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Grant Robertson denies freezing public sector pay is a contractionary policy; Government can't estimate how much the freeze will save

Grant Robertson denies freezing public sector pay is a contractionary policy; Government can't estimate how much the freeze will save

Finance Minister Grant Robertson is denying claims the Government’s decision to freeze most public servants’ pay for the next three years reflects an austere or contractionary approach to managing the economy.

Robertson and Minister for the Public Service Chris Hipkins on Wednesday announced the freeze would apply to all public servants who earn more than $60,000 a year. Some exceptions might be made for people who earn between $60,000 and $100,000.

Asked by interest.co.nz why he was advancing an economically “contractionary” policy at a time the common view is that fiscal stimulus is required, Robertson said he didn’t “accept that”.

Asked by Green Party MP Jan Logie why he was “happy to grow the economy through astronomical levels of housing debt but not through higher wages for our teachers, our nurses, and our core public servants?” Robertson said, “I reject the premise of the question”.

He argued the policy would reduce inequality, because pay increases would be confined to the 25% of those in the public sector who earn less than $60,000 a year.

Robertson stressed the May 20 Budget would be a “recovery budget”.

“It’s one where we will invest in the future of New Zealand. But we also have an obligation to make sure that we begin to reduce the debt we’ve taken on,” he said.

“We will not be cutting departmental funding. That is austerity.”

Robertson recognised the economy is performing better than expected.

For example, the financial statements for the nine months to March 31 show core Crown tax revenue coming in 6% (or $4.0 billion) higher than forecast in December.

Treasury reported a deficit of $4.3 billion - a significant improvement from the $9.4 billion deficit forecast in December.

Meanwhile net core Crown debt as a percentage of GDP came in at 33.3%. This percentage is expected to increase.

As interest.co.nz reported earlier in the week, the Government is borrowing at a faster rate than it’s spending. As at March, it had $42 billion of cash sitting in its Crown Settlement Account with the Reserve Bank.

Yet Robertson said: "We still are going to be having large-scale debt increases and deficits for years to come. So, we’ve got to be careful with our finances.”

Interest.co.nz has been unable to ascertain from Robertson’s office, The Treasury and the Public Service Commission how much the pay freeze is expected to save.

Public Service Commissioner Peter Hughes said: “We can’t calculate savings because we can’t predict the outcome of future bargaining settlements.

“But each 1% increase in the total Crown wage bill (excluding SOEs) increases costs cumulatively by $250 million per annum, with the largest sectors being health ($80 million) and education ($54 million).

“We don’t expect to see zero growth in salaries across public service. Pay restraint is about managing total growth. I would expect that the overall average pay for public servants will continue to lift.”

Coming back to Logie, she asked Robertson: “Has he considered the risk that public servants might start moving around agencies, becoming contractors, or leaving the country to try to get a pay rise to keep up with the rising cost of living, and that that might undermine the Government's work programme?”

Robertson responded by noting there have been significant pay increases across the public sector.

Indeed, the Public Service Commission said the average base salary in the public service increased by 3.9% in 2020.

National also opposed the freeze.

Its spokesperson for Public Service Mark Mitchell said: “If Labour wants to reduce costs it only has to look at itself.

“Salaries for Wellington bureaucrats have increased by $1.3 billion in just three years of a Labour Government. That’s $300 million more than they increased under National over almost a decade.

“Labour bringing in a salary freeze now is like closing the barn door after the horse has bolted.”

ACT didn’t oppose the freeze, but like National, blamed the Government for allowing the public sector to become “bloated”.

“What we need now is an assurance from Labour that it won’t hire expensive consultants to avoid a head count of full-time staff,” ACT leader David Seymour said.

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133 Comments

refute means to disprove. he might reject it..

Indeed.

I find the politics of this baffling. Is this a late April fool's joke or something? As far as I can tell it's very unpopular, and the only people who like this are the people who normally have a knee-jerk opposition to anything Labour does.

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He’s implementing these pay freezes and giving those much vaunted ‘shovel ready’ projects the chop and I think I know why. There is going to be a huge increase in the welfare state due the weeping inequality sore inflicted by the housing debacle. So it’ll be sold to us as prudent belt tightening over here, while unveiling a multi-billion dollar welfare roll-out over here: hey presto “we’ve achieved a balance”.

