Members of Parliament, including the Prime Minister and Ministers
The Authority sets an annual salary for Members of Parliament (and for the Prime Minister, Ministers, Speaker, Leader of the Opposition, Chairs of Committees and certain other roles) and sets a basic allowance for MPs, and determines their superannuation.
The Authority sets remuneration for Members of Parliament (MPs). Some MPs, for example the Prime Minister, Ministers, Speaker, Leader of the Opposition and Chairs of Committees have higher rates of remuneration than ordinary MPs.
Some recoverable work related expenses are set by the Authority, a responsibility that is shared with the Speaker (for MPs) and by the Minister responsible for Ministerial Services (for Ministers).
2020 Review of the Remuneration for Parliamentarians
The Remuneration Authority (Members of Parliament Remuneration) Amendment Act 2019 restores the Authority’s discretion when determining the salaries of Members of Parliament (MPs). It also requires the Authority to issue a determination for salaries and allowances covering MPs for the period 1 July 2019 to the polling date for the next general election.
It been some years since the Authority last exercised its discretion on determining the salaries of MPs and we have decided that it would be appropriate to complete a review of all aspects of MPs’ remuneration including: salary, superannuation subsidy and the expense allowance.
The Authority has prepared the following consultation paper, which is designed to provide information to people who may wish to make a submission on MPs’ remuneration to the Authority.
Under section 21 of the Remuneration Authority Act 1977, any person or organisation is entitled to make written submissions to the Authority in relation to the functions that it exercises under this Act.
Written submissions are welcomed by 5:00pm on Friday 27 March 2020. They can be posted to the Remuneration Authority, PO Box 10084, The Terrace, Wellington 6143 or emailed to the Remuneration Authority.
Due to the current nationwide situation we have extended the date for the receipt of submissions to Friday 8 May 2020.
Current remuneration for MPs, Ministers and other roles in Parliament and the Executive
Provisions in the Remuneration Authority Act 1977 on the remuneration for MPs were amended on 17 March 2015 by the Remuneration Authority (Members of Parliament Remuneration) Amendment Act 2015. A determination for salaries under this Act can be found below.
Information on current remuneration for MPs is in the links below. The first link is to the 2016 Parliamentary Salaries and Allowances Determination which was Gazetted on 3 November. This is backdated to 1 July 2016.
- Parliamentary Salaries and Allowances Determination (2017/262)
- Parliamentary Superannuation Determination 2003 (2003/306). This applies to MPs who are not contributors to the parliamentary superannuation scheme under the Government Superannuation Fund Act 1956.
- Parliamentary Superannuation Determination 2003 Amendment Determination 2015 (LI 2015/317)
- Members of Parliament (Accommodation Services for Members and Travel Services for Family Members) Determination 2017
Basic allowance for MPs
The Authority also sets an allowance for MPs to cover out of pocket expenditure such as entertainment of visitors, staff, constituents and officials, memberships, sponsorships and fees, koha. Details of the items covered are in the Parliamentary Salaries and Allowances Determination 2015 (2015/41).
This allowance recognises the costs that fall on MPs due to their representative role, and which it is neither administratively efficient nor possible to deal with on a reimbursement basis. The Inland Revenue Department is consulted each year to confirm the continuance of a tax free status which flows from the fact that MPs do not gain personal benefit from the expenditure
Superannuation for MPs
If MPs contribute to a personal superannuation scheme an ‘employer’ contribution is made based on the basic MPs salary.
For MPs elected before 1992, who have served consistently since that date, there is an entitlement to membership of the Government Superannuation Fund (GSF) scheme, which provides for a pension on leaving parliament that reflects years of service.
MPs elected after 1992 are entitled to a contribution which is paid as a lump sum when the MP leaves Parliament. The scheme can be a KiwiSaver, master trust or registered personal superannuation scheme.
The Remuneration Authority Act 1977 says that the maximum amount that can be paid as a superannuation subsidy in any one year must be the same for all MPs.
Where members choose not to contribute to superannuation, no additional remuneration is paid.
Effective date of MPs' salary changes
MPs’ salary determinations are issued annually with a commencement date of 1st July. Because the Remuneration Authority is a follower rather than a setter of salary trends, it is necessary for the Authority to have up-to-date data on remuneration movements in roles broadly similar to the role of an MP, changes in the Consumers Price Index, and the usage of members' travel entitlements before it can form any views on appropriate remuneration changes. Coupled with the statutory requirement to consult before finalising the determination, this means the determination is normally released late in the year and applies from the date of the expiry of the previous determination.
Accommodation reimbursement and allowances
The reimbursement of specific employment-related costs to MPs is provided for in the Members of Parliament (Remuneration and Services) Act 2013.
Three organisations have responsibility for setting the rules for and the level of these payments. These are the Remuneration Authority, Parliamentary Service and Ministerial Services. All three are required at least once in each parliamentary term to review and publish the arrangements they are responsible for setting.
The Remuneration Authority is responsible for setting:
- accommodation costs whilst travelling in New Zealand on parliamentary or ministerial business
- accommodation costs in Wellington for members residing elsewhere
- travel costs for members' families when joining them on parliamentary or ministerial business.
The payments set reflect the unique employment arrangements on Members who both travel extensively to engage with constituents, civil society groups and businesses, and are required to be in Wellington for a considerable period of the year whilst maintaining homes and community links elsewhere.
When it sets MPs' salaries the Authority assesses any personal benefit members on average receive from the provisions, and takes this into consideration when establishing the level.
The main acts governing remuneration for MPs are:
- The Remuneration Authority Act 1977, s.12 which gives to the Remuneration Authority the role of setting:
- salaries and allowances of MPs, superannuation rights and obligations of MPs who belong to the Government Superannuation Fund (closed to new members from July 1992)
- superannuation rights and obligations of MPs who do not belong to the Government Superannuation Fund.
- The Members of Parliament (Remuneration and Services) Act 2013. This act replaced the Civil List Act 1979 on 16 December 2013. The act provides for:
- the Remuneration Authority to fix the salaries and allowances of Members of Parliament.
- salaries and allowances to differ according to the position an MP holds.
- arrangements about the payment of salaries and allowances following elections.
- accommodation services in New Zealand for MPs and Ministers and travel services within New Zealand for MPs and Ministers and their family members.
- travel, international accommodation, communication and attendance services to be set by the Speaker, for MPs, and by the Minister responsible for Ministerial Services, for Ministers.
- travel entitlements for former MPs and their spouses or partners
- travel entitlements within New Zealand for former prime ministers and their spouses or partners