Second Round of Pay Hikes for Federal MPs in 3 Months

While Australia's minimum wage earners were given a 2.9 per cent pay increase beginning July 1 which is equivalent to a $17.10 per week boost, federal MPs and other officials got their second salary hike in three months.

The second pay hike is a 3 per cent increase equivalent to $5,550. It would be on top of a $44,000 salary increase given three months ago. The Independent Remuneration Tribunal granted the salary hike.

Besides the pay boost, backbenchers will receive $106 more weekly which increased their annual salaries to $190,550.

Prime Minister Julia Gillard also got a hefty pay rise by $14,430 which increased her annual wage to $495,430, higher by $130,000 from a year ago.

With the pay increase awarded in March, the MPs are now earning an additional $1,000 per week compared to 12 months ago.

Unions have complained of the small pay increase granted to minimum wage earners. In contrast, the salary raise given to federal legislators is almost twice the yearly inflation rate.

"The reality of the situation is that the cost of many essential items like food, water, electricity and petrol have all jumped this year. We need to reflect this.... Forty-five cents an hour more for people on the minimum wage will not enable them to keep up with the cost of living and they will continue to struggle," The Courier quoted United Voice Queensland Secretary Gary Bullock.

In 2008, Kevin Rudd blocked a pay increase for MPs, but the legislators removed the veto power this year. The tribunal justified the pay hike to ensure Australian MPs are not left behind compared to other public sector employees.

However, Greens leader Christine Milne spoke against the pay hike.

"When the government is saying it can't afford to give people struggling on Newstart an extra $50 a week to just get up to livable levels, and the minimum wage has gone up $17.10 a week, a $100 a week pay rise for politicians is hardly appropriate," Ms Milne said.

"If the nation can afford this, it can certainly afford to help our poorest people," she said.

Graham Richardson, a commentator and former Labor powerbroker, defended the hefty wage increases to MPs. He pointed out that few private companies pay their chief executives less than half a mission dollars while young merchant bankers earn an average of $300,000 per annum.

He said the prime minister should be paid a minimum of $1 million and ministers $500,000.