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Walking through central Auckland these days is really depressing. The homeless numbers seem to be getting bigger, and they seem to be getting more aggro. Saw a dude pissing on Queen Street today in broad daylight. FFS.

Rather than whingeing about Queen Street business owners should be whinging about the homeless issue, that's a far bigger issue to their business.

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Queen Street looks like downtown Mogadishu these days anyway. The ‘rail loop’ has stuffed a large section of it, $4.5 Billion and counting for a 3.5 km long project, there is a guy sitting there on a digger moving gravel from one pile to another and back again. Then you have the council coning off large areas as part of an ideological experiment. No wonder businesses there have had a gutsful.

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I walk through Queen Street every day. I personally think the homeless issue is a much bigger problem than the road coning off etc. I am quite a big guy but I feel a bit unsafe at times and it's simply unpleasant.

They need to be moved on to institutions that can support them. Most of the "homeless" are drunk or have mental health issues (or both). This is a result of dumping people with mental health issues into the community.

Exactly. Surely agencies should be intervening?

A lot of them have mental health issues - agreed. If you look closely, you'll see that a surprising number of these mentally ill street urchins are cigarette smokers. For whatever reason they don’t seem to be able to control themselves despite the horrific cost of the product. If you stand outside La Fourchette in St Heliers, and look around you'll see that pretty much nobody in this affluent area is smoking. Conversely, go to the mean streets of old Papatoetoe village and you'll see dozens of people smoking or picking up cigarette buts from the gutters. The government is taking 2 billion dollars from the poorest of the poor. What do you think that does to society?

When I did my mental health nursing practical training, I worked for a spell in a drug/alcohol 'halfway house' (court-ordered residential rehab). Loose tobacco and rolling papers were provided free as (then) it was thought tobacco smoking aided people trying to kick other, more harmful drug addictions.

I walk Queen Street every day and 1) it's actually pretty decent with lots of walking space, large oak trees etc. and 2) you have clearly never lived in a developing country and experienced streets in such places.

I agree on the physical aspects of the street. There's actually many nice old buildings, nice trees and wide pavements. I don't *get* why people hate the 'physical' side of Queen Street - notwithstanding the crap, albeit temporary, coning and colours.
But you don't think the homelessness matter is getting out of control?

Absolutely the homeless matter is getting pretty crazy. It has mushroomed over the last ten years. But unfortunately keeping housing costs high is the priority, and because only working folk are allowed to be taxed we can't afford to spend that much on mental health.

You definitely get to know which ones have been around for a long time sleeping in the area. They are some of the eggs we break to make the omelette of our wonderful prosperity from transferring wealth to assets and away from people.

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Oh yeah, what's happened to all those 'shovel ready projects'? Another massive failure

The Council's they've partnered with to deliver these have capacity constraints because the people they need to do these can get paid more in the private sector. Expect to see more of this with the short sighted announcement from Grant Robertson. There is a lack of experienced and qualified people to get things done. Knee capping the public sector isn't going to result in productivity gains, and will likely see the government pay out more to consultants, as was evident when National gutted the public service during their last term.

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happy to grow the economy through astronomical levels of housing debt but not through higher wages for our teachers, our nurses, and our core public servants?” Robertson said, “I reject the premise of the question”.

Why reject the premise? That's exactly what's happening.

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The premise is:
1. It is happening, and
2. He is happy about it

He may have rejected the premise due to #2.

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Reducing inequality by compressing the salary .....wow.......what about housing ponzi Mr Robertson ......

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Devalue purchasing power of NZ$ by flooding the country with it. Cap wages to further depress purchasing power. Haha. What?? What's the thinking?

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Some are saying that their real wages are going backwards because inflation is running at "2%". Imagine if they knew what the real rate of inflation was. Probably running at closer to 10+%.

If people knew that, you'd probably see huge flight into tangibles like real estate. Oh.

He prefers stagflation to hyperinflation.

But NOT in the property market.

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Is there really any savings? For a start they get 33% of any pay rise back, and then if the private sector raises wages to match they get 33% of that too. I’d say they may actually end up worse off by a pay freeze.

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“What we need now is an assurance from Labour that it won’t hire expensive consultants to avoid a head count of full-time staff,” ACT leader David Seymour said.

Yeah right. This whole exercise is more smoke and mirrors from Labour getting the nz public to point fingers at each other whist avoiding the key issues. Seymour hasn't missed a trick - they'll increase capex budgets paying for expensive contractors and keep the opex staff level for reporting purposes. The smell of BS is palpable.

