Ardern takes pay cut as virus hits NZ economy

New Zealand Prime Minister Jacinda Ardern announced yesterday she will take a 20% pay cut in a symbolic act of solidarity with people struggling financially during the coronavirus pandemic.

Ardern said her personal salary, those of her fellow ministers and of top public servants would be slashed by a fifth for six months. The move will see Ardern’s annual pay fall from around NZ$470,000 (US$285,000) to NZ$376,000, costing her about NZ$47,000 over the six-month period.

“While it in itself won’t shift the government’s overall fiscal position, it is about leadership,” she told reporters. “This was always just going to be an acknowledgement of the hit that many New Zealanders will be taking at the moment.”

The centre-left leader said the cut would not be implemented across the public service. “Many people in our public sector are frontline essential workers - nurses, police, healthcare professionals,” Ardern said. “We are not suggesting pay cuts here, nor would New Zealanders find that appropriate.” New Zealand is in the midst of a four-week Covid-19 lockdown that has paralysed the economy, with thousands of jobs losses already announced.

Economic modelling released by the Treasury department this week predicted unemployment — currently about 4.0% —could soar to almost 26% in a worst-case scenario. Ardern said her wage cut was a small contribution to easing pay inequalities in society. “If ever there was a time to close the gap between different positions, it’s now,” she said. “This is where we can take action which is why we have.” Opposition leader Simon Bridges said that he would also take a 20% pay cut.