Public sector pay rises: Union says Luxon surprised because rises are not real
The union representing public servants says the Prime Minister was right to be surprised by claims of healthy pay rises in the sector – because official figures tell a different story.
Christopher Luxon was caught off guard when he appeared on Newstalk ZB’s Mike Hosking Breakfast this morning, after being told Seek job ads showed pay in the public sector was increasing 10% year on year.
Hosking asked Luxon why that was happening, to which he replied: “I’ve got no idea, that shouldn’t be happening because we have a cap down on the FTEs in the system.”
Hosking noted an increase of 2.5% for the quarter and asked “how is this possible?”
“I don’t know, that’s not what we want to see,” Luxon said.
“We’ve laid out very clearly where we want to get the size of the public service down to,” he added.
“We’ve also laid out very clearly that we’ve got quite radical structural change coming to the public sector in the second term.”
National wanted to “simplify agencies” and “reduce duplication”, he said.
The Public Service Association (PSA) says official figures show public service pay actually rose just 1.3% in the year to June, while prices rose 4.1%.
“We’re surprised too. If public service workers had a 10% rise in the past year, they wouldn’t be going on strike,” PSA national secretary Fleur Fitzsimons said.
“Ten thousand workers from MBIE [Ministry of Business, Innovation and Employment], MSD [Ministry of Social Development], DIA [Department of Internal Affairs] and other agencies walked off the job on September 9 because the Government’s offers are well below the rate of inflation. Workers at Corrections have also rejected their pay offer. A 10% rise would more than fix that. It just isn’t real.”
Fitzsimons said Seek measures what employers advertise for new roles, not what public servants are actually paid.
“It doesn’t publish the data behind its index, so nobody can say what is driving the number. It could well be advertised jobs for senior managers and specialists.
“This data tells you nothing about the pay packets of the people who process benefits, support exporters and keep civil defence running.”
Referring to the Labour Cost Index analysis from the Public Service Commission, Fitzsimons said public service pay rose 1.3% in the year to June.
Public sector pay rose 1.7%, and private sector pay rose 2.0%, she said.
“Even Seek’s own figures show advertised pay across all jobs rising 2.6%, well short of inflation.
“Wellington, where much of the public service is based, had the weakest annual growth of any region.
“What’s telling is the Prime Minister’s first reaction: that a rise like that ‘shouldn’t be happening’. Workers going backwards on their pay deserve better than a government whose instinct is that public service pay rises are a problem,” Fitzsimons said.
“And with the PM promising ‘radical structural change’ for the public sector if elected to a second term, these workers can see what is coming: more cuts, more pressure, and pay that doesn’t keep up with the cost of living,” Fitzsimons said.
Luxon ‘all in’ on supermarket policy
Speaking about National’s plan to break up the supermarket duopoly, Luxon said he was “all in” on the plan, but if the Commerce Commission rejects the idea, “we won’t be doing it”.
He disagreed with Hosking’s claim that National – supposedly the party of enterprise and hard work – was “picking on industries you think are a bit suspect”.
“We’re also a party of competition,” he told Hosking, adding that the supermarket sector in New Zealand was “fundamentally not competitive”.
He said he could not think of another country where 82% of the market was dominated by just two grocery players.
National believed its policy would result in supermarkets competing better on price, choice, range and location but there should be a high bar to intervene and it should be taken out of politicians’ hands, he said.
That was the reason for giving the Commerce Commission the final sign-off, in the form of a six-month review after the election.
“If they say no, then we won’t be doing it … it’s such a big intervention that you should make sure that it’s reassured by the very best competition experts you’ve got.”
Luxon acknowledged coalition partner Act didn’t agree with the policy but said there was an emerging consensus across Parliament and “it may well be agree to disagree”.
Campaign ramps up
Luxon was making his media rounds this morning, as parties ramp up their campaign promises ahead of election day on November 7.
In the past week, National and Labour have competed to see who can crack down the hardest on the supermarket duopoly, both claiming their plans will lower food prices for Kiwi shoppers.
National last week announced it plans to carve off Foodstuffs’ Pak’nSave brand from its New World and Four Square brands, leaving the country with three nationwide supermarket chains. The move would first be reviewed by the Commerce Commission to see if it would bring down prices.
Labour wants to separate Foodstuffs’ and Woolworths’ wholesale and retail arms, letting smaller grocers purchase stock from any wholesaler they choose.
The grocery sector is promising to fight any restructuring plans.
At the weekend, National also announced it would ban digital screen use for kids in early childcare if re-elected and restrict young students’ screen time at school.
That policy would minimise individual device use for Years 1-3, as well as bringing in age-appropriate limits for older students. It would also require the writing component of primary students’ twice-yearly assessments to be completed on paper.
The Act Party has promised to “make farming fun again” by cutting red tape from the agriculture sector, including climate regulations.
And New Zealand First will campaign on a 15-point health plan including reviewing intravenous vitamin C and embedding nutrition in the school curriculum.
Last week investigative journalist Nicky Hager teased a new book, though the subject matter remains a mystery.
Hager has invited journalists to the book launch on Tuesday night in Wellington.
He has previously released two books on the internal workings of the National Party, The Hollow Men (2006) and Dirty Politics (2014), and his 2002 book Seeds of Distrustwent behind the scenes of Labour’s genetically modified corn scandal.