Higher Salaries Commission
Setting MPs’ remuneration and allowances - who’s responsible and how the package is determined
A Background Paper prepared by the Higher Salaries Commission
December 2001
The Parties Involved
The system for paying salaries and other entitlements to MPs and Ministers is complex, and involves:
„« The Higher Salaries Commission (HSC), which sets MPs’ and Ministers’ salaries, allowances and the superannuation
subsidy for non Government Superannuation Fund members.
„« The Speaker and the Minister for Ministerial Services who set other entitlements for MPs and Ministers, and
„« The Parliamentary Service and Department of Internal Affairs’ Ministerial Services Branch which administer the MPs’
and Ministers’ salaries, allowances and other entitlements.
What do MPs receive?
As with all other professionals and business employees, MPs receive remuneration. They also recover expenses. It is
important to distinguish clearly between the two.
Remuneration is payment or benefit in return for services provided. It includes:
„« Salary
„« Crown contributions to superannuation, and
„« Some other benefits
Expenses include
„« All costs that are directly related to the performance of Parliamentary duties. These are paid by a combination of
allowances and reimbursable expenditure. For the latter, receipts are required.
The Higher Salaries Commission is limited by statute to determine salary, the superannuation subsidy and allowances.
There are a range of other benefits and expenses which are also paid and administered by other agencies as above.
This division of responsibilities has evolved over time and creates some difficulties. A committee, headed by Jeff Todd,
is reviewing the process and will report to Parliament in February 2002.
How does the Higher Salaries Commission approach its task?
The HSC:
„« Conducts an annual survey of private sector remuneration
„« Subscribes to other surveys which compare public and private sector salaries
„« Obtains information from the State Services Commission
„« Reviews statistical information about general wage and inflation movements
„« Hears submissions from the Members Services Committee that represents all parties
„« Receives submissions from individual MP’s
„« Holds discussions with appropriate officers of Parliament
„« Reviews remuneration scales from other parliamentary systems - notably Australia and the UK.
Why are the deliberations of the HSC not made public?
The HSC Act (Section 9) requires the Commission to maintain confidentiality in carrying out its functions. The fact that
information given to us remains confidential enables people to have free and frank discussions with us. This ensures
that the Commission has a sound basis to make its judgements. Wherever possible the Commission cross checks information
from other sources.
The final determinations are published.
EMBARGOED UNTIL 4.00 PM 2000/392
13 DECEMBER 2001
PARLIAMENTARY SALARIES AND ALLOWANCES
DETERMINATION 2001
_______
Pursuant to section 16 of the Civil List Act 1979 and to the Higher Salaries Commission Act 1977, the Higher Salaries
Commission makes the following determination (to which is appended an Explanatory memorandum).
Contents
1 Title
2 Commencement
3 Expiry
4 Interpretation
5 Salaries
6 Allowances
7 Revocation
_________ Schedule 1
Salaries payable under section 16 of Civil List Act 1979
Schedule 2
Allowances payable under section 16 of Civil List Act 1979
_________
Determination
1 Title
This determination is the Parliamentary Salaries and Allowances Determination
2001.
2 Commencement
This determination is deemed to have come into force on 1 October 2001.
3 Expiry
This determination expires on 30 June 2002.
4 Interpretation
In this determination,„o
member of the Executive means a member of the Executive Council or a Parliamentary Under-Secretary
Parliamentary business means the undertaking in New Zealand of any task or function that a member could reasonably be
expected to carry out in his or her capacity as a member of Parliament and that complements the business of the House of
Representatives; and includes any of the following in New Zealand:
(a) attending a sitting of the House; or
(b) attending a meeting of a select committee of the House of which the
member is a member or which the member is required to attend because of being in charge of a Bill or other matter under
consideration by the committee or for any other valid reason relating to the business of the committee; or
(c) undertaking research or administrative functions that relate directly to
the business of the House; or
(d) attending meetings for the purpose of representing electors or explaining
the application of policy; or
(e) attending caucus meetings which are expressly for the purpose of
enhancing the Parliamentary process; or
(f) attending regional or national meetings of his or her party; or
(g) attending any ceremony or official function or national or international
conference as a representative of Parliament or with the authority of the House
party means a parliamentary political party whose members in the House include at least 1 member elected as a
constituency or list candidate for that party
primary place of residence means, in relation to a member of Parliament, the place of residence that the Higher Salaries
Commission approves from time to time as the member’s primary place of residence in New Zealand
Wellington commuting area comprises the cities of Wellington, Lower Hutt, Upper Hutt, and Porirua and the Paraparaumu
Ward of the Kapiti Coast District.
