The Government has today ruled out any pay increases for those earning over $100,000 and senior leaders over the next three years.

The Government’s Workforce Policy Statement, issued today, sets out its expectations for pay and employment relations in the public sector, Finance Minister Grant Robertson said.

“New Zealand has had an exceptionally successful health and economic response to Covid-19. This has been supported by the Government taking on debt for investments like the wage subsidy that protected jobs, supported businesses and ensured the economy was ready for the recovery,” he said.

“As the recovery gets underway, we are keeping a close watch on the debt taken on during Covid-19 to support the economy. Just as businesses are making decisions as they plan for the recovery, our responsible economic approach means the Government is faced with choices about where new spending is targeted.”

Last year the Public Service Commissioner issued guidance to Public Service agencies asking them to have nil or minimal pay increases for public servants until June 2021.

“Today the Public Service Commissioner is updating that guidance to make clear that pay restraint will need to continue to be exercised across the Public Service for the next three years,” Public Service Minister Chris Hipkins said.

“The updated guidance will continue to mean no pay increases for those earning over $100,000 and senior leaders within the public service. Any increases will be targeted to lower-paid public servants, largely those earning below $60,000, who account for about 25% of the public sector.

“We want to see those on lower wages be the focus of any increases in pay.

“This is about prioritising spending. The policy will also help protect jobs by taking financial pressure off the public wage bill.

“It will not impact the work we are doing within the Public Service to close gender and ethnic pay gaps.

“The public service is doing a good job implementing the Government’s COVID-19 response, and we ask they lead the way in supporting the Government as we ensure our spending is targeted to where it is needed most,” Chris Hipkins said.

“The guidance is consistent with the decision last year by the Remuneration Authority that Ministers and MPs would not be getting pay rises for three years because of the COVID-19 economic environment,” Chris Hipkins said.

“The Public Service Commissioner, who sets the pay of Public Service Chief Executives, will also not be increasing their pay.

“Our public service is world class and the Government is committed to ensuring it is well-positioned as a modern employer.

“We want the public service to use modern, progressive employment practices, and be a great place to work. We also want a productive unified workforce which is grounded in the spirit of service,” Hipkins said.

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