Lees-Galloway IainSecond ReadingHon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I move That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a second time.The Remuneration Authority is required to release an annual determination that sets out the salaries for members of Parliament according to a formula set in law. The 2017 Parliamentary Salaries and Allowances Determination expired on 1 July 2018. The authority is due to release the 2018 determination which proposes according to a formula set in law an increase of 3.08 percent for the salaries of members of Parliament.The formula for determining MPs' salaries was introduced in 2015 and it increases MPs' salaries by the percentage average growth in public sector wages as measured by the quarterly employment survey removing any superannuation subsidy and personal benefits received from allowances. The formula has resulted in higher than expected percentage increases to MPs' salaries. Given the level of pay that MPs receive relative to the average wage in New Zealand a high percentage increase can result in a significant increase in the total amount that MPs are paid. For example a 3 percent increase for the median annual income in New Zealand of $52000 would result in an additional $1500 pay whereas an MP earning $163961 annually would receive a further $5000 which is over three times more in real dollar terms. These significant pay increases are unfair and unjustifiable and they contribute to the growing imbalance in pay between those on highly remunerated salaries and the rest of New Zealand. This is not acceptable to the New Zealand public.Since the formula's introduction in 2015 pay increases for MPs have ranged from 2.46 percent to 4.06 percent. The repeatedly high level of annual increases in pay set under this formula calls into question whether the settings for determining MPs' pay are fit for purpose. It is critical that the Remuneration Authority Act 1977 be amended in order to stop this significant pay increase from progressing while work can be done to improve the way in which MPs' pay is determined. This bill amends the Remuneration Authority Act 1977 to freeze MPs' salaries and allowances at the current levels set out in the 2017 determination and the superannuation subsidy as set out in the Parliamentary Superannuation Determination 2003 until 30 June 2019.The bill also makes amendments to the relevant provisions in the Members of Parliament (Remuneration and Services) Act 2013 to reflect that no determination must be made for salaries or allowances during the same time period. The bill does not impact on how MPs' services are determined for this time period. MPs' services are individualised and need to be responsive to the differing accommodation travel and international travel needs of different MPs and Ministers. Work will be carried out to examine whether changes to the way in which MPs' pay is determined are required. If further amendments to the Act are proposed as a result of the outcome of that work into how MPs' salaries and expenses are determined these will be made ahead of the 2019 determination being made. The Remuneration Authority will be consulted to test and ensure that any proposed changes will be fit for purpose.In conclusion this bill puts in place an immediate freeze to MPs' salaries and allowances and will maintain them at 2017 levels until 30 June 2019 while work is carried out into the settings determined for MPs' pay. This bill is a critical first step to ensure that MPs' future salaries and increases are reasonable and justified in relation to those increases received by hard-working New Zealanders. I commend this bill to the House.