5 Salaries
(1) The salaries payable under section 16 of the Civil List Act 1979 are those set out in Schedule 1.
(2) No member of Parliament may, at any 1 time, be paid, under any of the provisions of Schedule 1, more than 1 salary
and, if a member holds 2 or more positions, the salary payable to that member is that payable for the position for which
the highest salary is payable.
6 Allowances
(1) The allowances payable under section 16 of the Civil List Act 1979 are those set
out in Schedule 2.
(2) Each allowance provided for in Schedule 2 is paid to the recipient for the purpose of reimbursing the recipient for
expenses arising from that recipient's official and parliamentary duties.
7 Revocation
The Parliamentary Salaries and Allowances Determination 20001 is revoked.
1S.R. 2000/246
________________________________________
Schedule 1 cl 5 (1)
Salaries payable under section 16 of Civil List Act 1979
Note: No member of Parliament may be paid more than 1 salary under this schedule.
Office
Yearly rate of salary payable on and after 1 October 2001
$
Members of the Executive
Prime Minister 244,100
Deputy Prime Minister 180,900
Each member of the Executive Council who is a Minister of the Crown holding 1 or more portfolios and who is a member of
Cabinet
162,600
Each member of the Executive Council who is a Minister of the Crown holding 1 or more portfolios, but who is not a
member of Cabinet
143,900
Each other member of the Executive Council 115,500
Each Parliamentary Under-Secretary 112,400
Officers of the House of Representatives
Speaker of the House of Representatives 162,600
Deputy Speaker 116,600
Each Assistant Speaker 98,200
Leader of the Opposition
Leader of the Opposition 162,600
Office
Yearly rate of
salary payable on and after 1 October 2001
$
Other Party Leaders and Deputy Leaders
Each member of Parliament who is the Leader of a party:
Base salary
plus
For each additional member of the party up to a maximum of 5
plus
For each additional member of the party in
excess of 5
100,200
1,050
630
Each member of Parliament who is the Deputy Leader of a party whose members in the House number not less than 35
110,300
Whips
In respect of each party whose members in the House number not less than 6,„o
One Whip
Base salary
Plus
For each member of the party in
excess of 6
98,700
525
In respect of each party whose members in the House number not less than 25,„o
One Junior Whip
102,900
Plus, if a Whip referred to in 1 of the provisions under this heading Whips is also the Senior Government Whip
2,100
Office
Yearly rate of
salary payable on and after 1 October 2001
$
Chairpersons of select committees
Each member of Parliament who is„o
(a) the chairperson of the Regulations Review Committee; or
(b) the chairperson of a subject select committee specified in Standing Order 190 of the Standing Orders of the House of
Representatives:
98,700
Deputy chairpersons of select committees
Each member of Parliament who is„o
(a) the deputy chairperson of the Regulations Review Committee; or
(b) the deputy chairperson of a subject select
committee specified in Standing Order 190 of
the Standing Orders of the House of
Representatives:
91,500
Other Members of Parliament
Each other member of Parliament 90,500
______________________________________
cl 6(1) Schedule 2
Allowances payable under section 16 of Civil List Act 1979
Part 1
Allowances
Members of the Executive
1 Expenses allowance
Each member of the Executive is to be paid an expenses allowance in accordance with the following table:
Office Yearly rate of
expenses allowance
$
Prime Minister 29,500
Deputy Prime Minister 13,000
Each member of the Executive Council (other than the Prime Minister and the Deputy Prime Minister) who is a Minister of
the Crown holding 1 or more portfolios, whether or not a member of Cabinet
12,000
Each other member of the Executive Council 10,500
Each Parliamentary Under-Secretary 9,500
2 Additional allowance for Minister of Foreign Affairs and Trade
The Minister of Foreign Affairs and Trade is to be paid, in addition to that
Minister's expenses allowance under clause 1, an allowance at the rate of $6,000 a year to provide for expenses incurred
in connection with that Minister's official duties.
