The Government will this week introduce a bill which will mean stronger oversight of the pay of for Crown entity board members and chief executives.
The legislation will amend the State Sector Act and Crown Entities Act and, according to State Services Minister Chris Hipkins, will "bolster the public’s trust and confidence in Crown entities".
"This government is committed to raising pay levels for those on low and middle incomes. But there is a high level of public concern that the levels of pay for the highest paid chief executives is excessive, and in some cases Crown entity Boards have not met either the State Service Commissioner’s or Ministers’ guidance."
Hipkins says the changes will address those cases in particular by giving the remuneration system more teeth.
"The public expects accountability and transparency, and under these changes Boards of statutory Crown entities will need to obtain the State Services Commissioner’s written consent to the terms and conditions of employment for a chief executive,” he says.
The changes in the legislation will bring those affected into line with other Crown entities, such as universities and district health boards, which already require the consent of the State Services Commissioner.
The amendments include:
- Crown entity chief executive terms of appointment: The term for new appointments as chief executives will be for no more than five years, renewable.
- Setting standards of integrity and conduct for Crown entity boards: The Commissioner will be able to issue a code of conduct to the Board members of all entities within scope of his mandate, in line with international practice.
- The State Services Commissioner’s powers to carry out investigations: For more consistency in the way inquiries are conducted across government.
Hipkins does not expect the code of conduct to be “anything shocking,” but by setting one out, the Commissioner is able to deal with any transgressions more clearly.
"The State Sector Act 1988 and Crown Entities Act 2004 were ground-breaking when they were passed. It is time, however, to reconnect certain aspects of Crown Entity Act under a unifying spirit of service to the community," Hipkins says.
"The Commissioner will be able to take a more consistent and integrated approach across the sector in the areas covered by these amendments."
Hipkins says he does not envisage any Crown entity chief executives being forced to take pay cuts under this legislation, saying it is “future-focused.”
Prime Minister Jacinda Ardern says there is a disparity in pay increases between the State Sector and Crown entities.
“What we want to see is constancy, but also meeting public expectations about what’s reasonable with the level of pay increases in the economic environment we are operating in.”