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they'll increase capex budgets paying for expensive contractors and keep the opex staff level for reporting purposes.

For sure. I would love to see them disclose all the consulting and contractor payments.

Good 'catch' by Mr Seymour.

if David seymour switched to blue -- they would be electable overnight!

Nah disagree. I like Seymour but I don't think he's leader of a major party material

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Clown world! Have fun in ER next time you need to go, or have to call the cops to an incident - there are going to be some disgruntled public servants, and strikes - that's the ones that don't leave for Australia. What Labour is doing is putting public safety at risk

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The pay gap between unqualified health care workers and experienced Registered Nurses, many of whom regularly hold your life in your hands, was already so far out of whack many are chucking it in. This govt is acting in a way that that considers study, experience, qualifications, hard work and highly skilled attributes just don't matter.

Correct, of the 7 nurses I know only one has remained in the public sector (and she has transferred to the army). The rest are now creaming it in the private sector...

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Robbo saying that the government is choosing to focus on inequality and pay rises for those earning under $60,000 is the first step. The next steps will no doubt be in the budget: a huge expansion of the welfare state.

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No way will Labour get in again after this. They're dead meat

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Lots of Public Sector Workers aghast at the rationing of the government teat.

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Its called being renumerated for hard work. Something property investors don't know much about

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yeah. The hypocrisy. The ending of interest only loans would give those hard working highly deserving landlords a pay cut....instead we cut the workers pay. So much for labour being the working mans govt!

The two parties seem to have become Natbour and younger Kiwis will need to look to Greens, TOP, ACT etc. for actual alternatives.

Zack Brando,

What a disgusting statement. What you are saying is that nurses, to take just one example, are "sucking at the government teat". Just wait till you need one and let them know that you think they are parasites.

Just because nurses are on state payroll does not mean that there are not plenty of paper-shuffling parasites' on it . "Think about the nurses" is just the left's favorite deflection.

100% for the nurses. :)

Sure Zack ...and as a PI you're not sucking on the government teat ! ......OK picture this scenario - your tenants salary can't keep up with your rents, so they reduce their overall spending in the marketplace, so businesses don't do as well and their costs are rising anyway.....Said tenant forced to go to get an accommodation supplement (tax payer $) while the Government is forced to widen it WFF packages (more tax payer $) .....overall standards of living reduce and more financial stress.

To start with, my solution right now, is to get the Government right out of the residential rental market completely, starting with NO accommodation supplement at all......then rents will find their "true market" value......and not just "subsidised" by the tax payer, for landlords to pay the banks.

As an ex-property manager, the biggest problem I ever had wasn't the tenants themselves, but getting the landlords to put their hands in their pockets !

Sounds reasonable to me and I'm a renter. Knock working for families on the head too.. excessive interest only lending, the RMA and if the government is building homes they should be for purchase, NOT for the dispossession of NZ citizens via "social housing" [the state owing an ever increasing share of NZ housing stock].

Rates need to increase dramatically too, especially if stake-holders keep electing their municipalities to be wasteful/visionless.

BUT they are doing huge damage to the Country now. Time for a COUP Fiji Style

Dago - Such policy I hope as you do that they will piss enough people off that they will not get re-elected. I t just seems bizarre to me that the very people nurses, teachers etc that are the very people that we need to improve outcomes are being punished.
For 4 years they have been punishing farmers and landlords now public servants it just does not make any sense to me ??
Are they true socialists and want to destroy everything so we all are broke but equal is that equlaty ??????????????

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Supply and Demand would tell us Labour believe there is an over supply of public sector workers.

That is I think something of an understatement. Trouble is there is still some, a minority undoubtedly, that are both diligent and productive. Lost in the swamp most of them though. Within that, in the same vein, there needs to be a hard and penetrating look at the disparity in earnings between that of the shiny arses in the corridors of power, and those plying at the coal face.

Some employees [extends to Management and Key Appointments] just aren't a good fit. Add a government guaranteed paycheck and I image employers need human sized shoehorns.

Unfortunately one of the most desirable assets for obtaining those top level government jobs is being an expert in back-stabbery and connivance. Rare qualifications as most people aren't complete a-holes.