Part 1„ocontinued
3 Travelling allowance
(1) Each member of the Executive is to be paid a travelling allowance in respect of
each occasion on which the member of the Executive is, in the course of travelling within New Zealand on Parliamentary
business, absent both„o
(a) from the Wellington commuting area; and
(b) from his or her primary place of residence.
(2) The rate of the travelling allowance payable in respect of each such occasion is a sum equal to the actual and
reasonable cost of the expenses incurred, with a maximum of $320 per day or part of a day.
(3) However, subclause (4) applies if the occasion involves the attendance of the person entitled and the partner of
that person at an official function, being an official function„o
(a) that the person entitled attends by reason of the duties of his or her
office; and
(b) that the person entitled is invited to attend or is required to attend
primarily because of the office that the person entitled holds; and
(c) that the partner of the person entitled necessarily attends.
(4) The rate of the travelling allowance payable in respect of each occasion referred
to in subclause (3) is a sum equal to the actual and reasonable costs of the expenses incurred, with a maximum of $480
per day or part of a day.
(5) In this clause, day means a period of 24 hours.
4 House allowance
A house allowance at the rate of $2,000 a year is to be paid to each member of the Executive who is not provided with a
residence at the public cost.
Part 1„ocontinued
5 House and grounds maintenance allowance
A house and grounds maintenance allowance at the rate of $1,500 a year is to be paid to each member of the Executive to
assist in the maintenance of his or her primary place of residence.
Officers of the House of Representatives
6 Speaker
The Speaker of the House of Representatives is to be paid„o
(a) a basic expenses allowance at the rate of $12,000 a year; and
(b) an additional allowance at the rate of $8,500 a year to provide for
expenses incurred in connection with the office of Speaker; and
(c) a day allowance in accordance with clause 15; and
(d) the travelling allowance that would be payable to the Speaker under
clause 3 if the Speaker were a member of the Executive; and
(e) the house and grounds maintenance allowance (if any) that would be
payable to the Speaker under clause 5 if the Speaker were a member of
Executive.
7 Deputy Speaker
The Deputy Speaker is to be paid„o
(a) a basic expenses allowance at the rate of $9,500 a year; and
(b) an additional allowance at the rate of $7,500 a year to provide for
expenses incurred in connection with the office of Deputy Speaker; and
(c) a day allowance in accordance with clause 15; and
(d) a night allowance in accordance with clause 16.
Part 1„ocontinued
8 Assistant Speakers
Each Assistant Speaker is to be paid„o
(a) a basic expenses allowance at the rate of $7,000 a year; and
(b) an additional allowance at the rate of $1,000 a year to provide for
expenses incurred in connection with the office of Assistant Speaker; and
(c) if an Assistant Speaker is a constituency member, a constituency
allowance at the appropriate rate specified in clause 14; and
(d) a day allowance in accordance with clause 15; and
(e) a night allowance in accordance with clause 16.
Leader of the Opposition and other Party Leaders and Deputy Leaders
9 Leader of the Opposition
The Leader of the Opposition is to be paid„o
(a) a basic expenses allowance at the rate of $12,000 a year; and
(b) if the Leader of the Opposition resides in the Wellington commuting
area,„o
(i) a house allowance at the rate of $2,000 a year; and
(ii) a house and grounds maintenance allowance at the rate of $1,500 a
year; and
(c) if the Leader of the Opposition does not reside in the Wellington
commuting area but is in Wellington on Parliamentary business,„o
(i) a day allowance in accordance with clause 15; and
(ii) a night allowance in accordance with clause 16; and
(d) if the Leader of the Opposition is, in the course of travelling within New Zealand on parliamentary business, absent
both„o
(i) from the Wellington commuting area; and
(ii) from his or her primary place of residence,„o
Part 1„ocontinued
the travelling allowance that would be payable under clause 3 if the Leader of the Opposition were a member of the
Executive.
