We would love to see wages drop – Key

Written By: - Date published: 2:30 pm, January 23rd, 2009 - 18 comments
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Staying with today’s wages theme, The Herald is reporting: “Mr Key would not rule out pay cuts for public servants in the next three years”.

So will Mr Key be ringing the Herald’s editor, demanding a retraction and threatening Audrey Young for writing the article? This is after all what Key did last year when the Bay Report quoted him saying “We would love to see wages drop“. Outraged, Key lambasted the Bay Report (and the Standard when we reported it), yelling he would never want to see wages go down. But it looks like we simply caught a glimpse of the real John Key.

18 comments on “We would love to see wages drop – Key”

  1. anyone for prices going down..?

  2. Whero 2

    Didn’t the Goober also say he wanted higher unemployemnt?

    John Key – Champion of the Underclass – in fact, he loves them so much, he wants more!

  3. QoT 3

    This is my surprised face.

    Why do I get the feeling that it’s not going to be the 100k+ paper-pushing report re-re-re-re-re-drafters who get it in the neck?

  4. infused 4

    Prices arn’t going down… In the IT world at least, thinks are going up up up.

  5. naughtybynature 5

    What a stupid beat-up. The article clearly quotes Key as saying this isn’t on the Government’s agenda at the present moment. More to the point, why would he rule them out in the fiscal environment the Government currently faces? Managing within the Government’s fiscal headroom was always going to be difficult after 2020 and it has got a whole a lot worse since the financial crisis.

    As a public servant I heartily agree that we shouldn’t expect large increases, as has occured over recent years, at a time when others are facing financial difficulties and inflation forecasts are dipping from where they were a year ago. Afterall we are there to serve the public interest not feather our own nests. Kudos to Key for calling for restraint in MP renumeration.

  6. burt 6


    So what would Labour have done?

    Argued that their 9% pay rise every year was OK because they were not responsible for setting it then put out a press releases requesting that pay rises are low to keep inflation in check while they spend our money like a drunken sailor in a brothel?

    Perhaps they would have put taxes up to reduce take home pay while people incapable of understanding net pay is what people spend would argue that since gross pay went up by CPI that Labour are good for low paid workers?

    Please tell us what Labour would have done, surely if you can tell us why National are so bad then you must have an alternative.

  7. Jono 7

    Burt you reactionary – pay rises in the public sector where usually about inflation, not 9% – try and get some idea about what you are talking about. the last govt might have done something – so far the current govt has done absolutely nothing

  8. burt 8


    Yes I agree, pay rises for MP’s have always been about 9% and the self serving pricks have not allowed the public service to have the same level of pay rise.

    See it was good enough for them (the MP’s) to have 9% every year but Dr’s, Teachers, Police, Nurses etc got roughly CPI. Dr’s striked because the govt would not approve 12% over 3 years – at the same time as they (the MP’s) were getting 9% every year.

    One thing is for sure, National are not having one rule for themselves and another for everybody else. How quickly we forget how self serving the Labour govt were eh.

  9. SPC 9


    MP’s pay is not assessed every year.

    Doctors asked for more than 12% over 3 years.

    And nurses received increases above the CPI.


    I wonder which public servants are to be in fear of their pay being cut.

    Has no one told John Key that cutting the pay of government workers was a failed policy practice resort response of the Depression years.

    There is a case for a freeze (or CPI cap) on higher salaries in the public service – during a programme of sector spending review (it builds up common cause with staff asked to work harder to deliver value for money/review programmes). But efficiency in the public sector is not built on diminishing wages paid to staff – and it’s a poor policy option and example when one is trying to sustain demand in the economy.

    Is the centre-piece of National’s programme – the closing of the wage gap across the Tasman gone by lunch-time?

  10. the sprout 10

    And further on the Herald’s latest, how marvellous to see Helen Clark voted, by a significant margin, “Greatest Living New Zealand” on the Herald’s online poll that closed today.

    That must be unheard of for a PM deposed only a couple of months ago to win such an accollade. I bet the Herald are regretting having ever run it now – but I doubt they’ll make much of it despite it being such a remarkable feat.

    It’ll be a nice boost to developing the ‘What have we done!?’ frame as kiwis start to realise they’ve traded a great leader for a monkey, just when great leadership is needed more than ever before.

  11. SPC 11

    It appears so – if one reads the signs from this governemnt so far

    They intend to freeze the salaries of police, military, teachers and doctors and nurses etc to afford their tax cuts or perhaps to afford new ones to the corporate sector (Oz banks get to keep more of their profits – profits subsidised and protected at taxpayer risk).

    I wonder how they will retain staff once jobs become available again in the private sector …

    The whole ethos is contrary to the pre-election idea of a growing economy delivering higher wages to workers. Its just more of the pro employer paying less to workers mantra that helped get this country into a low wage hole in the first place.