Where is your evidence that they are getting paid more than their counterparts in the private sector? This sort of rhetoric is unhelpful.

Some areas that is true. No so true where it matters. Health.

There's more - Transpower, EA, NZTA, DIA's civil projects team and Kiwirail. These agencies hire engineering and infrastructure specialists that are very much in short-supply, and are tasked with keeping our lights on and the country moving.

If we lose even a small percentage of these to Aussie, it could cost us a lot more than in lost productivity and poor outcomes.

Competent people in any government organisation (whether it is the Ministry of Primary Industries or the Treasury) will find their skills and knowledge is valued by the private sector (specially for those who need to comply with regulations set by such organsisiton, or are their suppliers/contractors).

Agreed, but if this was the case, I would have thought that the Govt would have instituted a hiring freeze and/or some sort of encouragement for early retirement. I 'don't get it' as a lot of Govt employees in Wgtn are paying very high rents or high mortgage payments compared to the rest of NZ and I have to wonder what will keep them in these positions. Surely any Govt employee with any 'get up and go' would be gone (to OZ or to the private sector)?

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Is GR on crack or something? 3 years of pay freezes seems a bit OTT especially if we do get some inflation. Asset holders getting a right royal payout while workers getting shafted: might need to change their parties’ name!

Moore of the story is that to earn money- speculate in housing as come what may @#$ Orr and #$@% Robertson will do everything to support and promote the ponzi and swear by God that will never do anything that may harm speculators interest like interest only loan or DTI.

Yeah it's very aggressive.

Would have been more sensible to say something like, 1 year pay freeze for everyone over $120k, and maximum 1.5% pay rise for everyone over $200k for 2 subsequent years.

This only makes sense if there is going to be a huge child poverty reduction announcement in the budget, which *might* require accompanying measures to offset the resulting increase in aggregate demand. We can but hope.

So interest rates will start going up?

A bizarre move, this one. When Winston Peters was Treasurer, I was a Vote manager. Every Vote was required to find 1% savings per annum on operational expenditure, unless you submitted a 'special case' for a Vote increase - and it was made clear that salary reviews/rises were not considered a 'special case'. Therefore, if you wanted to give salary rises, you had to find them through savings in other areas of operational expenditure.

Freezing salaries (effectively 'banning' pay rises for most of those above $60,000pa and all of those above $100,000pa) is a disincentive in terms of rewarding and retaining the really good, productive people. Hence, the mediocre stick around, and the go getters leave.

Perhaps the idea is to place greater power in the hands of the union movements?

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Interesting. Do you think the pre-budget announcement suggests an attempt to soften up the centre-right base ahead of a major welfare increase - or maybe the return of free higher education / apprenticeships (build back smarter etc)? I guess we will find out in two weeks.

No two ways about it, that is what is going to happen, mark my words. The housing Ponzi / fiasco is the gift that keeps on giving for socialists, Robbo will be throwing a bridge of taxpayer money accross the ‘inequality gap’. We are rue Ted as a country.

Two questions.

1. On what planet is a housing ponzi a gift for socialists (who by definition believe in the equitable distribution of wealth)?
2. When financial assets collect in ever greater concentration with fewer people (inequality) - should the Govt not take redistributive action?

I will answer your questions by saying that the housing Ponzi offers the justifuication for the sort of fundamental changes that this 'transformational' government would want to make but their overriding desire to keep winning elections would ordinarily prevent them from making. Thus the existence of the Ponzi - which may fall over in 1, 2, or 5 years - is the curent 'gift' that allows for an increase in the welfare state that will be 'set in stone'.
Secondly, you talk of 'redistribution' by the state, a term I find repugnant. But no 'redistribution' will be happening here. There will not be redistribution of wealth from the hands of those making out like bandits in the property Ponzi to those who are on poor street. The would-be redistribution will be an increase in the welfare state off the back of increased borrowing by the nation. Put bluntly, it will be an permanent and unaffordable expansion that will be nothing more than theft from future generations.

Worth looking up the seminal work of Ruml in 1946 (google: taxes for revenue are obsolete). He is still right about the primary purpose of taxes...

1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;
2. To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;
3. To express public policy in subsidizing or in penalizing various industries and economic groups;
4. To isolate and assess directly the costs of certain national benefits, such as highways and social security.

The answer to the housing ponzi is in the above.

