Friday 24 August 2018

“Keep Cutting, Jacinda!”

You Gotta Serve Somebody: Is it more accurate to describe MPs as employees of their party? Certainly, the master-servant characterisation works much better in this context than in any other. Without a party, becoming an MP is virtually impossible. Moreover, to become a parliamentary candidate, individuals are not only expected to sacrifice their judgement to the opinion of their party – they are required to.

JACINDA JUST FROZE her colleagues’ income for at least a year. Politicians, she reckons, don’t need any more money. With the average backbench MP’s salary topping $160,000 per annum, most of us would agree. Vehemently.

I say salary, but that’s just for convenience. The truth is, I don’t know what to call the income we taxpayers settle on our political representatives. The word “salary” implies some sort of master-servant relationship. That is certainly the talkback hosts’ assumption when they refer to the members of the House of Representatives as: “our employees in Wellington”.

Except they’re not our employees, they’re our representatives – and being an elected representative of the people is very far from being an employee of the people, let alone their servant!

The English philosopher and statesman, Edmund Burke (1729-1797) is often quoted on what the voters might reasonably expect from their Member of Parliament. In his famous “Speech to the Electors of Bristol” (1780) he wrote: “Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.”

Less frequently quoted, but even more apposite, is Burkes’ contention that: “Parliament is not a congress of ambassadors from different and hostile interests; which interests each must maintain, as an agent and advocate, against other agents and advocates; but parliament is a deliberative assembly of one nation, with one interest, that of the whole; where, not local purposes, not local prejudices, ought to guide, but the general good, resulting from the general reason of the whole.”

If only! In the 238 years since Burke delivered his famous speech, the British parliament (and our own) has ceased to be a collection of individual representatives dedicated to the “general good” (if such a disinterested body of politicians ever actually existed!) and has indeed become a “congress”. Not of ambassadors, to be sure, but of political parties. These institutions are, indeed, representatives of “different and hostile interests”; “agents and advocates” for every kind of purpose and prejudice; and for all manner of causes.

Is it more accurate, then, to describe your MP as an employee of his or her party? Certainly, the master-servant characterisation works much better in this context than in any other. Without a party, becoming an MP is virtually impossible. Moreover, to become a parliamentary candidate, individuals are not only expected to sacrifice their judgement to the opinion of their party – they are required to.

This raises all manner of problems, however, because, as the American novelist, Upton Sinclair (1878-1968) shrewdly observed: “It is difficult to make a man understand something when his salary depends upon him not understanding it.”

If the only way to become – and remain – a parliamentarian is by the grace and favour of one’s political party; and if the financial reward for being an MP is in excess of $160,000; then our political parties are particularly well set up to make “their” MPs understand only what the party leaders want them to understand – on pain of becoming instantly, and in most cases, considerably, poorer.

It is probably pertinent to observe at this point that an income of $160,000 per annum places its recipient in the top 5 percent of New Zealand’s income earners. At more than three times the medium income, it is difficult to see how any person in receipt of such a handsome living could long retain any sort of fellow-feeling with those required to live in more straightened financial circumstances. When one is earning such a large sum of money it is difficult to resist the whispered conclusion of one’s fattened ego that it is entirely proper and well-deserved. It is then but a small step to the conviction that the misery of others is similarly appropriate and well-deserved.

The legends live on in the Labour Party of its founding fathers living no better than their working-class supporters, and how prone they were to share with the most destitute of their constituents what little remained of their meagre parliamentary stipends. Such tales would certainly explain why socialism remained for the First Labour Government something much more than a mere rhetorical flourish; and why their ability to understand things was so refreshingly unimpaired.

So, keep cutting Jacinda! The less our MPs take, then, assuredly, the more likely they are to give.

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 24 August 2018.


Kiwiwit said...

Well said. The same applies to public servants. I think the members of the governing class sipping their lattes in Wellington cafes have no idea how little many people in the provinces earn (assuming they are employed at all).

Sam said...

Well MPs salaries really started to move ahead in the last 10 years. Now I'm not saying that high MPs salaries make them superior or smarter than other public servants but that's also desires the point because democracy has a price. I think if MPs want exorbitant salaries they should be able to bring in value and growth. So to be unaware of where GDP is headed I think would be taking an important tool out of the tool kit because of an unwillingness to use it. We're in an inflationary environment which should generally be good for asset prices and yes it's all bullshit but it keeps the dogs at work.

Guerilla Surgeon said...

"When one is earning such a large sum of money it is difficult to resist the whispered conclusion of one’s fattened ego that it is entirely proper and well-deserved."

