Big incomes helping Dunedin

The importance of the health and education sectors to Dunedin has been highlighted by figures showing more than 1100 University of Otago and Southern District Health Board staff are each paid more than $100,000 a year.

Figures released to the Otago Daily Times under the Official Information Act showed 547 academic staff and 87 general staff at the university earned more than $100,000 in the 2012-13 financial year.

Of those, 143 earned between $150,000 and $199,999, 20 between $200,000 and $299,999 and one more than $400,000 - presumably vice-chancellor Prof Harlene Hayne, who, according to the State Services Commission, earned $520,000 to $529,999 in 2012-13.

Based on this year's census data, which showed 3702 people living in Dunedin earned more than $100,000, university employees make up about 15% of the city's workers getting more than that figure.

The number at the health board on more than $100,000 climbed 10% to 496 in 2012-13. There were 447 the previous year, the board's 2013 annual report shows. Otago Chamber of Commerce chief executive John Christie said the figures showed the importance of the education and the health sectors to Dunedin's economy.

''You would expect that you would be highly paid in the positions we have in those sectors, particularly when we have got senior lecturers and medical staff [and] in a lot of cases they have to be paid rates that are attractive in an international market,'' he said.

Having high income earners was important ''purely because those that are in that position with a higher disposable income are more likely to spend''.

''It's those people that are earning high levels of income that can afford to buy properties and other things that the city has,'' Mr Christie said.

Of the 496 health board members on more than $100,000, 376 were medical or dental employees (2012: 345 medical or dental).

The top earner got between $510,000 and $520,000, more than $120,000 less than the previous year's top pay.

The unidentified employee is probably a clinician, because chief executive Carole Heatly's remuneration package was $430,000 to $440,000. Hers is the only salary identified by role.

If part-time salaries were rounded to full-time, the number paid more than $100,000 would swell to 692 (2012: 639).

Executive managers received pay packages (including superannuation) worth $2.458 million, comprising 9.5 full-time positions (2012: $2.737 million, 10.2 managers).

Ten employees were paid personal grievance payments, ranging from $64,000 to $2000, totalling more than $236,000.

Remuneration to board members was $341,000, compared with $328,000 last year.

The board posted a deficit of $11.9 million.

When contacted, chairman Joe Butterfield declined to comment on the increase in staff paid more than $100,000. Asked how many staff were paid less than the living wage of $18.40 an hour, he had ''no idea''. The ODT has lodged an Official Information Act request seeking the number of staff paid less than $18.40 an hour at the board, information which is not included in the annual report.

The board employs about 4500 staff members (3600 full-time equivalents).

University director of human resources Kevin Seales said the university had ''been trying to pay our academic staff as much as we can, because of the competitiveness issues with other countries''.

He referred to a 2012 report by Deloittes, which showed the average minimum rate for New Zealand professors, of $US91,500 ($NZ111,700), was below the main countries New Zealand competed with, including Australia, which had an average minimum rate of $US109,600 ($NZ133,800).

Mr Seales said money was not the main reason why academics chose to work at Otago - the availability of research funding and the quality of research teams were more important factors.

However, if the pay was too low it could turn off some staff.

Asked if professors were paid too much, Mr Seales said: ''You have got to look at what it takes to become a professor. This is a highly specialised and highly skilled workforce we are talking about here.''

The university's pay scales showed that as of June, the starting rate for non-medical and dental professors was $143,003, with a top rate of $174,609. The starting rate for medical and dental professors was $176,912, with a top rate of $196,882.

The Deloittes report showed the university's pay rates for professors was at the higher end of the scale compared with other New Zealand universities.

All up, the university paid 10,636 employees last year, the vast majority of whom were based at its Dunedin campus. Staff salaries are expected to cost the university $340 million next year.

Is this good?

Interesting that one of the first things John Key did on assuming office was to substantially reduce the top tax rates. Now we hear of the substantial raising of salaries throughout the tertiary and health sectors. All out of the public purse. This suggests the already strong transfer of wealth from the many to the few is accelerating.

It may be good for Dunedin (debateable) but does little or nothing to the GDP. There is very little national wealth growth in this, but rather just more imbalance. The suggestion  that to rise to a professorship requires tremendous talent beggars belief when one considers the the fact that it is no more meritourious than the rise of captains of industry, who often put their personal fortunes and family homes on the line to get their businesses up and running., with the ever present threat of economic failure present. How many of the tertiary or health industry folk do that?

Scarier

House: the numbers above show that 2/3 of the people earning over $100k in Dunedin are not working for the Uni or the DHB.

Scarier though is that 3072 out of 120k people is about 2.5% in Dunedin earning over $100k while according to the 2103 census data 5% of NZers earn $100k or more - our best and brightest are leaving - but we knew that already - we need to do more to encourage the growth of new dynamic businesses rather than the old guard Mr Christie represents.

False logic

This is the problem in our current thinking. Instead of lauding the high wages of a few we should be working to lift the wages of the many. People on lower and medium incomes have more needs outstanding than the rich who already have replaced and provided for their needs ongoingly. Give better wages to the lower wage earners and they will keep feeding it back into the economy. The rich will go spend it overseas because they can.

Do the math. Increase 20,000 a year incomes to $50,000 for 100000 and they will spend that increase immediately to bring their standard of living up to average. That comes to $3000,000,000 into the local economy. The trickle-down effect is an idealogical furfee designed to fool us into believing the neoliberal agenda of disparity.

The real story

'The top earner got between $510,000 and $520,000, more than $120,000 less than the previous year's top pay.'

So that's 12 extra $10,000 raises for the council to create if it is going to remain true to its promise of 10,000 extra jobs and 10,000 more dollars per job.

The trouble with high earners is their insistence on spending all that extra on property, thus raising the price for ordinary mortals, so all in all it just makes it harder for the working poor.

Government salaries in Dunedin

Something the people of Dunedin should consider is how beholden the City is to government money.

While it is good to have high incomes in the City, the fact that they are government funded could be an issue should the government decide not to increase funding in the areas that these people work. Quite a risk for Dunedin to have a lot of employees all in the same area.

Having a high proportion of government employees in the City could also dictate the voting patterns with parties and candidates that reflect high government spending being consistently voted in, regardless of if their actual policies are any good.

Hopefully Dunedin gets more private enterprise high earners (actually any earners) and their companies to pay the taxes required to fund the government workforce.

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