John Key Disingenuous Over MP Salaries


John Key relies on short memories as he expresses concern about the level of the increase to MP salaries.  Most people are unaware that in 2012 he pushed through legislation to lock in special annuities for former Prime Ministers and their spouses and included travel allowances. These annuities and travel allowances amounted to $1.2 million between 2009 and 2012 and he and his wife will enjoy considerable financial benefit from the legislation when he ceases to be Prime Minister.

The annuities were recommended over 50 years ago when there were fewer employment opportunities for former Prime Ministers, and their spouses were less likely to have independent incomes. Spouses are entitled to half the annuity on the death of their husband/wife and all receiving the entitlement have enjoyed annual increases of around 4.5% (well above inflation). There seemed to be no good argument to continue with the payments and allowances especially when all surviving former Prime Ministers were still earning substantial incomes. When David Lange became a backbench MP he suggested suspending the payment of the annuity while he was still receiving an income from the public purse.

Former National Prime Minister, Dame Jenny Shipley, has done particularly well from the arrangement. She already has a substantial personal income from her own business interests, her past directorship of Mainzeal (she resigned two months before it went into receivership), being on the board of the China Construction Bank and her chairing of the board of Genesis Energy Ltd. Gerry Brownlee was also very generous in appointing Shipley to an earthquake review panel and then pushing for $1000 a day payments ($550 dollars above the previous $450 maximum). The annuity had given Dame Jenny an extra income of $55,412 between 2009-12 and she had benefited from $55,518 worth of travel (a total of almost $111,000).

It does appear that manipulating the system for personal gain (and for that of their mates) is what National do well. Most people have now forgotten Bill English's accommodation allowance fiddle that saw him reluctantly pay pack $32,000 for claiming an allowance for living in his own $1.2 million home. As is usual with National Ministers the morality of claiming such allowances, when so many New Zealanders are struggling, does not figure in their thinking. If "it's pretty legal" it's obviously alright (in Steven Joyce's words).

John Key loves to shift the responsibility of any controversial decision away from himself and his caucus. He was able produce a letter suggesting to the Remuneration Authority that he felt a nil increase, rather than the 5.4% increase, for MPs was more acceptable. Key explained how MPs and himself were powerless to change the decision or how the Authority carries out its duties. This seems odd considering the power that Governments have to revisit legislation and the number of times urgency has been used to rapidly make changes. While there seems to be nothing that can be done about the MPs recent windfall the Government went to extraordinary lengths to block the legal rights of family caregivers to seek financial support.

It is a pity that short memories do not allow most people to spot the crocodile tears glistening on the Prime Minister's cheeks.

Postscript: Key will get a $24,000 increase to his salary while in Invercargill the median annual income from all sources is $27,400. While few workers now get backpay when new agreements get negotiated, both Mike Sabin and former National MP Claudette Hauiti will enjoy receiving a few extra thousand dollars shortly. 

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