PM takes action against backdrop of some of the biggest strikes in a generation by public-sector workers

This article is more than 2 years old

This article is more than 2 years old

Jacinda Ardern has frozen the salaries of New Zealand’s MPs, saying the pay rises were out of step with the wider workforce and were adding to the rich-poor divide.

The radical move has cross-party support from Ardern’s coalition partners, as well as the opposition National party.

MPs’ salaries and allowances would be frozen till July 2019, Ardern said, while “a fairer formula for future pay increases” is developed for those in politics, who earn between NZ$163,000 ($108,000) to more than NZ$450,000 ($300,000).

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Ardern said the freeze was “the right thing to do” and was not about cost-cutting, but making New Zealand a more equitable nation.

The PM was prompted to take action after the Remuneration Authority recommended MPs receive a 3% pay rise, in a year that is seeing widespread strike action by teachers, nurses and other workers across New Zealand.

Ardern earns more than NZ$450,000 a year, making her the fifth-highest paid leader in the OECD, and better paid than Canada’s Justin Trudeau and the UK’s Theresa May.

According to a survey by Stuff, 62% of New Zealanders think the country’s prime ministers are paid too much. Australian prime minister Malcolm Turnbull earns the largest salary of any leader in the OECD.

“It’s about whether or not it’s right that we receive a 3% pay increase that continues to extend that gap between those on the highest incomes and those on lower and more modest incomes,” Ardern told Radio NZ today.

“In the grand scheme of the government’s budget it is not a significant amount of money but this government has been elected off the back – and we have – of the principle that we are lifting the incomes of those in minimum wages ... it does not sit well with me or this government that at the same time we then have increases that are out of kilter with what the average New Zealander is seeing.”

The Green party, the National party, New Zealand First and the ACT party all supported the prime minister’s surprise pay freeze.

Green party Co-leader Marama Davidson said: “MPs are paid well above the average worker, so giving them a percentage rise accentuates their higher pay. When it is right for MPs to get a rise, they should get the same in dollar terms as what the average worker receives.

“It is fantastic that there will be a review into MP pay increases in the long run, it is absolutely right that we interrogate how much MPs are paid to ensure they’re not receiving increases that are unfair compared to other New Zealanders who are experiencing slow wage growth.”

The freeze was broadly welcomed outside parliament, though some political commentators said it was little more than “PR fluff”, and an easy way to appear altruistic.

The freeze comes a week after nearly 29,000 primary school teachers walked off the job, demanding significant pay rises, smaller class sizes and more classroom support.

Last month nurses held their first nationwide strike in 30 years, calling for better conditions and higher pay. A settlement was reached with the government this month.