Hipkins on public sector pay: 'It's the opposite of austerity'

Public Service Minister Chris Hipkins (left) and Finance Minister Grant Robertson. Photo: RNZ (file)
Public Service Minister Chris Hipkins (left) and Finance Minister Grant Robertson. Photo: RNZ (file)
Public Service Minister Chris Hipkins denies the Government is engaging in bad faith bargaining with unions after its decision to restrict public sector wage increases.

Public service workers who earn more over $100,000 a year can expect no pay rise until at least 2024, under the policy announced last week.

For those earning over $60,000 it will be a freeze unless under exceptional circumstances. For the 25 percent of public sector workers earning below $60,000, it will be business as usual.

The Public Service Association will meet Prime Minister Jacinda Ardern today to hammer home its objections to the announcement.

PSA president Benedict Furguson said the union hoped the Government would "back down, change, amend" the decision.

Ardern and Deputy Prime Minister and Finance Minister Grant Robertson both fronted the media yesterday to explain the rationale behind it.

Hipkins said claims lower paid workers at the front line of the Covid-19 response would have their pay frozen were wrong.

"If you look at the front line of our workforce in managed isolation many of those are people who are right at the bottom of the pay scale - the security staff, the cleaners.

"We've been working very hard to ensure they are earning at least the living wage."

Across the board percentage-based increases disproportionately benefited the higher paid, and the pay guidance announced by the Government was aimed at tilting the balance towards those on the lowest incomes, he said.

Hipkins said it was no possible to calculate how much the pay restrictions would save, since pay negotiations still to be carried out.

Asked how pay negotiations could be considered in good faith, Hipkins said it was no different to any employer going into bargaining, and was good faith because it's being very upfront about the position from the beginning.

"There's a lot of things lost in translation - some of the coverage I've seen of it is simply factually incorrect.

"Certainly communication could have been better but I don't think the government is completely to blame for that.

"We have never used the phrase pay freeze.

"I'd completely reject the notion that this is austerity. Saying that we want the people on the lowest incomes to do disproportionately better than those on the highest incomes when it comes to spending additional money on salaries is not austerity. It's the opposite of it."

Council of Trade Unions to meet Hipkins

Richard Wagstaff. Photo: supplied
Richard Wagstaff. Photo: supplied
Council of Trade Unions president Richard Wagstaff told RNZ's Morning Report programme today: "It's certainly not helpful getting out a perception there's going to be a pay freeze across public services. There's been a strong reaction to that.

"We intend to, when we meet with minister Hipkins today, make it clear to him that they might be his expectations but they won't be ours, and we won't be intimidated by it."

Good faith bargaining was written into law, he said.

"We will be reminding him that they can have expectations and we've got our own but at the end of the day you have to bargain in good faith. You can't come with a take it or leave it attitude. And you can't have predetermined outcomes.

"It's a breach of good faith if you come to the table and say you have got expectations and you are not moving them. It's not a breach of good faith to have expectations but it is to say you are not going to bargain on them.

"Certainly going into bargaining, workers have expectations too. And when we get to the table we will work those things out but we won't be taking any type of pay freeze."

The CTU agreed with focusing on the low paid and Māori and Pacific Islander workforce as well as pay equity and parity, Wagstaff said.

"We don't disagreed, those are really important priorities."

But those earning more "don't have to accept that for them it means zero", Wagstaff said.

"Zero doesn't work anybody, particularly after the time we've been through. Public servants have gone above the call of duty. They've really buckled down. They haven't had pay movement for some time now.

"I think everybody deserves some recognition and some value by getting some pay rises. We do agree with focusing on those groups and we very much look forward to doing that. But to say to the rest - particularly $60,000 that's hardly well paid - that you can't have anything, that's not acceptable."

Wagstaff also expected the move to embolden employers in the private sector to deny workers pay rises as well.

"We know the government has got more cash than they thought. We know they have relied on the public sector to get them through this time as well and I think it really compromises the messages of 'we thank you and value you for the work you have done.

"We intend to talk to Chris Hipkins to really get to the bottom of what the message is. He is saying there is no pay freeze. Great."

The Public Service Association will also hold talks with the Prime Minister today.

National Party deputy leader Shane Reti said doctors and nurses would leave for Australia where there is higher pay.

"Senior doctors and senior nurses - most of whom are over the $100,000 bracket - they will leave," he told First Up.

"They will go at that time we need them most, when we're still ... not completely out of coronavirus and still looking to deploy a coronavirus vaccine programme."

"I think the community has expressed their view on this including the unions including organisations like the Salaried Medical Specialists. They're just pointing out one implication for bringing in a pay freeze like they did."

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