Hipkins Chris: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeHipkins Chris: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — Second Reading In Committee Third Reading[Sitting date: 17 March 2015. Volume:704;Page:2333. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka): That was a slightly shorter contribution from the Minister for Workplace Relations and Safety Michael Woodhouse than I was anticipating. I am happy to rise to do my final contribution in this debate on the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. I want to just first of all say that the mechanism that this House establishes for determining how MPs’ pay should be set is a very important one constitutionally. It is not good practice for Parliament itself to be voting on debating and setting effectively what the taxpayer should pay us for doing this job. It is important that we put in place a robust mechanism that removes those decisions from this House and places them with an independent body that can make those decisions rigorously and independently.I think the public of New Zealand would like to have that reassurance that in fact we are not here feathering our own nests and debating things that are going to be in our own best interests and that there is someone independent making decisions about what a fair rate of pay for members of Parliament should be. This is in fact an important issue. No one here is arguing for a significant pay increase at the moment but ensuring that MPs receive a sufficient and appropriate level of remuneration is actually important for the transparency and integrity of the democratic system of government. It is actually one of the guards that we have against corruption. Making sure that MPs are appropriately remunerated for the job that we do is one of the ways that the public of New Zealand and the taxpayer can have the reassurance that we are working for them and not for other people who are paying us and giving us money for the work that we do. The only way that the public can have the assurance that that is what is happening is when those decisions are made completely independently of this House and when there are robust criteria for doing so.It has been apparent for some time now that there were issues with the criteria that the Remuneration Authority had in determining what MPs’ pay should be and it is high time that the House resolved those issues. This is not a good process for doing that. We have had 5 years of concerns. We have had 5 years where the criteria could have been properly and appropriately amended without the need to resort to urgency. It is therefore unfortunate that we now find ourselves in this position where if we do not conclude this debate this week under urgency—through all of the bill’s stages—then MPs will get the significant pay increases next week that we are here tonight trying to stop from happening. That could have been avoided if this had been dealt with through a much better more rigorous and proper process. Unfortunately that has not happened and therefore urgency is the only way now to stop those pay rises going through and being in MPs’ bank accounts next week.We on the Labour Party side have listened very carefully to the debate and we have engaged with it in good faith with the principle being that we wanted to stop those rises going through and we wanted to make sure that the criteria are amended in a way that is robust and that will provide an enduring and independent solution for how MPs’ pay is set. That is the reason that we voted in favour of the legislation and in favour of urgency because without urgency as I have said there would have been no way to stop those pay increases.However having listened to the debate we did vote in favour of Supplementary Order Paper 58 put forward by Metiria Turei which would have resulted in the legislation being passed now but stoppingonly those pay increases and leaving for another day the decision around what the new criteria should be because we do not think that this is a good process. We would rather that it went through a more rigorous process particularly and this is a big issue for me because I would like to ensure that the Remuneration Authority—the experts on this; the people who have to actually implement it—is able to provide some scrutiny of the legislation that we are now passing. It has not had the opportunity to do so and it will not have the opportunity to do so. As a result we cannot be sure that the legislation that we are passing now is actually going to do what it purports to do in the short term and in the long term. There is a possibility that in the long term this will give us bigger pay increases than the existing criteria that we have which we are now replacing. That is one of the reasons there needs to be greater scrutiny of these matters—so that we can be sure that the bill does what it is supposed to do. We do not have that because of the way this process has been rushed.One of the concerning things that became very apparent during the debate is that this debate is in fact only partly about MPs’ pay and that actually the wider agenda from the Government is to suppress the pay overall across the whole of the public sector including teachers doctors nurses police prison officers and so on—we could go on and on through all of the professions. It is very disappointing to hear members from the National Party referring to those who work for the good of the public and who want pay increases as union thugs. I think that is very disappointing. I think that after a long period of time when their pay rises have not kept up with inflation—in fact in real terms their salaries have gone backwards—it is fair enough that they are asking for a pay increase.I heard Bill English claiming—I think it was either today or yesterday—that in fact teachers for example have had pay rises above inflation. So I went and looked at the top of the teacher salary scale. These are the most experienced teachers the longest-serving—teachers the ones who do not have any other management roles or whatever and who are just simply at the top of the teacher salary scale. Here are the real numbers: in 2009 they were paid $68980 and as of last year they were paid $72646. So let us be clear. These are the most experienced teachers. That is a 5.3 percent pay increase. What did inflation do during that time? It was 9.3 percent during that time. Actually in real terms a teacher who has no management responsibilities and who is at the top of the salary scale has gone backwards in the last 4 or 5 years under this National Government and yet Bill English is saying that they should not be getting any pay increase at all. They have seen the real value of their incomes eroded during that time.So the Government is up against the wall this year when a lot of these big public sector collective agreements come up for negotiation because actually people have been promised for 5 years by this Government—and maybe longer—that there will be jam tomorrow but jam never actually comes and they are saying that they have had enough of that. I think that is quite understandable. I think it is wrong that the Government uses this debate on MPs’ pay to try to suppress the debate over wider pay issues within the public sector. I do not think MPs should be getting significant pay increases of the magnitude that were recently awarded but I actually do think it is probably time to look at some of those pay rates in the public sector because there has been a lot of belt tightening.Finally I just want to make one last contributionin this debate and that is around the actual formula that this bill is now establishing which links MP pay increases to the average increases within the public sector. As I have raised during earlier parts of this debate that can create some unintended consequences because the overall average increase in the public sector can be distorted by higher-than-average increases in managerial salaries for those at the top of the salary scale and lower increases for those who are on regular and low incomes. As a result our pay will go up while the pay of the people whom we are most interested in protecting—the people out there who are not getting pay increases—continues to go backwards. So this formula does not necessarily deliver on the sentiment and the value proposition that the Government is putting forward which is one of the reasons why this rushed process is not acceptable. The Labour Party has supported this bill going through simply because we had no choice. It was the only way to stop those significant pay increases going through next week. It is not good process. The Government could have and should have acted on this much much earlier.