I tend to agree with you Tom V. From my standpoint (a retiree with no 'investment property', the winners are the speculators, realtors and banks. The middle (working class), young workers saving for their first homes, as well as retirees with TDs trying to earn interest to supplement their retirements - go to the bottom of the heap. I'm starting to think that Labour are now pushing their socialist agenda - the housing market keeps the economy 'ticking over' while the rest of us (simply trying to save and make a living) are going to pay for increases to benefits.

Jfoe - I don't see how they can avoid significant increases to benefit rates - they will need to act on the recommendations of the WEAG - the evidence is overwhelming and we'll never address child poverty, in particular without that action.

But that still doesn't provide an excuse for this type of dumb policy action. MANY of the public servants are the centre and the centre-right in NZ. They will definitely erode their own base in taking this action.

And if they do this and DON'T provide those major benefit increases - then they really are losing the plot.

I wonder whether they know something we don't know about global finance markets? They parted ways with their earlier 'budget responsibility rules' and now they seem to be concerned again about debt/debt repayment.

PS - had another thought - perhaps they are doing a public-sector wage freeze in advance of a private-sector rent freeze? The whole 'team of 5 million' is expected to "take on some of the pain"?

Increasing benefits will NOT do anything towards child poverty Kate. They will just be absorbed by rents. The government doesn't have to increase benefits. All they need to do is put in a package of laws around rental (social) housing that includes rent controls at a decently low level. Currently this is the biggest contributor to child poverty. More money in the hands of parents won't necessarily improve a child's lot.

Have to agree. Benefit rates are already encouraging solo others to have multiple children. The benefit payments for these people well into above average income levels. Then we have unskilled jobs to fill - but we cant because employers cannot compete with benefit rates. Increasing benefits is just can kicking and will just make it worse.

Agree murray that the bulk of social assistance gets absorbed by rents. Certainly agree on the need for rent controls but they'll need to address private rentals. The state just can't build social housing quickly enough to keep up with the increased demand as rents spiral upwards in line with house prices.

Additionally, we need to keep in mind that many of our unemployed and under-employed do not have children - it is these core benefits that need to be raised substantially, including of course disability benefits.

Yes, these benefit increases will be sold as 'well-being' and 'reducing inequality', when really the money will go straight back out the door on rent. This is 'redistribution' alright: redistribution from taxpayers & future generations into the pockets of landlords and ultimately Aussie banks.

I agree that rents are currently limited by what people can actually afford to pay. Hence, increased benefits, which are absolutely necessary, need to be accompanied by measures to prevent rent increases. There are a number of ways of doing this - capping rent increases at CPI would be my preferred option.

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Well Grant has made it pretty clear he doesn't care about nursing recruitment and retention.
From direct experience I can tell you it is a huge issue everywhere in NZ. The elderly* might be getting great housing capital gains but increasingly it will come at the cost of dysfunctional health care when they need it.
* the elderly as a group - the exceptions (which are growing in number) - are doing it hard too.

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... I am confident , Robbo will release the freeze & grant very big Public Service salary hikes about 6 months before the 2023 election ....

We are witnessing history repeating itself , as Arderns government head down the Muldoon path of big government , grandiose ideas , the " we know best " syndrome ... Robbo the wrecker , is unbalancing & destroying our economy ....

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The solution is quite simple. Key workers in healthcare and education need to be paid more but numbers of bureaucrats need to be slashed, by at least 30%.
It's just typical Labour. Protect and empower themselves with an army of woke paper pushers, do jack about the people they should really be looking after

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Only got themselves to blame for their obscene hiring frenzy between 2017-2020. Seriously, some of those government departments are ridiculously bloated with advisors.

Wellington is full of young people fresh from Uni -- with public Policy or Local government degrees- but no real life experience mostly on 80K or more -- writing policy, designing new services ( making pretty pictures and flow charts) and trying to tell people with 30+ years experience running these services how to do it! Got significantly worse in the last three years, and its hardly surprising none of the ideas - Kiwi Build, Light rail, shovel ready etc have been implemented -- as none of these people have ever done a real days work in their lives - fish and chips anyone

The Government's view on a wage freeze in those groups is understandable. BUT what about the nurses, Corrections staff, teachers, Ambos, and fire fighters? All of these groups worked through COVID, all except teachers deal with significant risk in their day to day business, and much of that increased during COVID. At the end of it all the only acknowledgement is a cost of living pay raise of about 1.5%. But recent increases in charges and cost have absorbed that and more. And the Government's actions put the lie to their words.

