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:2316. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call during the Committee stage of this bill. I listened very carefully to the contribution of the Minister Michael Woodhouse. I thought he made some interesting points and I thank him for the clarifications that he made during that speech at the beginning of this Committee stage. I would of course point out to him that questioning the numeracy skills of other members in a bill that he had to withdraw and then reintroduce because the numeracy in it was wrong was probably not such a good approach to opening the debate. However I do accept what the Government is trying to achieve. I think it would be wrong for us to come here and say that what the Government is trying to achieve is wrong. In fact it is what we all are wanting to achieve which is actually to bring MPs’ pay increases in line with everybody else’s.There is of course significant heat in the debate around the best way to do that. Unfortunately this is not the best forum in which to tease that out because we simply do not have the time or access to the expertise in order to be able to weigh up and assess the various options before us so that we actually get a solution that works. I for one would very much like to hear from the Remuneration Authority the people who have to actually implement this bill because what we are doing is constructing a new set of criteria that they are going to have to take away and figure out how they are going to interpret and how they are going to implement. But we are not giving them the opportunity to come to us and say that this is what this will actually mean in regard to their interpretation of the legislation that we are now passing.I do not think that is a good thing because I think it could mean that we will get something at the end of this year—or in a couple of months once the authority has issued a new determination—that is not what we are anticipating in this bill. It is also quite conceivable that in a year or two’s time the authority will be making determinations that we did not envisage as we passed this legislation. The only way that we can know those things is by actually getting the authority to come in and explain to us how it will interpret this. Unfortunately there is no opportunity for it to do so because this is being debated under urgency.I think it is very concerning that the Government is dismissing what are quite legitimate concerns being raised both in Parliament and outside of Parliament about the linking of this to the average of public sector pay. It is based on full-time equivalence but there are some issues within that. Let us take for example the restructuring within the Public Service. If you take a bunch of Government departments and amalgamate them together what tends to happen is that the number of managers and people on higher salaries increases because people who are going into managing a Government department of several thousand employees typically want to be paid more than if they were going in to manage a smaller Government department with a couple of hundred employees. We have seen significant reorganisation in the public sector over the last 6 or 7 years. In fact there was a reorganisation under the previous Government as well and in almost all of the instances where Government departments were amalgamated together the number of employees earning six-figure salaries significantly increased.So what this means by linking to the average overall is that we are not taking into account the fact that management salaries can increase significantly while the salaries of those on modest incomes can stay the same or in real terms in fact can even go backwards. So we could be getting a pay rise while the vast bulk of people working in the public sector are actually staying the same or going backwards because the management salaries at the top end are going up not just because they are getting big pay rises but because the overall composition of the way the Public Service is structured is changing and there are more managerial positions than there were previously because Government departments are getting bigger as a result of what has been in some cases I think some quite useful rationalisation.There has of course been management creep as well. The number of management roles stepping up over for example that $100000 a year threshold has actually increased quite significantly over the last 4 or 5 years despite the wage constraint within the Public Service. What that means of course is that those who are on modest incomes—the vast bulk of people—are either staying relatively stagnant or going backwards. The pay rises in 2009-10 that the Minister mentioned in his contribution included some pay increases for teachers nurses people working in other health professions the police—Hon Michael Woodhouse: Oh that’s all right then—runaway inflation’s OK.CHRIS HIPKINS: So is the Minister saying that he thinks there is not a single teacher in the country who should be paid more?Hon Michael Woodhouse: More than what? More than they are?CHRIS HIPKINS: No no the question—it is quite a simple question. Are teachers paid sufficiently or should they be paid more? There is no answer from the Government. The Government thinks that every teacher and nurse and police person—policeman or woman—is paid perfectly sufficiently and should get no pay rise and I think that is reflective of the attitude of the current Government. It has no answer—no answer. Dead silence when asked whether teachers or nurses or doctors or police should be paid any more.Ron Mark: How much are they getting?CHRIS HIPKINS: Absolutely no answer whatsoever. And that is a very good question that Ron Mark has asked: how much are they actually going to get? They have got pay rounds coming on this year and of course we know that the Government wants to dampen down expectations around that. Having gone with next to no pay rises for the last 4 or 5 years there are some expectations that—in fact Bill English promised them at the last election National promised at the last election to raise average wages significantly—the Government is going to deliver on that. Silly old public for believing what National had to say.Of course I do want to also note that two of those professions within the public sector—two of the largest of those professions teachers and nurses—are dominated by women. Would we in fact be that willing to suppress their pay if they were male-dominated professions? Would they be doing better? We know that overall men tend to do better and women’s pay has been suppressed and that has certainly been the case within the public sector.I want to just turn briefly to the Supplementary Order Papers introduced by the Green Party before I finish this particular contribution. I have had a chance to skim the Supplementary Order Papers that the Greens sent through. We did not get them until this afternoon and we did not get the final versions until just recently. That is not the Green Party’s fault; that is the Government’s fault for introducing this legislation late and only giving clarity around what we were actually going to be passing quite late. So we have not had the chance to go through those Supplementary Order Papers to tease them out and to be able to test them in the way that we would like to if we were going to give our support to them.I absolutely accept that there is a very real possibility that the Supplementary Order Papers that the Green Party is putting forward may be much better than the bill that we are debating but we simply do not have the opportunity given this urgency to go through and tease that out and test that properly and we would want to do that before we are willing to lend our support to them. So it is not a reflection of the fact that we do not agree necessarily with what has been drafted by the Greens; it is simply that we do not have the opportunity to go through it and test it properly. I absolutely appreciate the goodwill that the Green Party is showing in trying to come up with a solution that might actually deliver a better outcome than what the Government is proposing with this legislation.So overall I think it is important when we take away all the heat that we get back to the principle of what we are debating here: MPs’ pay should not be out of whack with the pay of every other New Zealander. Every New Zealander has had to tighten their belt over the last—well every New Zealander except for those on the highest incomes who generally have done pretty well over the past 4 or 5 years. But the vast bulk of working New Zealanders have had to tighten their belts over the last 4 or 5 years because of the economic climate and because their salaries have not been increasing in the way that they would hope.But I actually think that there is an expectation amongst New Zealanders now that National was to be believed when it promised significant salary and wage increases at the last election because it was in the National Party manifesto. I am happy to go and print it off for those members on the other side who did not read their own manifesto. New Zealanders expect to have some pay increases. The Government suppressing public sector wages for valuable public sector jobs—and we are not talking just about people who sit in offices in Wellington but we are talking about front-line people like teachers nurses doctors police and people who work in the Defence Force; those roles that we think are absolutely front-line services—means that those people are going to suffer if the Government continues to suppress wages in the way that it does.This should be a high-wage economy not a low-wage economy. The current Government’s aspiration seems to be that it is quite happy for it to be a low-wage economy. I would love to see MPs’ salaries going up in a few years’ time because everybody else in New Zealand is doing so well. That should be the aspiration of the current Government. It is not the aspiration of this Government.