Carter John: Remuneration Authority Amendment Bill — First Reading 
Carter John: Remuneration Authority Amendment Bill — First Reading 
[Volume:657;Page:6897] 
Hon JOHN CARTER (Minister of Civil Defence) 
 on behalf of the  
Minister of Labour 
: I move  
That the Remuneration Authority Amendment Bill be now read a first time. 
 At the appropriate time I will move that the bill be referred to the Transport and Industrial Relations Committee that the committee reports finally to the House on or before 16 November 2009 and that the committee have the authority to meet at any time the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week when there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c).  
The Remuneration Authority is responsible for considering and determining the salaries and allowances for specific persons as defined by the Remuneration Authority Act 1977. The authority plays an important role through this function and the Government is grateful for its work. Recently however determinations of the Remuneration Authority have led to public debate about the appropriateness of salary increases in the present economic climate. These concerns were also shared by many of those to whom the determinations applied including members of every party of this House and the Governor-General. Further the salary increases are viewed by some to be out of step with several trends. These trends include a general appreciation of the need for belt tightening and this Government’s expectations of the public sector. Reports of household financial hardships and job losses experienced by ordinary New Zealanders require a reassessment of how salaries governed by the Remuneration Authority are set. Although we may be seeing signs of economic recovery unemployment levels continue to rise and families are maintaining tight budgets.  
There is a perception that the criteria by which the Remuneration Authority arrives at its recommendations may not provide adequate guidance about the extent to which adverse economic conditions ought to be taken into account. It is important that the public has confidence in the authority and that any perceptions that pay increases are simply automatic are addressed. The public has every right to question whether politicians judges and senior public servants should be handed guaranteed salary increases each year when everyday Kiwi families are under financial pressure due to tough economic times. Consequently the Government has decided to propose changes to the Remuneration Authority Act 1977.  
This bill amends the Remuneration Authority Act 1977 to allow the authority to explicitly take account of adverse economic conditions when making its determinations as well as a number of minor and technical amendments. Crucially this Government wants to ensure that the authority maintains its independence when making its decisions. Decisions on pay for politicians should not be made by politicians. We also need to ensure that the authority has the tools to make decisions the public can have confidence in. The authority will have sufficient guidelines in place to acknowledge difficult times and to act accordingly by recommending a wage freeze or setting remuneration increases at a lower rate than it would otherwise have determined. The bill requires that the authority base its assessment of economic conditions on evidence from an existing authoritative source such as Treasury the Reserve Bank or Statistics New Zealand data. This will avoid the authority being required to do additional work to gather economic data.  
Additionally the bill makes a number of minor and technical amendments to the Remuneration Authority Act. These amendments concern the deletion of outdated positions in the schedules of the Act updating positions in the New Zealand Defence Force and the alignment of the annual reporting requirements of the Remuneration Authority with those of the State sector. These minor amendments are very straightforward. The entire bill in fact is very straightforward and I look forward to it receiving the full support of the House. This bill responds to the concerns of the public and the position holders about the process by which the Remuneration Authority arrives at its determinations. By requiring the authority to explicitly consider adverse economic conditions the bill will add transparency to the determination process while maintaining its independence. I commend the bill to the House.