3.7 Remuneration and expenses
All elected members are paid for their time and are expected to dedicate time in their governance and constituency roles in serving Aucklanders.
The Remuneration Authority is an independent body which decides the remuneration, allowances and expenses for:
- the mayor and the minimum allowable remuneration for members of the Governing Body
- chairs and members of local boards [1].
In 2018, a comprehensive review created a governance remuneration pool that determines councillor remuneration, not including the mayor and local board members. The pool reflects the size of the total governance roles of councils rather than the number of councillors. The pool is the total amount that must be paid in remuneration to councillors.
Auckland Council is required to make recommendations to the Remuneration Authority on how to allocate the governance remuneration pool between the councillors. The recommendations must include:
- a rate for base councillor remuneration
- rates for positions of additional responsibility that the Governing Body wishes to recognise.
The Remuneration Authority considers the mayor, other Governing Body members and local board chairs to be full-time. All other local board members are part-time. Visit Elected members' remuneration to find out about the Remuneration Authority determination and elected members’ remuneration for the current year.
In making its determination, the Remuneration Authority needs to consider a number of factors [2]. These are:
- fair relativity with comparable positions
- the need to be fair to the individuals whose pay is being set and to ratepayers
- the job requirements
- the need to recruit and retain competent individuals
- current economic conditions which may lead the authority to set remuneration at a lower rate
- the requirement to reduce chances for types of remuneration to distort behaviour [3].
Check Remuneration Setting for Local Authorities for more information.
What remuneration includes
Remuneration is set annually and includes:
- salaries (of differing roles)
- vehicle mileage allowance for council-related travel
- travel time allowance for trips longer than one hour
- communications allowance (when using their own equipment)
- childcare allowance.
Each year, all local government elected member remuneration is changed on an annual basis. This is based on the same formula that is used for parliamentary remuneration. This happens in the years between the assessments of the governance pool.
Expense and allowance policy
The Remuneration Authority also requires Auckland Council to develop and adopt an expense and allowance policy for elected members. The purpose of this is to set out policies and procedures around:
- principles and scope
- allowances and benefits
- travel rules and processes
- land and sea transport
- air travel
- accommodation
- travel expenses
- professional development programmes and conferences
- catering, hospitality and entertainment
- approval processes
- breach of expense and reimbursement rules.
Under current legislation, elected members are treated as self-employed. This means:
- they are subject to withholding tax
- they are responsible for paying their own ACC payments
- they do not receive council contributions to Kiwisaver or superannuation schemes.
Check ‘Expense policy’ in ‘Auckland Council Elected Members Code of Conduct – Attachments’ for more details about the policy.
Footnotes
[1] Local Government Act 2002, Schedule 7 Clause 6.
[2] Remuneration Authority Act 1977 Section 18. 18A and Local Government Act 2002, Schedule 7 Clause 7.
[3] for example if elected members were to receive an allowance for attending part of a meeting, this could provide an unintended incentive to leave a meeting as soon as the attendance allowance had been earned.