Pay rise for Prime Minister and MP’s

Members of Parliament (MPs) and the Prime Minister in New Zealand are set to receive a salary increase.

The Prime Minister’s salary will see a rise from $471,000 to $484,200, eventually reaching $520,000 by 2026. The Deputy Prime Minister’s salary will increase to $344,100, while Ministers inside the Cabinet will earn $304,300 and Ministers outside $256,800.

The decision has been made by the Remuneration Authority. This independent body, which sets pay for public office holders, announced that MP salaries would rise by 2.8%, effective from last October.

The increase will bring an ordinary MP’s salary from $163,961 to $168,600. Additionally, there will be further increases: 2.9% in July, 2.4% next year, and 2% in 2026.

Despite the raises, current Prime Minister Christopher Luxon has stated he does not want or need the increase and plans to donate his additional earnings to charity.

This decision marks the first pay rise for New Zealand politicians in over six years and comes after a comprehensive review that compared their salaries with those in other Westminster-style democracies and both the public and private sectors in New Zealand. The findings indicated that New Zealand MPs’ salaries were lower than nearly all other comparisons.

The Remuneration Authority is required by law to consider the economic conditions when setting these rates, and in this review, they found no compelling economic reasons to withhold salary increases. This contrasts with actions taken in 2018 and 2020 under former Prime Minister Jacinda Ardern, who implemented a pay freeze and a pay cut during the Covid-19 pandemic, respectively.