Government in damage control over pay freeze

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson have both sought to cool the rising backlash against the Government’s effective public sector pay freeze.

Their defence comes as the irate response to last week’s decision continues, with close to 20,000 people signing a Green Party petition against the move over the weekend and unions suggesting industrial action could be on the way.

Ardern is due to meet with the furious union today, and used her regular media interviews to emphasise that some public sector employees would still see increases to their salary, because they would move up progression bands or because cost-of-living increases were built into their collective agreements. This has never been in dispute.

She also cautioned that this was the Government’s ‘‘starting position’’ before collective bargaining with the highly-unionised public sector workforce began.

Separately, Robertson chided the media for calling it a ‘‘pay freeze’’ in a pre-Budget speech in Auckland – like Ardern, emphasising that employees would still move up step-based progression.

‘‘It is important to note that this is not as has been reported, a pay freeze. Pay for public servants such as teachers, nurses and police officers will continue to increase as they move through the pay bands we have previously agreed, pay equity discussions continue and there is still a collective bargaining negotiation to go through,’’ Robertson said.

He also introduced new language for discussing the pay restraint’s bands.

‘‘The guidance breaks down three categories for public sector pay, ‘lift’ [those at $60,000 or below], ‘adjust’ [those between $60,000 and $100,000] and ‘hold’

[those above $100,000].’’

The Government announced last Wednesday it would extend ‘‘pay restraint’’ introduced in the midst of Covid-19 for another three years in a bid to keep public debt low. Ministers have been unable to tell media exactly how much money would be saved, however.

The pay restraint is technically ‘‘advice’’ for the public sector but all Government departments and many Crown entities are required to follow it.

It sets out that no-one earning more than $100,000 should see an increase, and no-one earning more than $60,000 should see an increase except under exceptional circumstances. When discussing the issue last week, Robertson and Public Service Minister Chris Hipkins were clear that those earning between $60,000 and $100,000 would only get increases in rare cases and with the permission of the Public Service Commission.

‘‘For those in between, pay adjustments would be considered in special circumstances, but they will need to work through the Public Service Commission,’’ Hipkins said.

The Public Service Association (PSA), the main union for the public sector workforce, said it was hopeful the tone-change reflected a change in position from the Government.

‘‘The way they talk about it seems to be changing, and we hope that’s not just a messaging strategy,’’ PSA national secretary Erin Polaczuk said.

‘‘We hope they have genuinely listened to workers and felt how much hurt and anger is out there.’’

‘‘Pay for public servants . . . will continue to increase.’’ Grant Robertson

Finance Minister