10 Other party Leaders
(1) Each member of Parliament who is the Leader of a party is to be paid„o
(a) a basic expenses allowance„o
(i) at the rate of $10,000 a year if and so long as that party's members
in the House number not less than 25; and
(ii) at the rate of $9,500 a year if and so long as that party's members in
the House number not less than 13 nor more than 24; and
(iii) at the rate of $9,000 a year if and so long as that party's members in the House number not less than 6 nor more
than 12; and
(iv) at the rate of $7,000 a year if and so long as that party's members in the House number less than 6; and
(b) if a Leader is a constituency member, a constituency allowance at the
appropriate rate specified in clause 14; and
(c) a day allowance in accordance with clause 15; and
(d) a night allowance in accordance with clause 16.
(2) This clause does not apply to a member to whom an allowance is payable under any of the provisions of clauses 1 to
9.
11 Deputy Leaders
(1) Each member of Parliament who is the Deputy Leader of a party whose members in the House number not less than 35 is
to be paid„o
(a) a basic expenses allowance at the rate of $7,000 a year; and
(b) an additional allowance at the rate of $2,000 a year to provide for expenses incurred in connection with the office
of Deputy Leader; and
Part 1„ocontinued
(c) where a Deputy Leader is a constituency member, a constituency allowance at the appropriate rate specified in clause
14; and
(d) a day allowance in accordance with clause 15; and
(e) a night allowance in accordance with clause 16.
(2) This clause does not apply to a member to whom an allowance is payable under any of the provisions of clauses 1 to
10.
Members
12 Constituency members
(1) Each constituency member of Parliament is to be paid„o
(a) a basic expenses allowance at the rate of $7,000 a year; and
(b) a constituency allowance at the appropriate rate specified in clause 14; and
(c) a day allowance in accordance with clause 15; and
(d) a night allowance in accordance with clause 16.
(2) This clause does not apply to a member to whom an allowance is payable under any of the provisions of clauses 1 to
11.
13 List members
(1) Each list member of Parliament is to be paid„o
(a) a basic expenses allowance at the rate of $7,000 a year; and
(b) a day allowance in accordance with clause 15; and
(c) a night allowance in accordance with clause 16.
(2) This clause does not apply to a member to whom an allowance is payable under any of the provisions of clauses 1 to
12.
Part 2
Further provisions relating to allowances
Particular allowances payable under Part 1
14 Constituency allowance
(1) The constituency allowance payable under Part 1 is„o
(a) $8,000 a year for a member for an electoral district listed in Group A:
(b) $11,000 a year for a member for an electoral district listed in Group B:
(c) $14,000 a year for a member for an electoral district listed in Group C:
(d) $16,000 a year for a member for an electoral district listed in Group D:
(e) $18,000 a year for a member for an electoral district listed in Group E:
(f) $19,000 a year for a member for an electoral district listed in Group F:
(g) $20,000 a year for a member for an electoral district listed in Group G:
(2) The constituency allowance is payable under clauses 8(c), 10(1)(b), 11(1)(c), and 12(1)(b).
(3) In this clause, references to Groups are references to the Groups in Schedule E of the 6 July 1998 Report of the
Representation Commission (1996-1999, AJHR, H.1).
15 Day allowance
(1) The day allowance payable under Part 1 is payable if a member is away from the member’s primary place of residence
and is„o
(a) engaged on Parliamentary business; or
(b) in Wellington but unable to attend a sitting of the House or a meeting of a select committee because of sickness or
some other reason accepted by the Speaker of the House as sufficient.
Part 2„ocontinued
(2) However, a day allowance is not payable
(a) to a constituency member in respect of periods servicing that member’s own electorate; or
(b) to a member of the Executive.
