Legal Beagle by Graeme Edgeler

35

MPs' Pay

Parliament's Government Administration Committee is currently considering the Members of Parliament (Remuneration and Services) Bill. It will surprise few of you that I have made a submission. For those interested, it is copied below.

If you have a view on MP's pay, feel free to let them know. There have only been a handful of submissions so far, including one from former National and New Zealand First MP Dail Jones who submits that the former MPs who still get the travel perk shouldn't have to fly economy and should be funded at the level of premium economy airfares. Submissions close today, but it seems to be the practice of the of the Submissions team at Parliament not to close of electronic submissions until a couple of days after the close-off date, so if you want to have a say over the weekend, you'll probably be fine.

You still have a couple of weeks to have your say on the MMP Review as well. Although, if you don't, I won't stop you from complaining. That would be stupid.

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Overview

My name is Graeme Edgeler. I am a Wellington barrister with a strong interest in electoral and constitutional law. I think the Committee for the opportunity to comment on the Members of Parliament (Remuneration and Services) Bill (“the Bill”). I would welcome the opportunity to speak to my submission.
 
I support the passage of this law, which aims to simplify and clarify various matters relating to the funding of members of Parliament.
 
In particular, I support the introduction of an independent process by which MPs’ allowances and services will be determined. In the wake of some of the scandals in the UK, and the mini-scandals here, there is much room for improvement. Whilst it is important that members are provided the facilities to effectively fulfil their roles, the funding should not be able to be used, for example, in a way that tilts the electoral playing field in favour of incumbency.
 
I strongly urge the Committee to voice its support for the proposal of the Law Commission, contained in the Report that has lead to this bill, to extend the Official Information Act to parliamentary agencies.
 
While I do support the passage of the Bill, I submit that it could be improved in a number of respects, and propose the following amendments to the Committee.

Mid-Term List MPs

As you will be aware, under MMP, members of Parliament can enter Parliament other than at an election, following the vacation of the seat held by a list MP. They are declared elected by the Electoral Commission publishing a notice in the Gazette. There have been a few such MPs in each Parliament since the adoption of MMP.
 
I submit that these mid-term list MPs should be paid.
 
The need for the law to permit this is hopefully self-evident, but neither the Bill nor the Civil List Act 1979 provide for it.
 
Clause 11 presently provides that a salary for an MP is payable during the appropriately specified periods for:

  • MPs (whether electorate or list) elected at an election (whether a general election or by-election); and
  • Electorate MPs returned at an uncontested by-election.

It does not state (and nor does the equivalent section in the Civil List Act) that a salary is payable to a List MP returned other than at an election, as occurs whenever the Electoral Commission declares someone elected under s 137 of the Electoral Act 1993.
 
This leaves two interpretation – either there is no period in which mid-term list MPs are entitled to be paid, or such MPs are somehow deemed to have been elected at the general election and are entitled to back pay. Neither interpretation is acceptable.
 
I submit that clause 11(2) should be amended to something like:
 
“(2)     However, if a member of Parliament is returned at a by election that is not contested, or is returned as a result of a vacancy of a seat of a member elected from a party list,—
(a)        subsection (1)(a) does not apply; …”
 
The Committee may wish to seek advice as to whether it would be necessary or appropriate for this legislation to validate past salary and allowance payments made to mid-term list MPs.
 
If the Committee adopts my suggestion, it should ensure that clause 12 would not inadvertently allow a mid-term list member who lost their seat at the election, and who enters within three months of polling day to receive two payments.

Deductions from AWOL Members of Parliament

The primary accountability mechanism for members of Parliament is, and should remain, triennial elections. However, I recognise that, in adopting (and substantially increasing) the provision in the Civil List Act 1979 for deductions from members of Parliament who are absent other than in accordance with the Rules of House, Parliament is acting to raise its public standing, and I support it in this endeavour.
 
As clause 14(4) already provides that being absent in accordance with the Rules of the House does not count as being absent for the purposes of a deduction, and that all legitimate excuses for absence will therefore never be penalised, I submit that there is no reason to allow members of Parliament nine unexplained absences each year before imposing partial deductions from their salaries. The law should simply provide that each sitting day that the member is absent in breach of the rules of the House, the appropriate deduction should be made.
 