The kind of people you are talking about won't have too many options but to accept the pay freeze anyways because they lack 'real' skills.

What about all the engineers, scientists, nurses, doctors, IT specialists and statisticians? I can tell you there are thousands of these across the sector working in the back-end unless you think kids with policy degrees administer our health system, estimate NZ's BoP accounts, manage our electricity grid, design algorithms for tracking gambling proceeds, etc.

Yes you sum it up well. I contracted for government agencies a little bit 2 or 3 years ago, and saw much of that.
In all seriousness, they could cut the Wellington bureaucracy by 30% and they wouldn't lose a thing. Incredibly bloated. They make councils look like lean, mean machines!!!

They are making less now than when they were external contractors for the same departments, as they were under National. We had a few approach us for better paying jobs after departments were allowed to hire again and could cut down on their contractors. This is the fact most people miss.

Rob Peter to pay Paul, current government’s one and only trick.

I don’t get the impression that Grant has read much about NZ’s economic history.

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The deadwood will stay. The young, sharp, highly qualified people will depart in droves. And they will take their institutional knowledge with them. Mr 24 said to me by phone last night. I'm gone. No way I'll stay in this role for three years with no hope of a pay rise. My view, Robertson is a fool. The private sector is going to have the pick of some incredible young minds.

The private sector should have the pick of those incredible young minds! We don’t want to become like Greece.

You don't want any good people in government!?

Exactly, good young people. These are the people who live and breathe productivity and problem solving through complex IT systems. Sounds simple but a lot of people can't do this stuff. Combine these skills with 'people smarts' and these young people have a winning combination. Robertson is mad and going madder by the day.

We want some good people in government, but high salaries do not always mean you'll get good people capable of delivering - look at the current government and it's gaggle of incompetents for a prime example.

That's not what you said. You said that you want the private sector to have the pick, and by implication the public sector to have the dregs. And to the extent that the public sector has good people motivate by things other than money, the current measure could hardly be better designed to push them out.

Indeed that is exactly what will happen. It's why I got out when they said no chance of pay rise under National.

Don't worry though, a few years later I came back as a contractor earning double the amount and advising all the people who were formerly above me. Why? Because they hadn't moved with the times and didn't understand how to. The few years away spent in the private sector was great!

Robertsons a total mug, right when they have money to spend in the real economy and people and projects to spend it on, which is exactly what the economy needs, he decides it's all too hard and closes the books. Why? I suspect because he knows they can't deliver so can only restrain spending.

What good young people? My observation is most of the young policy advisors in govt couldn't do anything else, would be lost in the real world.

They are welcome to come and slum it in the private sector with the rest of us - although how they might deal with no assured payrises, slashed incomes during lockdowns and only the bare minimum of four weeks annual leave is beyond me, given some of the hysterical God-complexes on display on Twitter.

I work in the public sector, and pay rises aren't 'assured': there are three ways to get a payrise in my sector: by getting promoted, by going up an increment within your current pay band (both of which you have to demonstrate to your manager you deserve) or through negotiation.
Also annual leave is four weeks, just like in the private sector.

In that case, I feel sorry for you - it sounds like not all departments are created equal. I just about had a breakdown when I found out what a friend who was at case-manager level in a government department was earning - it was a considerable amount more than what I earn now as a finance professional. Not really fair to have people on packages to equivalent private sector terms frozen on the same basis as those who are on gold-plated deals in other departments as if they're the same, nor to lump in nurses, police officers etc.

yes case manager at ACC / Dep of C - can be earning 75 - 80K -- requires no formal qualifications at all - meanwhile the health professionals in the voluntary sector with 3 or 4 years training and experience lucky to be in the 60-70K bracket -- being told how to care for their clients by unqualified individuals on 20K more -- farcical !

Farcical yes. But then why wouldn't those underpaid health professionals switch profession to become case managers for 20K more?

Maybe they apply but won't be employed because they pose a threat to their supervisors or the institution?

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... Government can't estimate how much the freeze will save ..

GR still using his Zero Accounting package.
- this is the other side of the coin of his claiming earlier in the week of not knowing where spent funds have gone.

Financial papers & records are a prerequisite, unless ones in a Bottom of the Harbour Scheme.

