"It would be inappropriate for politicians to set their own wages. That is why the responsibility has been transferred
to the Higher Salaries Commission as a statutorily independent body," Finance Minister Michael Cullen said today.
Dr Cullen was responding to the Commission's announcement today of increases to MPs' salaries and allowances.
"The Commission is supposed to benchmark MPs' remuneration against movements in executive salaries. In fact it has had
to recognise for a number of years that to do so would be politically unacceptable.
"My own view, and one the Government intends to explore, is that MPs' salary increases should be indexed to movements in
the average wage. I think that would take a lot of the sensitivity out of the issue and would be seen by the public as
appropriate.
"The increases announced today span two years. MPs will receive 2.4 percent from 1 July, this year and another 2.35
percent at 1 July, next year. Cabinet Ministers will get 2.6 percent this year and 3.8 percent next year.
"This is well below movements in executive salaries and more in line with average wage movements.
"MPs base salaries from May, 1985 to 1998 increased 73 percent. Increases since then, including next year's increase,
take that to around 93 percent.
"From May, 1985 to the present day, the average ordinary time wage has increased 112.8 percent," Dr Cullen said.