(3) The rate of the day allowance is„o
(a) $56 for a day on which the period of parliamentary business is 6 hours or more:
(b) $28 for a day where the period of parliamentary business is less than 6 hours but not less than 4 hours.
(4) The day allowance is payable under clauses 6(c), 7(c), 8(d), 9(c)(i), 10(1)(c), 11(1)(d), 12(1)(c), and 13(1)(b),
and is subject to those clauses.
(5) In this clause,„o
day means a period of 24 hours:
period means the time spent on parliamentary business, including the travelling time required to undertake that
business.
16 Night allowance
(1) The night allowance payable under Part 1 is payable if a member incurs actual and reasonable costs on overnight
accommodation while the member is engaged on parliamentary business. This is normally either„o
(a) when a member who resides outside of the Wellington commuting area is
on parliamentary business in Wellington and could not reasonably be expected to get home by conventional methods or
safely; or
Part 2„ocontinued
(b) in instances when accommodation is outside of the Wellington commuting area and the member is at least 100
kilometres from that member’s primary place of residence and could not reasonably be expected to get home by
conventional methods or safely.
(2) The rate of the night allowance is the sum required to reimburse the member for actual and reasonable costs already
incurred in accordance with subclause (1), except that the sum must not exceed„o
(a) $160 if the accommodation is in commercial premises outside Auckland;
and
(b) $180 if the accommodation is in commercial premises in Auckland; and
(c) $50 in the case of other premises.
(3) The maximum amount that may be paid to any member under this clause by way of reimbursement for overnight
accommodation in the Wellington commuting area, in any period of 6 months beginning on 1 July or 1 January, is $11,000
for a Whip or the Leader of a party and $10,000 for any other member.
(4) The night allowance is payable under clauses 7(d), 8(e), 9(c)(ii), 10(1)(d), 11(1)(e), 12(1)(d), and 13(1)(c), and
is subject to those clauses.
Allowances additional to those payable under Part 1
17. Wellington accommodation allowance
(1) A Wellington accommodation allowance is payable to a member whose primary place of residence is outside the
Wellington commuting area if„o
Part 2„ocontinued
(a) the member is not provided with a residence at the public cost; and
(b) the member uses, in the Wellington commuting area, when the member is in the Wellington commuting area for the
purpose of carrying out parliamentary business, accommodation owned by that member or accommodation rented by that
member on a continuous basis for use in lieu of overnight accommodation; and
(c) the member has elected, by written notice to the General Manager of the Parliamentary Service, to be paid a
Wellington accommodation allowance.
(2) The rate of the Wellington accommodation allowance is the sum required to reimburse the member for the actual and
reasonable net costs already incurred by the member in using that accommodation in lieu of overnight accommodation in
accordance with subclause (1).
(3) The maximum amount that may be paid to any member under this clause, in any period of 6 months beginning on 1 July
or 1 January, is $8,500 for a Whip or the Leader of a party and $8,000 for any other member.
(4) The maximum amount in total that may be paid to any member under this clause and clause 16 by way of reimbursement
for overnight accommodation in the Wellington commuting area, in any period of 6 months beginning on 1 July or 1
January, is $9,800 for a Whip or the Leader of a party and $9,000 for any other member.
(5) At any time while an election under subclause (1) is in force, the member by whom the election was made is not
entitled to be paid a night allowance under clause 16 in respect of accommodation in the Wellington commuting area.
Part 2„ocontinued
(6) A member who has elected to be paid a Wellington accommodation allowance ceases to be entitled to be paid that
allowance if the member, by written notice to the General Manager of the Parliamentary Service, revokes the election.
18 Allowance for purpose of motor vehicle
(1) A constituency member, following each election at which the member is elected or re-elected, is entitled to be paid
an allowance (to be applied in or towards the purchase by the member of a motor vehicle) if„o
(a) the member is a member to whom clause 8(c) or clause 10(1)(b) or clause 11(1)(c) or clause 12(1)(b) applies; and
(b) the member, within 4 months after the date of the return of the writ for the election of the member, notifies the
General Manager of the Parliamentary Service, in writing, that the member wishes to be paid an allowance under this
clause.