Pathetic, GR really has no idea...

the one trick party..chickens coming home to roost, now they have got to work out how to pay for the lolly scramble, and this is the best they can come up with, as they have no idea on increasing productivity. Now all we need is for interest rates to climb to 5-6% and the blood will start flowing.

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What a plonker. He can 'not accept' it all he likes, it doesn't change the fact. It's almost as if he's saying "It's different when we do it". Imagine the uproar if it was National in power and they did this. The unions would be out striking and Labour would be rightly criticising the move.

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Agreed. Labour are basically woke-washed Nats

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And I'm embarrassed I voted for them.

Hopefully this plays in favour of TOP. I've had it with dodgy politicians choosing vested interest over common sense!

Still not regretting my vote for TOP in 2020.

Comment of the day. I'm also ashamed that I voted for them.

Haha well put!!

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Welcome back Rob Muldoon.
Can we build a new Hydro Scheme again now you’re back? And maybe carless days to lower the use of evil fossil fuels.

To be fair, labour do need to make room in teh budget for wine and dining Amazon execs, and commissioning woke reports

I'd rather give pay rises to the public sector than "rebates" to Amazon.

Meanwhile, most kiwis are going happily about things, in a complacent fantasyland.
Did anyone else see Audrey Young's ridiculously high ratings of government ministers in the Herald recently?

We are so decoupled from basic concepts as 'ministerial accountability' and 'collective responsibility' that our bar for success and leadership is now below what would constitute a failed state at any other time in our history.

I am starting to think the real seat of executive power in this country is the paper-shuffling gendarmes. They decide what the government can do and what the rest of us do, and in the absence of competent ministers, with little oversight or accountability. They are a noose around the country's neck, and drag resources away from front-line government workers who are there for the right reasons and doing what they can with the pittance that is left over after the wonks fill their boots.

Asset owners are. Young people are not. They feel shafted.

Yup,young people are just economic cannon fodder at this point.

I basically tell young people this every day and tell them to move to Australia. It's absolutely pointless being a young person in this country, there are few opportunities to really get ahead in life.

Just had a 20yo I know return from Aus where he was working in a fish and chip shop and making $25 AUD an hour plus time and a half if has to stay late and on public holidays. Comes back here and can't find work and sees sky rocketing house prices (long term he wants to buy). Won't be long before he is back across the ditch I think...

I think that working in a fish and chip shop is all the work experience you need in NZ to get into Politics. But seriously though, $25 AUD an hour over there is going to get you nowhere either. What I have noticed over the years is that immigrants into this country are more driven to succeed. Back in the day when I was at college I don't remember a single Asian in a school with over 1700 students and now you have to compete with them for jobs so you need to be smarter and work harder than I did in the day for those top paying jobs.

Not sure about that, he was living well in a medium sized Victorian town. Imagine if he applied himself, which he is looking to do... making more than the NZ median wage in an entry level job in Aus is pretty telling

Carlos. Our family businesses employ a good number of people. Consensus of our managers is that younger asian immigrants with reasonable english make better employees than their often entitled high maintenance millennial counterparts. Generalisation of course, we have great young kiwi born and breds but the work ethic of newer kiwis is nearly always significantly better.

When I left school at the end of the 1960s there were endless opportunities for a school leaver to find work and there was very little unemployment. We all had the expectation that we would find a job and we did so easily. Unfortunately those opportunities are no longer available, apprenticeships are now few and far between and many of the government departments that would take on new cadets have been sold off or closed down and what we have left now for school leavers is often poor quality, low paid part time work of an insecure nature.

Minimum wage increases suck out the ability to pick up staff who are surplus to requirements. Payroll now needs to be super efficient.

treadlightly. Yeah, I'm same vintage and that was may experience as well. But some govt 'employment' was essentially the dole in disguise for those on the margins of society. I agree with your point about the growing casualization of the workforce but would like to think Faafoi's review of migration settings might stem the inflow of low quality labour and along with reducing unemployment levels we see an improvement in employment conditions for lower skilled workers and young people. On apprenticeships being 'few and far between', there were just over 57,000 in NZ as at 12/20, 12,000 or 17.6% up on the previous year and that number will have grown since.

Looking at jobs in Aus I could get a 15-20% pay rise PLUS super for doing the same job. The super is a 9.5% contribution from my employer, not the piddly 3% I get here. Why do I work in NZ again? Pity about all the Aussies in Melbourne though.