And the more they are separated from the people they are supposed to represent – although this applies more to labour MPs than to national MPs I suspect. The original reason for paying MPs AFAIK was to make sure that ordinary people rather than just people of independent means could actually become an MP. We seem to have gotten a little beyond this – as these guys are making at least 3 times the average wage, and as Winston Peters once put it – even though I might hesitate to quote him – "They'd crawl over broken glass to get the job."
And let's not forget the perquisites – or as Winston Peters once put it :) "baubles" of office. Particularly the right to spend over 100 grand on travelling around the countryside trying to increase the chances of your being re-elected.
I think what hurts on that score is not quite so much the spending, but that certain members of the press seem to think that it's justified.:) No doubt middle to upper management.
On the other hand, what makes me laugh is that some conservatives seem to think that an MP's salary being more than you'd ever make in your day job as an insult. I think taking a pay cut to be an MP says far more about you in a negative way to be honest. Because the idea of public service seems to wither away very quickly and you are simply trading money for power. A bargain for some people I guess.

KJT said...

Political types seem to be blind to the self serving elitist arrogance of that, often used, Burke quote.

Kat said...

Well Jacinda just cut Clare Curran loose from cabinet. Guess that's a demotion in "salary" also.

sumsuch said...

Edmund Burke's comment on electors voting for a MP's conscience and decision-making flies in the face of your support for the waka-jumping leglislation. Still seems 50/50 to me.

Not that I have much regard for him despite his eminently quotable lines. The ideologue of the 40 year aristocratic repression that followed the French Revolution. He supported the American Revolution. I prefer Tory, Anglican, prejudiced Dr Johnson with his condemnation of the Yanks' utter hypocrisy re freedom.

Wayne Mapp said...


You are not correct that there has been a big increase in MP's salaries in the last ten years.

According to Stats NZ average salaries in 2008 were $37,960 and in 2018 were $51844, an increase of 37%. In 2008 MP's salaries were $131,000 and in 2018 are $163,961, an increase of 25%. One of the reasons why the increase is relatively low is that the John Key govt froze MP's salaries in 2009 and had a very low increase in 2010. The GFC being the reason.

In my view Jacinda is playing populist politics, though I have to admit it is quite effective. It fits her narrative that the well off got a lot more well off (in wage and salary terms) under the last govt, even though it is false. What has occurred is an increase in asset values, housing prices being the most obvious. It will also enables her to control wage and salary increases in the state sector. Nurses have got the big increase (around 9% per annum) but it looks like teachers and others won't do nearly so well.

The big increase in MP's salaries occurred between 2000 and 2008. In 1996 when I was first elected I got $75,000 as an MP. By 2008 it had increased by 75%. That was a much bigger increase than occurred in my former profession as an associate professor. In fact in 1996 the salary of an associate professor and an MP were virtually the same. Quite a bit of the increase of MP's salaries occurred in the early 2000's when a lot of allowances were consolidated into the salary.

greywarbler said...

Some confusing comments here:
Sam says: democracy has a price. I think if MPs want exorbitant salaries they should be able to bring in value and growth....
We're in an inflationary environment which should generally be good for asset prices and yes it's all bullshit but it keeps the dogs at work.

We are talking about politician's salaries. Not private sector CEO's.
They aren't and can't be the same thing. Politicians should be looking out for the whole country and trying to have it running well, looking at basic domestic trading that enables a decent living standard and supply of resources, and the opportunities from branching out to overseas markets so as to import needed machinery and other goods so that there is export income to pay for the imports. Then there is the wish for travel to get to know other parts and cultures of the world which has to be paid for. And the ability to have some capital borrowing to enable upgrades of infrastructure would be useful.

An apparently objective view of our economic progress provides in its Assessment at the end of the document:
New Zealand might have specialized in customized and skill-intensive manufactures, but the policy environment was not conducive to the promotion of excellence in niche markets. Between 1938 and the 1980s, Latin American-style trade policies fostered the growth of a ramshackle manufacturing sector. Only in the late eighties did New Zealand decisively reject this regime.....

Clearly, New Zealand’s problems were not all of its own making. The elimination of agricultural protectionism in the northern hemisphere would have given a huge boost the New Zealand economy. On the other hand, in the period between the late 1930s and mid-1980s, New Zealand followed inward-looking economic policies that hindered economic efficiency and flexibility.

If this was what politicians saw as appropriate for their role to produce good outcomes for the people they would be doing their job well. But these parameters have been abandoned under the influence of the wealthy in this country who want to have their cake and eat it too. It really started, to my mind, when we made the decision to turn our eyes to exports, and completely abandon domestic self-sustainability in the 1980's. So we have the economists playing with a model that enables that, and results in a dual-inflation scenario; one for the ordinary folks, low, and a flexible one for the wealthy and aspirational rentiers mainly affecting housing.

g said...

further to my earlier comment I looked more at the economic and trade analyses that are on the internet. Why politicians should be paid less, and according to outcomes could be argued against the backdrop of the post-Rogernomics economic churn.
Richardson's first budget in 1991, nicknamed the 'Mother of all Budgets',[127] attempted to address constant fiscal deficits and borrowing by cutting state spending. Unemployment and social welfare benefits were cut and 'market rents' were introduced for state houses – in some cases tripling the rents of low-income people.[128] Richardson also introduced user-pays requirements in hospitals and schools.[127] These reforms became known derisively as Ruthanasia.