(2) The maximum allowance payable under this clause is„o
(a) $7,200 a year for a member for an electoral district listed in Group A:
(b) $9,900 a year for a member for an electoral district listed in Group B:
(c) $12,600 a year for a member for an electoral district listed in Group C:
(d) $14,400 a year for a member for an electoral district listed in Group D:
(e) $16,200 a year for a member for an electoral district listed in Group E:
(f) $17,100 a year for a member for an electoral district listed in Group F:
(g) $18,000 a year for a member for an electoral district listed in Group G.
(3) Subject to subclause (4), if a member of Parliament to whom clause 8(c) or clause 10(1)(b) or clause 11(1)(c) or
clause 12(1)(b) applies elects to be paid an allowance under this clause, the member is not entitled to receive or to be
paid a
Part 2„ocontinued
constituency allowance under any of those provisions in respect of the period of 12 months beginning on the day after
polling day for the election at which the member was last elected or re-elected.
(4) If the amount of the allowance paid to a member under this clause is less than the amount of the maximum allowance
payable to that member under this clause, the constituency allowance payable to that member in respect of the period
specified in subclause (3) must be reduced in proportion. For example, if the member is paid 75% of the maximum
allowance payable to that member under this clause, the constituency allowance payable to that member in respect of the
period specified in subclause (3) is to be 25% of the constituency allowance that would otherwise have been payable to
that member in respect of that period.
(5) In this clause, references to Groups are references to the Groups in Schedule E of the report of the 6 July 1998
Report of the Representation Commission (1996-1999, AJHR, H.1).
19 Car reimbursement
(1) A member of Parliament who uses that member’s own car when travelling on parliamentary business (except where the
travel is undertaken by a constituency member in servicing his or her electorate) is entitled to be paid a car
reimbursement allowance for that travel.
(2) The rates of reimbursement payable under this clause are in accordance with the standard rates prescribed by the
Inland Revenue Department.
(3) Travel within an electorate as part of a journey to or from the House must not, for the purposes of subclause (1),
be treated as servicing an electorate.
Part 2„ocontinued
20 Security system allowance
A member who has a security system installed at his or her primary place of residence is entitled to be reimbursed for
the actual and reasonable costs up to a maximum of„o
(a) for installing the system $400:
(b) for annual costs of monitoring and call-outs $600.
Dated at Wellington this 11th day of December 2001.
H D Peacock, Chairman.
B A Wakem, Member.
W R Mulholland, Member.
______________________________
Explanatory memorandum
1 Salaries
1.1 As in every other year, the Commission has not found it easy to decide what is the appropriate salary level for
politicians. No time is the right time to give a pay increase but, if they are not given regularly, the level of pay
will fall further behind what could be regarded as comparable levels for positions with the same degree of
responsibility, complexity, and workload.
1.2 Sound governance makes an immeasurable difference to the prosperity and well-being of a country. The general public
demand excellence from their politicians but tend to resent any pay rises they are given. The Commission is very
cognisant that, in order to get good governance, Parliament must be able to attract and retain capable personnel.
1.3 The Commission is concerned that the gap between the levels of pay for politicians and comparable positions does not
widen and, accordingly, has granted rates of increase in line with market movements for those comparable positions.
2 Allowances
The allowances have basically been maintained at the same levels as were set in the previous determination with 2
exceptions, namely„o
- the nightly allowance has had its maximum increased from $160 to $180 in respect of accommodation in Auckland, due to
the increased rates being charged in that city:
- if a member could have stayed in commercial accommodation and claimed the nightly allowance but instead stays
privately, a reimbursement of actual costs up to $50 may be claimed. This is in line with a recent suggestion in the
Auditor-General’s report (Parliamentary Salaries, Allowances and Other Entitlements, July 2001). It is seen as fair to
the member, the host, and to the taxpayer.
ENDS