent body and the idea that Cabinet can overturn the decisions of the Remuneration Authority when it disagrees with it is bad. It is worrying from a constitutional perspective. I think it is right that Parliament takes another look at the criteria the Remuneration Authority uses but we have to accept that if we want these decisions to be made independently then that is what they are—they are independent decisions. Because here is the question: if it is OK in principle for Parliament to legislate for a decision that we disagree with when we think it gives us too much pay is it OK for Parliament to legislate for a decision that we disagree with that we think gives us not enough pay? Because that is the principle that is being established: that if the authority issues a determination we do not agree with we will simply legislate over the top of it. I do not think that is a good practice. I think it is right that we set clear criteria. It is absolutely right that at the moment the criteria are giving MPs pay rises that are out of step with every other New Zealand and therefore need to be checked and need to be addressed but I do not think it is right that Cabinet effectively mandates legislating over the top of an authority decision that we disagree with.I think this decision should have been taken long before that determination was even issued. For 5 years we have been talking about it. Any time in those 5 years this issue could have been dealt with. To some extent we have no choice now but to take the course of action that we are taking because the Government has dragged its heels on the matter. I think we should certainly give those matters some consideration and I hope at some point there will be the opportunity for some careful reflection on this to ensure that we do actually get this right for the future.I also want to make it clear to the Government that I do not see this and the Labour Party certainly does not see this in any way as a justification for supressing well-deserved and well-earned pay increases for those many people working in public sector jobs like teachers nurses and police all of whom are going to be making their claims to the Government through collective bargaining in this year’s pay rounds. It would be wrong for the Government to interpret our support for this legislation as a signal that we would support simply not increasing pay for people who have gone without pay increases for many many years while we have continued to enjoy them. That would be unfair. There are many in the Public Service—and when I say “Public Service” I mean that in the widest possible sense—who have done their bit who have tightened their belts who have gone without pay rises of any significance for quite some time and who frankly deserve them and I think it is wrong for the Government to try to say: “Well if MPs aren’t getting a pay rise they should not get one either.” That is not right. That is not fair and we are going to be monitoring that very carefully.With regard to the technical nature of the bill we will get into that further in the Committee stage but again I want to come back to that fundamental question of whether this bill is actually going to deliver on its objectives and whether in fact the calculation that is now being made is a fair one. This bill at its essence links MPs’ pay rises to the quarterly employment survey for public servants. The problem with using the quarterly employment survey as a measure is that that also captures people who move into different and higher-paid jobs or who move from part-time to full-time employment and those types of things that actually lift potentially the salary rises higher than they might otherwise have gone. It is not comparing apples with apples. If we were to look at some kinds of standard definitions of what is counted then that might make a difference but under the current formula there is real potential again that public servants moving up the Public Service hierarchy could therefore inflate MPs’ salaries and that is the very thing that we are trying to address with this bill. So there are a whole lot of technical issues in this that we are simply not going to be able to explore in the next 3 or 4 or however many hours it takes for Parliament to pass this bill through all stages under urgency.To recap this first contribution and to summarise the points that I am making first and foremost I do not think that MPs should be getting large-scale pay rises and I am pleased the Government is dealing with it. Second I think we need to be looking at an enduring solution that ensures that our pay—MPs’ pay—is not a subject that we spend time debating in this House but is determined independently on a clear set of criteria and I am not yet convinced that the criteria that this bill proposes are going to be the right ones that are going to deliver the outcomes that we are after. And third I think this process is flawed. It should not be being done under urgency—although now because the Government has left it so long we have no choice and so Labour Party members feel we are forced into the position where we have to support it. And related to that this should not be a Cabinet dictate; this should be based on an independent review. It should be determined independently and this is a very bad process.