By this time, New Zealand's economy faced serious social problems; the number of New Zealanders estimated to be living in poverty grew by at least 35% between 1989 and 1992;[124] many of the promised economic benefits of the experiment never materialised.[129]

Gross domestic product per capita stagnated between 1986–87 and 1993–94, and by March 1992 unemployment rose to 11.1%[130] Between 1985 and 1992, New Zealand's economy grew by 4.7% during the same period in which the average OECD nation grew by 28.2%.[131] From 1984 to 1993 inflation averaged 9% per year, New Zealand's credit rating dropped twice, and foreign debt quadrupled.[124] Between 1986 and 1993, the unemployment rate rose from 3.6% to 11%.[132]
Most goods imported into New Zealand have no import tariffs. Tariffs of five percent apply to some imported goods that are also made here including textiles, processed foods, machinery, steel, and plastic products.

Tariff and rules of origin functions moved to Customs
Tariff implementation and concessions and rules of origin policy functions transferred from the Ministry of Business, Innovation and Employment to New Zealand Customs Service in 2012.
Applications and decisions to remove or amend tariff duties that were published prior to 1 December 2012 can be found on the New Zealand Customs Service website.

There is a very extensive report from the World Trade Organisation (1996) on what NZ has done to open itself to the winds of the world, that is full of praise and self-satisfaction in the NZ part. But wellbeing of the economy in world economic terms is the subject, not that of the
The headings of - Trade Policy Framework, followed by Trade Policy Features and Trends - Policy Instruments, and Sectoral Policy patterns are interesting. As is the whole thing, clear and well written, but takes some getting through.

Nick J said...

Well said Kiwiwit, go to the cafe in the old Defense building and observe how expensively dressed the public servants are. As such they have never had to take a commercial risk, use their own capital, find revenue streams to pay for their salaries. They are simply a cost upon productive people whose tax supports their lavish salaries. Jacinda would do well to take the axe to them and distribute the excess cash to those in real need.

Guerilla Surgeon said...

25% of $131,000 is a damn sight more than 25% of the average wage. And an increase of about $32,000 a year was pretty much equal to the average wage. Which I wouldn't mind quite so much if I was getting some value out of it.

pat said...

The problem is the entire political class, for that is what they are, lifetime professional politicos are totally removed from real life concerns being so insulated as they are. Long gone are the days when working real life folk , after decades of real life offer their experience to represent their fellow citizens....a problem that used to be largely confined to the parties of the right.

sumsuch said...

As an ex-Stats NZ survey interviewer in the early 2000s I remember their pinched approach to our pay while moving from Molesworth St to a glass cathedral harbourside. Which later was rendered uninhabitable by the Kaikoura earthquake (?). There is a whole story there if there were any investigative journalists. Wouldn't reflect well on the Clark Govt's loosed spending. Though my own bosses had an anti-union agenda. It's a blunt instrument, spending, over- or under- seem to be the choice. Certainly right for any demo-cratist govt worth its ideas ( was 'balls', but...) to limit the pay of senior public 'servants'.

Sam said...

Yeah hi Wayne. There's this word "decouple," like "deregulation" and "hedge" are the most over rated positions to take. They're just a wives tale. When the U.S dollar was "decoupled" from the gold standard, the USD had to be "reattached" to the U.S navy almost immediately because instead of inflating the gold price the Washington consensus had to inflate the military industrial complex so to continue the Vietnam War. Ever since gold as a "hedge," well a hedge is supposed to insure against sovereign risk, but gold has been going sideways for the last ten years during some terrible decisions made, the European debt crises is forming, America will be dragged in, the last central bank with a clean balance sheet left is the Euopean central bank so when they run out of bullets this to big to fail policy will go belly up.

I mention all this because even you state that the previous government had to "decouple" MPs salaries from performance indicators, OK MPs vote on there own salaries but no one rioted. But my point is they had to "reattach" salaries almost immediately. It's not a perfect system, not by along way. But if it is true that New Zealand's parliament is full of dud MPs then they will learn. They will learn. The public will teach dud MPs how to be humble. Again it's not a perfect system, but we know the alternatives don't work at all the way normal people think it works. So I'd kindly suggest when you see your collages next, that you teach them how not to be dud MPs.