Pay freeze for MPs locked in for three years

The Prime Minister and other politicians will not get a pay increase for the next three years.

The Remuneration Authority has released MPs' pay rates for the next three years.

Prime Minister Jacinda Ardern is paid $471,049 a year and the deputy Prime Minister gets $334,734, while the leader of the opposition is on $296,007.

The authority has taken into account COVID-19 and the risks the pandemic poses for the economy during that period, but said it could change its position if there was marked change in the economy during that time.

"The information made available to us at the time of the review, from a range of authoritative sources (including the Reserve Bank of New Zealand and the Treasury), suggests that New Zealand's economic outlook remains highly uncertain due to COVID-19 and its impact on global economic conditions," the authority stated in a explanatory memorandum.

"Modelling and projecting salary movements for the three out years (as is now required by the Act) proved to be a significant challenge.

"Both domestically and internationally, it appears that economic recovery from COVID-19 and its related disruption will be slow and uneven, with the pace of the recovery during the current term of Parliament largely determined by the containment and management of the virus."

MPs' salaries and allowances were frozen between July 1, 2018 to June 30, 2019 after a provision to the Remuneration Authority Act 1977, but that was removed in December 2019.

Then at the start of the COVID-19 pandemic, the authority decided to maintain MPs' salaries and allowances at the levels of the 2017 Determination.

As well as the changes to the Act, the amendments made in December 2019 changed some of the processes that the authority has historically used to set how much MPs are paid.

Members of Parliament and the Prime Minister also get allowances to cover out-of-pocket expenses incurred during Parliamentary business.

The Prime Minister's allowance has been determined at $22,606, for the Speaker of the House at $21,136, and other members of Parliament at $16,980.

Earlier this year, an amendment was enacted to temporarily reduce MPs' salaries by up to 20 percent, which will continue until 6 January 2021.

In June, Ardern expressed frustration over how long it took for that change to take effect.

When it expires, salaries will revert to what the authority has stated in its latest determination (as above) which set MPs' pay at the same level as was set on 1 July 2017.