Shaw James: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeShaw James: Remuneration Authority (Members of Parliament Remuneration) Amendment Bill — Second Reading In Committee Third Reading[Sitting date: 17 March 2015. Volume:704;Page:2326. Text is incorporated into the Bound Volume.]JAMES SHAW (Green): I would just like to respond to some of the comments of the Minister earlier. I think he may have misunderstood me so I just want to clarify. I think it is an important point for the passage of the bill. We were talking about the incentives that are contained in tying MPs’ remuneration to that of the public sector versus the wider public. The Minister for Workplace Relations and Safety clarified that his comments were that in tying MPs’ remuneration to the public sector it would shine a light on profligate Government spending in the future. I understand that. I just want to talk about how that works. What are the mechanics of shining a light on profligate Government spending? What that is saying is that if the Government allows public sector pay to increase therefore MPs’ pay will also increase and there will be a public backlash against members of Parliament for getting increased pay. Therefore there is an incentive for MPs to hold down public sector pay. That is how it works. It is relying on MPs being afraid of a public backlash so I understand what the Minister is saying when he says that.What I am saying is that that is one incentive that is pulling in one direction but that there is also another incentive pulling in the other direction which is an economic incentive. Tying MPs’ remuneration to public sector pay gives members of Parliament the economic incentive to increase public sector pay because when their pay increases so does that of members of Parliament. There are two incentives and they are pulling in different directions. I was suggesting to the Minister that if he is relying on using public outrage over MPs’ remuneration to hold down public sector pay which is I think an outrageous and very sneaky move given the current climate that may not actually work for the Minister because MPs also have another incentive in the other direction which is to increase public sector wages. They may choose to allow public sector wages to increase and just wear the outrage that we get from the public for allowing our own pay to increase along with it.There are a couple of things that I want to say about that. The primary one is that New Zealanders as I understand it do not want us to pass this bill in order to hold down the pay of teachers nurses doctors civil servants police officers and firefighters. They want us to hold down our pay. The point of the bill is to hold down MPs’ remuneration not that of the public sector and using the public outrage over MPs’ pay to hold down public sector pay is I think itself an outrageous move. The Minister’s approach using the fear of the public backlash is one incentive pulling in one direction and there is another one at play. By the Minister’s own admission shining a light on profligate Government spending may not actually work as far as the Minister is concerned. The bill is flawed in so many ways but part of the Minister’s own reasoning as I understand it is to use this bill to hold down other people’s pay other than our own pay. In fact according to his own logic it may not work because of the law of economic incentives which is that tying MPs’ remuneration to that of the public sector gives MPs the economic incentive to allow public sector pay to increase.I think public sector pay should increase. I think that would be a good thing right? You are going to have a Government at some point that does think that is a good thing—sometime soon we hope. But the Minister’s own logic which is that this is an opportunity to hold down public pay may not work according to his own plans. Thank you.