I also submit that the deduction should be a percentage (currently proposed to be 0.2%) of the yearly salary of the member, not a percentage of the salary of an ordinary member. A member who receives a higher salary (for example, as a party leader) does so because they have greater responsibility. Their unexplained absence from the House is therefore a greater violation of the public trust, and should be censured accordingly. Failure to apply the same level of deduction to all members would involve holding back bench MPs to a higher standard than more senior MPs. The current figure of $283.60 per sitting day may be 0.2% of an ordinary MPs’ salary, but it is less than 0.07% of the PM’s salary. Whatever the percentage is, it should apply across the board.
 
I submit that the figure adopted of a 0.2% deduction per

sitting day is too low. This would be an appropriate figure if the deductions could be made for non-sitting days as well, but as it is not proposed that they should be, the figure should be arrived at taking account of the average number of sitting days in a year. I agree with the underlying policy as proposed by the Law Commission that a member should not lose all their salary, as there is work outside of the House, but the proposal is rather derisory when the number of sitting days is taken into account: a member who improperly absents themselves from every sitting of the House in a given year would still retain over 80% of their salary.
 
There are 96 sitting days proposed for 2012. Given this level, I submit that a deduction of 0.5% per sitting day would be more appropriate – this would see a member who was AWOL lose a little under half their salary. Few employers would be nearly so generous.

Deductions from Suspended Members

Following a submission I made to the 2011 Review of Standing Orders, the Standing Orders Committee unanimously adopted the following:
 
We recommend to the Government that the legislation to replace the Civil List Act 1979 include a provision to apply salary deductions to members who are suspended from the service of the House.
 
The government’s response to this unfortunately occurred after the introduction of the Bill, but it noted that it considered that consideration of such an amendment would be within scope:
 
The recommendation of the Standing Orders Committee relating to salary deductions for members who are suspended can be considered as part of the select committee consideration of the relevant provisions of the Members of Parliament (Remuneration and Services) Bill.
 
I commend the recommendation of the Standing Orders Committee to you, not lease because it is something that many (including the Speaker) already believed happened. The suspension of a member from the service of the House is a rare event; it is also serious, and warrants a deduction at least as serious as that applying to AWOL members. Because this suspension covers both sitting days and non-sitting days, a deduction of 0.2% per day is appropriate.

Record of Members’ Attendance

In order to meet the interests of the public in holding members of Parliament to account, I submit that the Committee should adopt the recommendation of the Standing Orders Committee:
 
We recommend to the House that, when legislation to replace the Civil List Act 1979 is to come into force, a sessional order be adopted requiring the Clerk of the House to record and publish members’ attendance at parliamentary business and approved absences.
 
The public is entitled to know which MPs are in Wellington doing what we expect of them, and those who are not. An attendance register is the least we can expect.

Three-yearly Parliamentary Salaries

I submit that the level of parliamentary salaries should be set once per term, to take effect for the following term of Parliament. I note that section 19(5) of the Remuneration Authority Act 1977 already permits this, and consider it a proposal that is overdue.
 
The setting of parliamentary salaries for the whole of a term is something for which David Farrar has long advocated. I can do no better than adopt the argument he has presented on his ’blog:
 
Every year the MPs go through a self-flagellation when the Remuneration Authority does their annual pay adjustment for MPs. It is either too much, or it is at the wrong time, or it is backdated etc etc.
 
This will always be the case, as MPs getting pay rises during term of Parliament never will be popular.
 
The easy way to solve this, is what I have long advocated – set the salary and associated terms around three months before each election, for the next term of Parliament.
 
So MPs would get elected to Parliament for a term, on a known salary which remains constant during that term.
 
(http://www.kiwiblog.co.nz/2010/12/mps_pay_should_be_constant_for_the_term.html)
 
Given the particular position in which MPs find themselves, with a three-yearly electoral cycle, this is entirely appropriate. Voters would then be in a position of electing members of Parliament, to set terms and conditions for the term of the Parliament.
 
I note that clause 29 already provides that the determination of services under section 18 happens once each term. This could be amended, or a similar clause added, to provide for the determination of salaries and allowances under section 9 also occurs once each term.
 
If this is not adopted, the procedure by which the Remuneration Authority recommends backdating of MPs salary increases should be removed. The Remuneration Authority should be tasked

with starting its consideration early enough that this is unnecessary. If it is failing a statutory obligation to do it by a particular time, you should sack the members and appoint someone who will.

