Some good news from yesterday. The Government has decided to walk back earlier comments suggesting a wage freeze for teachers and nurses.
Yesterday there was an attempt to discredit the media analysis that had been applied to the earlier announcement and a claim that what was announced was not actually a wage freeze. With the greatest of respect to my Labour whanau I don’t think this argument can be sustained.
The overwhelming impression created was that public servants earning over $60,000 would not be receiving more pay, at least over and above traditional increases already built into contracts, for instance band payments for teachers.
Chris Hipkins in Parliament basically said this. From question time on the fifth of May:
Hon CHRIS HIPKINS: … The updated guidance will continue to mean that there should be no pay increases for those earning over $100,000 and senior leaders within the Public Service. Any increases should be targeted to those lower-paid public servants, largely those earning below $60,000 a year, who account for about 25 percent of the public sector. We want those on the lower wages to be the focus of any increases in pay.
Ginny Andersen: How would the Minister respond to concerns about this pay restraint raised by the Public Service Association?
Hon CHRIS HIPKINS: This is ultimately about prioritising Government spending. I would say to the Public Service Association that we’ll continue to work closely with them on issues around gender and ethnic pay gaps, on issues of pay parity, and on issues around terms and conditions, as we have been doing over the last three years, where we’re making progress and we know more progress is required. I’d also say to them that the guidance is consistent with the decision last year by the Remuneration Authority that Ministers and MPs would not be getting any pay rises for the next three years because of COVID-19 and the decision by the Public Service Commissioner, who sets the pay of Public Service chief executives, who will also not be increasing any of their pay.
Hipkins was quoted as confirming that pay increases for those earning between $60,000 and $100,000 would only occur under exceptional circumstances. If there was confusion about the language then the media should not be blamed.
Yesterday things changed as the Government worked to reinterpret the earlier announcements following meetings with the unions. Henry Cooke at Stuff has these perceptive comments:
Senior ministers have been blaming the media for the anger from the public sector over the pay restraint announced last week, when they indicated that no public servant earning over $100,000 could expect a pay rise for the next three years, and those earning between $60,000 and $100,000 would only get them in special circumstances.
Hipkins and Prime Minister Jacinda Ardern first disputed that the pay restraint was a “freeze” because those on collective agreements with increases already built-in would still see their salary increase. It was never suggested that the Government would not honour its existing contracts.
Following the meetings with the unions both sides told media that the restraint was not in fact a “freeze” but just an opening position for collective bargaining negotiations, which would be entered into in good faith.
Council of Trade Unions President Richard Wagstaff said there was now room for cost-of-living increases in those discussions.
“It was also agreed that there is scope to discuss cost of living increases in negotiations for all union members covered by collectives, with higher increases for low paid workers and that there is no pay freeze,” Wagstaff said.
Hipkins confirmed this, but said this had always been the case.
“Cost of living increases are in scope to be discussed during negotiations, as they always were.”
This is despite Hipkins saying clearly last Wednesday that pay increases for those earning between $60,000 and $100,000 would only be considered under “special circumstances” – something Finance Minister Grant Roberston called an “exceptions regime.”
“Any pay increase over the next three years will be targeted to low-income public servants, that’s those earning less than $60,000 per year,” Hipkins said at the time.
“For those in between [$60,000 and $100,000,] pay adjustments will be considered in special circumstances, but they will need to work through the Public Service Commission.”
Hipkins was also asked directly about the cost of living going up over the three years of the policy, and responded by noting that public sector pay had outpaced private sector pay in recent years.
I am pleased to see the walk back of earlier comments. But I am wondering why the ministers involved did not realise that the announcement would be so incendiary.