Public sector pay cuts extended

Commissioners and Crown entities are being urged to take a pay cut, to show empathy with struggling Kiwis.

Meanwhile, senior civil servants and those paid over $100,000 are also being told to not expect a pay rise until after June 2021.

State Services Commissioner Peter Hughes recommended Crown entities follow the example of ministers and public service bosses, in letters he sent out on Tuesday, in which he thanked leaders in advance ‘‘for uniting with New Zealanders’’ over Covid-19.

On April 17, Prime Minister Jacinda Ardern said she, ministers and 34 government department heads would take a 20 per cent pay cut.

The Government was only able to make the pay cut decision on behalf of ministers; department CEOs agreed to the cut voluntarily after discussions with Hughes.

The Government cannot order a pay cut for senior public servants whose pay is set by the Remuneration Authority, or for those Crown entities by boards.

The cuts did not extend to other public service leaders, or Crown entities.

However, Hughes has now written to Crown entities to say visible pay restraint in the public sector was an appropriate response to Covid-19.

He also informed chairs of boards that he would not sanction pay rises. ‘‘We are in an unprecedented time, when many in the private sector are losing their jobs or facing significant pay reductions. Public sector leaders need to consider appropriate actions to take to reflect this context.’’

He had been advised that some Crown entity CEOs and some chairs and board members had already opted for a cut.

‘‘I encourage chief executives to consider taking a similar reduction to their colleagues in the public service. New Zealanders will be looking to us all to demonstrate leadership at this time...’’

Hughes said the voluntary pay reductions agreed by CEOs would not be extended beyond the chief executive level. But he urged restraint in the management of pay for public servants by the vetoing of pay rises or union increases.

His letters were sent to 24 public sector leaders, including the children’s commissioner, health and disability commissioner, retirement commissioner, Independent Police Conduct Authority chair, Electricity Authority chair, Climate Change Commission, Commerce Commission chief commissioner and the Human Rights commissioner.