When I started, my base pay was $329,000 with a $4,100 tax-free allowance. That grosses up to approximately $335,000 adjusting for tax. My income now is $370,000 which incorporates the tax-free allowance that was abandoned several years ago. How has this come about?
The Reserve Bank notes that compounded inflation over the seven years since I have been a judge (Q1 2016 to Q1 2023) is 24.4%. The Reserve Bank’s inflation calculator tells me that the equivalent purchasing power of $335,000 in 2016 as at today requires $416,000. Given that our pay is now $370,000, that represents a $46,000 reduction in real terms in the purchasing power of our pay in the last seven years — about 12.5%.
To put it another way, we now effectively earn what in 2016 would have been about $298,000. That does not factor in the tax increase a couple of years ago from 33% to 39% for income over $180,000. Although a tax for everyone, its untargeted effect is a further reduction in real terms of approximately 3% across our total pay.
So, the total reduction in real terms over the seven years has been about 15.5% — well over $50K in today’s money.
In addition, new judges in that period have had their long leave reduced from 100 days (20 weeks) to 60 days (12 weeks) per five years of service.
I have also run the $240 daily rate through the Reserve Bank inflation calculator. Given that the daily rate has been in effect since prior to Hamish Neal’s appointment (about 1990), $240 then would purchase $509 now. Compounding inflation in that 33-year period has been 112.2%.