Travel Entitlements of Former Members

I submit that all provision of travel entitlements for former Members should be abolished.
 
The justification for the continuation of this provision is that MPs at one point gave up a salary increase, and received the travel entitlement instead. That three- or six-year period in the 1970s for which MPs were “underpaid” was remedied with above-inflation salary increases, shortly thereafter. This tradition continues apace, which the salary increases of both ordinary members and ministers still exceeding inflation.
 
The vast majority of former members of Parliament who now benefit from this entitlement never suffered the “loss” that justified it. It was never a condition of their terms of employment, and was not factored into salary determinations in the way that MP’s direct travel entitlements were.

It is now 14 years since the entitlement was abolished for newly retiring MPs. Those who have even the remotest claim to have suffered through its removal have now had a minimum of 14 years in which to enjoy it. This is long enough. Whatever loss they may have endured, they have now been more than compensated.

I accept that former Prime Ministers may be in a different category, but consider that their needs are met by the provision of the annuity.

We can be grateful for the service of members of Parliament, and for the sacrifice of their families, but members of Parliament are well remunerated, and have been for a very long time. There is no justification for continuing this perk, and it should be abolished.

Other Matters

Clause 9 – Differing Salary Levels

Clause 9 permits the Remuneration Authority to provide for a different salary to be paid to a member of Parliament based on the electorate the member represents. It may be appropriate for provision to be made for differing allowances to be paid (or differing levels of support provided) to members of Parliament from a large electorate, but it is not appropriate that the salaries should be able to differ, and I submit that the Committee should amend the provision accordingly.

Clause 12(3) – Payment of former Deputy Speaker

Clause 12(3)(a) provides for the persons who hold officer as Speaker and Deputy Speaker on polling day to be paid as such between polling day and the first meeting of the House following the Polling Day.
 
In respect of the Speaker, this presents no problem, however, in respect of the Deputy Speaker, the provision is a misnomer, and will be of no effect.
 
Section 13 of the Constitution Act 1986 provides that the Speaker continues in office until the close of polling day, but it does not provide that the Deputy Speaker does also. This is backed up by Standing Order 29, which provides that the Deputy Speaker (and the Assistant Speakers) only remain in office for the term of Parliament. As the term of Parliament ends at dissolution/expiry, well before polling day, there is no “person who held office as … Deputy Speaker on polling day” to be paid at the higher rate clause 12 envisages.
 
Accordingly, I submit that the words “or Deputy Speaker” should be deleted from clause 12(3)(a), as they are entirely meaningless under our present constitutional arrangements.

Clause 40 – Annuity Payable to former Prime Ministers

While the payment of an annuity to a former Prime Minister may be appropriate, I do no believe it should be paid while that person remains a member of Parliament, or during the three months after a general election in which that person is effectively being paid as one. The salary, allowances, and support provided to members of Parliament are more than sufficient to provide for whatever work they may be undertaking in their capacity as a former Prime Minister.

Accordingly, I submit that that the words “he or she holds an office for which”, and the phrase “(other than the salary of an ordinary member of Parliament) should be removed from clause 40(3).

Clause 42 – Death of a member while in office

Clause 11(1)(b)(ii) provides that a member’s salary will cease when they die; this clause provides that a salary at the rate of an ordinary member of Parliament is payable to the surviving partner or dependent children of that MP for three months.

As clause 12(2)(b) provides for the cessation of the salary payable to former members, the Committee should consider whether it would be appropriate to amend this clause to allow for the continued payment of a salary to a member’s partner or dependent children for the remainder of the three months that that salary would have been paid for.

It is anomalous that the family of a deceased MP is provided three months support if that member, after their retirement from politics, dies one day before an election that they weren’t running in, but receives no support if that MP dies one day after the election that they weren’t running in. The distinction that the Bill draws is without merit.

Conclusion

I am not convinced that we shouldn’t just determine appropriate salaries for member of Parliament, and simply inflation index them. I anticipate such a proposal may fall on deaf ears, and is possibly outside the scope the Bill, but it is nevertheless something that should be considered for the future.

I submit that the Committee should recommend that the Members of Parliament (Remuneration and Services) Bill be passed, with amendment. I look forward to appearing before the Committee to discuss it further.

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