Govt faces grilling over public sector pay freeze

The Government’s decision to freeze the pay of many public sector workers has spilled into Parliament.

Greens and National put pressure on the Government during Question Time yesterday.

Ministers faced heat on the mounting bill for consultants, with the total cost increased under Labour despite attempts to bring it down.

Green Party public services spokesperson Jan Logie asked Finance Minister Grant Robertson whether he was ‘‘happy to grow the economy through astronomical levels of housing debt but not through higher wages for our teachers, our nurses, and our core public servants?’’

Robertson wouldn’t answer that question, saying he rejected its premise.

The Government’s focus was on lifting the incomes of the lowest paid, while keeping an eye on debt levels, he said.

‘‘Our recovery from Covid-19 has to be about getting the balance right.

‘‘We also owe it to future generations to reduce the higher level of debt that we are taking on,’’ Robertson said.

National’s Mark Mitchell accused the Government of pilfering the pay packets of nurses and teachers because it had let the salaries of ‘‘Wellington bureaucrats’’ increase by $1.3 billion in three years.

But Public Service Minister Chris Hipkins shot back, saying the bureaucrats Mitchell was talking about included the ‘‘500 plus staff employed by MBIE to protect our border against Covid19’’.

Data from Te Kawa Mataato – the Public Service Commission – showed the core Crown wage bill is $8.4b, up 8.2 per cent from $7.8b in 2019.

The total Crown wage bill, which includes district health boards and state-owned enterprises, is $27.7b, up 7.1 per cent from $25.9b in 2019.

Hipkins appeared at pains when announcing the pay freeze on Wednesday to say the pay

freeze was different to the one announced by National in the wake of the global financial crisis. This was accompanied by a cap on core public servant numbers and led to an explosion in the use of consultants and contractors in the public service.

‘‘We haven’t put that arbitrary cap back in place because ultimately we want the public service to do things in the way that is best and ultimately building up public sector capability is best,’’ Hipkins said on Wednesday.

Hipkins said he would put ‘‘scrutiny’’ on what the public sector was spending on consultants.

Despite the Government’s commitment to building the core public service, the amount spent on consultants and contractors has continued to rise since Labour took office, to $628 million in 2019/20, although the numbers are measured slightly differently now than in 2017.

When Hipkins lifted the cap on core public service numbers, the amount spent on public sector contractors was $550m.

‘‘The total cost to taxpayers of contractors and consultants up to June last year (2017) was more than $550 million.

‘‘This is an increase of $272m – nearly double – on the amount spent in 2008/09, before the cap was introduced.

‘‘We want to bring this spending back down over time and invest any savings in permanent staff,’’ Hipkins said in a statement at the time.

Hipkins said there were some good reasons for the spend on contractors, like people being employed on the Covid recovery.

However, overall he said he would like to see the number of contractors trending down.

‘‘Our recovery from Covid-19 has to be about getting the balance right.’’ Grant Robertson Finance Minister

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