Is the New Zealand prime minister paid too much? I think so, and so do voters. But another way to ascertain whether they get too much is to compare their salary with that paid in other democracies. A recent Economist magazine has attempted to compare the remuneration of various countries’ political leaders by taking the politician salary relative to that country’s GDP per capita. Such a exercise thus takes into account the different ‘relative buying powers’ of the various salaries. The calculation shows that New Zealand pays a very generous salary to the prime minister – the sixth highest out of the 22 countries studied. Apparently John Key earns more (relatively) than other leaders like Barack Obama, Angela Merkel, Julia Gillard and David Cameron. At $393,000 a year, Key’s basic salary is almost ten times the GDP per person of $46,683. Is this too much? [Read more below]
The Economist’s methodology isn’t perfect (see the comparison chart below). After all, should we be measuring all remuneration in society by how they compare to GDP and other countries? But it does allow some sort of relativity to enter into our determination of how much politicians should be paid, rather than using the current method which is to compare politicians with other supposedly equivalent private and public sector jobs. But a better comparison would be to compare these remunerations to average incomes and wages, and tie it to these somehow. For example, the Stuff article points out that ‘The average New Zealander aged 15 and over earns $23,660 before tax from wages and salaries as of June 2009, Statistics New Zealand figures show’. So perhaps its time to have a debate about linking the pay for politicians to these types of figures.
Obviously there are some politicians how don’t care how much they’re paid. John Key – with a personal fortune of something like $50m – doesn’t need the money. And when he ran for office he promised to donate all of the prime minister’s salary to charity. It’s being reported that he donates ‘part of his salary to charity’. Why not all of it, as promised? While this is probably viewed by Key as a personal issue, since he campaigned on this promise, it’s now probably fair for the public and media to ask for the details of how much he gives, and to whom does his patronage advantage?
The issue of politician pay is not going away. In some countries, the politicians are taking a pay cut in these austere times. Hopefully there will be increasing pressure for our own political class to cut back too.