Economist Prof L.Randall Wray has this to say about government borrowing,
The Government does not, indeed, cannot borrow its own currency in order to run a budget deficit. When government sells bonds it simply debits bank reserves and credits the purchaser with a treasury (essentially just reserves with higher interest); government does not obtain anything to use as a medium of exchange--it merely changes the form of its liability. Fiat currency typically does not enter the economy via ‘printing money’, rather, government spends by crediting bank accounts and taxes by debiting them. It credits banks reserves when it spends and debits bank reserves when it taxes. Banks act as intermediaries between the government and the non-government sectors.Excess reserves drive the overnight rate down; insufficient reserves drive it up. The purpose of bond sales by government (central bank and treasury) is to drain excess reserves; the purpose of bond purchases and retirements (by central bank and treasury, respectively) is to add reserves. Bond sales destroy reserves; they do not provide government with more currency to spend. Thus, bond sales and purchases are part of monetary policy—not a borrowing operation—they help the central bank to hit its interest rate target. http://www.levyinstitute.org/pubs/Wray_Understanding_Modern.pdf

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I work at CMDHB. White Island followed by C-19. Lots of back patting from Health Ministers praising us for our compassion, diligence and work ethic. Lots of personal sacrifices across the board, cleaners, orderlies, nurses and doctors. Given inflation all of that gratitude has translated into a pay cut in real terms for not one year but 3! I was canvased this morning by my union about my appetite for industrial action during our collective bargaining which is under way currently - answers on a postcard!

I can't see how this decision from the government isn't going to eventually result in rolling strikes across the public sector.

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Lets put things in perspective, Labour is borrowing $770,000,000 per week. Maori interpreters get paid 10 times more than non Maori get (One nation, yeah right) . 27 % of GDP now goes to welfare.
This government could not run a profitable lemonade stand.

Borrowing is a monetary operation and has nothing to do with financing the government in fact running budget surpluses makes us all poorer as sectoral balances illustrates the government sector and the private sector are a mirror image of each other, if one is a surplus then the other must be a deficit.

Dave. With the Ardern govts attempts to suppress the He Puapua report collapsing, the master plan to progressively dismantle NZs one nation philosophy has been laid bare. The dear leader needed a headline grabbing initiative to divert public attention from her secretive concealment of this explosive document. The hints at wedding dates which tantalise the TV2 watching cohort of voters and bore the rest of us to wracking sobs were not enough. With a commodity super cycle bearing down on us, the US roaring back with muscularity, Roberston is looking ahead to the post covid era. The (not entirely justified) label of labour as poor economic managers haunts the left. The big guy is aware that while the Clark/Cullen team is touted as having been prudent, critics point to the structural spending deficits they created for subsequent administrations to deal with and the parallel will be clear to him.

Over 50% of that welfare budget goes to people regardless of need including the very wealthy, i.e. the pension. Then we funnel billions more to property investors via the Accommodation Supplement, emergency housing payments, and Working for Families (which also subsidises wage costs).

We are well and truly reaming the working folk to hand welfare often to the quite wealthy.

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This really pisses me off:
"Hipkins told Stuff it was not possible to contact the tens of thousands of public sector workers about the announcement before making it. “The reality is there are tens of thousands of people and it is not possible to communicate with each and every one of them individually before making that announcement,” Hipkins said." (from Stuff.co.nz)

I find it astonishing that Hipkins does not appear to know that you can send an email to more than one person at once. Also I don't see what was so urgent about the announcement. Could it not have waited a few days until staff had been informed?

Useful additional stats/comparisons in this article;

https://www.stuff.co.nz/business/300301617/do-people-really-earn-more-in...

What would be the 'real' deficit if you were to take into account the capital injection of the $58b from the 2020 Covid Bailout fund? Maybe -14%?

From what I hear the nurses are white hot with anger. They have been treated like fools for so long now that they have reached the end of their tether. The first offer in their pay round was a one off $800 payment and the second a 1.something percent rise. I expect them to totally ignore any claims of a wage freeze and take the gloves off this time. God help the health system and the government. They are going to end up with egg all over their face.
The hospitals are loosing staff hand over fist. Many are taking up work in Australia by leaving NZ or fly in/out contracts. many are just leaving because they are just sick of being treated like crap.