SOE chiefs warned off pay rises

The Government is poised to send a clear message to the bosses of New Zealand’s biggest state-owned enterprises: Don’t give yourselves a pay rise this Christmas.

That includes the likes of Air New Zealand boss Greg Foran, and the directors of some of the country’s biggest electricity companies.

The letter will make it clear that there is “a period of pay restraint within the public sector,” according to Finance Minister Grant Robertson.

“One of the things we all know in the Covid environment we are in now is that it will be a period of pay restraint within wider public sector.”

The message will likely come in the form of a letter of intent — something ministers often send out to their ministries and departments when a new government is elected.

“Clearly, Covid-19 has had a big impact on the whole country — I don’t think people would expect anything less,” Robertson said.

He added that all New Zealanders have been going through a very challenging period. Robertson would not go into detail as to what that letter would explicitly say. “All I’m saying is everyone will understand this will be a period of pay restraint.”

Minister of State-Owned Enterprises David Clark was similarly tightlipped — he would only say the letters were “still in development”.

“I’ll have more to say when they [the letters] are finished out and ready to send.”

State-owned enterprises are partly government-owned — Air NZ, Mercury, Genesis and Meridian are all 51 per cent owned by the Government.

But they are all listed on New Zealand’s stock market. As such, the Government cannot explicitly direct bosses not to increase their pays. But ministers are within their rights to make their expectations to these companies known.

Air NZ directors get $100,000 a year. The chairman gets $270,000 and the deputy $114,000. Mercury’s eight directors shared $990,000 in the 12 months to June 2019. Last year, Robertson asked the chairs of the country’s three biggest power companies and Air New Zealand not to give themselves and other directors pay rises.