Woodhouse Michael: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — First Reading Second ReadingText is incorporated into the Bound VolumeWoodhouse Michael: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — First Reading Second Reading[Sitting date: 17 March 2015. Volume:704;Page:2292. Text is incorporated into the Bound Volume.]Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): I move That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a second time. I want to acknowledge and thank the members who have made what I believe are very considered contributions on the bill. Although we will in due course be in the Committee of the whole House where I can respond to some of the more technical questions that have been raised in the first reading speeches I do want to touch on a few of the less technical and background questions and challenges that have been raised.Starting with Mr Young I think who made a very salient point that today is St Patrick’s Day. Indeed he quipped that this was a rather Irish thing to do: for Parliament to be legislating for a pay drop relative to what was expected. But I think we all agree that in principle it is the right thing to do—it is just the method and the practice. I acknowledge Mr Hipkins’ point where he asked the very correct question: if it is OK for MPs to legislate to set aside a pay increase that they believe is too high what is to stop MPs legislating to set aside a pay increase they believe is too low? Well the short answer is nothing. Parliament is the architect of its own destiny. But I would say this: the National Party is a minority party in this Parliament and for this legislation to pass it requires the support of other parties which I am pleased to say it has with the exception of the Green Party—and I make no criticism about that because I do understand the principal basis upon which the Greens are opposing this legislation. I will come back and criticise some of the other comments that have been made by the Green Party but certainly not its reasons for not supporting this bill. But I would say to Mr Hipkins that it would be a very brave Parliament—and indeed a very brave Government—that did that. So what we are doing we are doing for I think a considerable period of time.I understand that it is incumbent on me as the Minister sponsoring the bill and on this House to make sure that we get the principles—as articulated by the Prime Minister’s wishes and Cabinet’s decision—clearly laid out in legislation. Mrs King asked me what was different about the bill from what was prepared last week and which necessitated a slight delay while what I described as a technical amendment was put through. The difference was twofold really. One was a minor mathematical change in the algebra which would have had the transfer of non-cash to cash benefit then subject to the quarterly employment survey uplift. I did not believe that was appropriate in the circumstances because indeed that was a current-year valuation of a change in a non-cash entitlement. So the algebra was changed to add that part of it—or subtract it as the case may be—back into the calculation of remuneration salary and superannuation after the quarterly employment survey was applied.The second difference was a transitional provision between the 2013 determination and the 2015 determination which would be an issue going forward but actually manifests in the authority’s determination of the calculation of the value of a self-drive vehicle for Ministers. Ministers have had for a very very long time access to self-drive vehicles—and we can argue and debate whether or not there is a personal benefit and how much of a personal benefit there is—but indeed the authority set a value on that in 2015 that was not included in the 2013 determination. It was therefore a tricky transitional provision.Indeed what we have done by addressing that as it was drafted in the first bill was to remove that altogether from the calculation and simply say this: if an MP is gaining what is perceived to be a personal benefit right now and the value of that benefit in the authority’s estimation is attributed to it or has changed—either because of inflation or something else—then that change would not form part of the calculation. On the other hand if as is the Speaker’s prerogative there has been a reduction in the actual entitlement which has a change in the value as was the case in the 2015 determination when constraints were put on spousal travel for example and there was a reduction in the value of the current perceived value of the benefit if that occurs—and there are very few times now where we have actually got non-cash benefits left—in the future then that will need to be taken into account. But there will be no other change in the value or perceived value of the existing bundle of so-called non-cash benefits because the authority has pointed out that there may be a private benefit—for example for cellphones internet at home those things that we see as tools to do our job. But the authority is actually talking about attributing a personal benefit value to that. My view is that while that is in existence now any attribution of future value should not reduce an MP’s salary. The formula does that—you can feel free to check that in the Committee of the whole House.The next issue—in fact it was raised by both Mrs King and Mrs Martin—is around the Prime Minister’s comments about talking a good game but not doing anything. Well actually the Prime Minister’s comments did have the effect on the authority of reducing the impact of the increases received through what were quite straightened times. It is not my usual practice to disagree with one of my colleagues but Ms Dowie did make a comment about an instance where the Remuneration Authority decided not to heed the advice or the request of the Prime Minister. I am going to partially defend the authority in that regard because indeed what it believed it was doing was applying the letter of sections 16 and 18 of the Remuneration Authority Act. Indeed when I first started thinking about this I misread the difference between prevailing economic circumstances and countervailing economic circumstances. What the authority has determined is that there are no countervailing economic circumstances that would warrant a more modest increase in MPs’ salaries.The authority’s other role as set out in that Act—I am quoting section 18 here—is “to achieve and maintain fair relativity with the levels of remuneration received elsewhere;”. And that is where it gets difficult. Where is there a relative role? What do we compare ourselves with? There have been criticisms of runaway rises in executive salaries in the public sector. Well I do not agree with that. I simply do not agree with that. I am not going to agree with that and we are not changing anything in respect of the Remuneration Authority’s determinative powers to set the salaries for about 80 senior public servants. Indeed Ms Fox talked about public sector pay being well above that of the Ministers. Well so what? The Commissioner of Police has 12000 staff a $1.5 billion budget an incredibly complex organisation to run—and I have got seven staff and I am the humble Minister. It is true. Is that a valid comparison? Because I do not think it is. I would say that the relativity—and this is a personal view not the Government’s view—but I do consider that the relativity is actually around seeing the Minister as the chairman of the board rather than as an executive. We do not do the job; nor should we. We should be nose and fingers out—as good chairs are—not chief executive officers because I am not the chief executive officer of the Police; Commissioner Bush is.I think that underscores the difficulty with the question of relativity—that the Government has said: “You know what? We are paid fairly for what we do now and the level of increase is inappropriate in the circumstances and this is the right thing to do.” I will in the Committee of the whole House address the technical questions around the quarterly employment survey—why we have it what its history is. And indeed Mr Farrar will now be in Hansard because I am going to address his specific blog because I think it is important to understand it in its broader context. In the meantime I do appreciate what I have considered to be very intelligent interventions and I look forward to that continuing.