    And its inferred Weldon is hosting the Jobs Summit because of his own ideas – which apparently include Cullen Fund cash being used to develop non ownership shares in corporates (help corporates fund raise – as an alternative to direct infrastructure investment) and for the same non ownership shares being issued in state assets.

    Personally I would transfer 10% of the power company shares to the Cullen Fund over the next 5 years (to the 50% level) rather than borrow to finance the Fund while we have these deficits. But later (say 2020’s) I would sell this half ownership to Kiwi Saver funds so they remained in some form of public ownership. A non government shareholder (but still public agent) would be good for the power companies and us.

    But otherwise I would prefer to leave the Cullen Fund free to to sustain investment diversity and only invest where it chose/saw reasonable opportunity.

    If government sees a need to support fundraising by corporates – because of investor or banker reluctance, it has better options.

    The most traditional would be via incentives (deducting the CPI off non ownership dividends and interest income before assessing tax), the most radical – limiting credit to banks and lending a portion of total credit (so made available) directly to corporates at say 5-10% (clear rent profit to government/Reserve Bank). If the idea of that did not make Oz banks open their wallets to business what would … .

  12. burt 12


    I commented back here in June last year about Dr. Cullen saying public sector employees expecting big pay rises had lost touch with reality.

    The original article on Stuff is still there.

    Big state sector pay claims ‘unrealistic’

    But hey, that was before the full extent of the financial crisis was know and it was a Labour party person saying it so it was fine. Labour good – National Bad.

    Oh, and MP’s salaries are reviewed every year. Nurses have recently (in the last 3-4 years) had reasonable pay increases but are still very understaffed and attrition rates in nursing are appalling – still. Nurses are still underpaid on international standards.

  13. Zorr 13

    Nurses have recently (in the last 3-4 years) had reasonable pay increases but are still very understaffed and attrition rates in nursing are appalling – still. Nurses are still underpaid on international standards.

    So we are freezing their pay packets, why? So that the attrition rate goes even higher?

  14. burt 14


    I did find a link to the Unite website. Junior doctors deserve support from CTU – not back-stabbing

    The union has said it wants a 10 per cent average increase over three years. The DHBs said 4.25 per cent, take it or leave it. What the media hasn’t reported is that the doctors offered to accept the same percentage the DHBs offered senior doctors.

    So the Junior DR’s were denied 10% over 3 years?

    I also found this Herald link.

    Details of pay deal to senior doctors

    Senior doctors have each been offered salary increases of 13.3 per cent over three years, and an immediate $10,000 lump sum payment as a “retention” bonus.

    So I stand corrected. It was not 12% over three years it was 13.3% over three years plus a one off bonus.

  15. burt 15


    So we are freezing their pay packets, why? So that the attrition rate goes even higher?

    I agree, foolish if you ask me. We should be working toward international pay parity in such fundamentally necessary occupations. Hopefully dropping the ideology that only the state run providers can be allocated state funding will ensure that staff have other avenues of employment outside the public service. Time will tell, not sure if it will work for the Police mind you.

  16. the sprout 16

    Helen Clark voted, by a significant margin, “Greatest Living New Zealander’ on the Herald’s online poll

  17. Draco T Bastard 17

    Is the centre-piece of National’s programme – the closing of the wage gap across the Tasman gone by lunch-time?

    It was never a part of Nationals policy platform – only a part of their slogans.

  18. SPC 18


    Laila Harre did a good thing for nurses getting them some real wage increases. Personally I support continued real increases in the pay of doctors and nurses. There is no future for public services in any country, in an increasingly international market, if pay lags behind for too long.

    National’s old fashioned idea of low wage economy being somehow cost-efficient is short sighted nonsense. Its the idiocy of those who think they can fight off a major recession/depression by cutting wage costs – it seems National is taking seriously “economic” advice from ratings agencies who made a real mess of their own financial sector credit ratings. They worry about a credit ratings downgrade from the same people who could not see a mess developing in their own financial sector. Talk about National being led by the blind and the stupid.

    The first thing that needs to be done though, is to move way beyond Nationals minute 2008 policy (which while token is still more than what Labour did – Labour tiotally failed to make any move on whatsoever in debt write-offs despite repeated urging) and deliver 10% pa cuts in tertiary debt (it being written off over 10 years work in Enzed) to doctors and nurses – effectively 10 years local work resulting in free medical training. This applying to existing staff as well as current and future trainees (thus we might attract back some of those who moved to Oz).

    The second thing is focus on areas of shortage – the growing probem is the lack of and ageing profile of our GP’s – this requires central provision of locums to allow GP’s holidays (if we show concern for GP’s being able to have such support then we attract people into this vocation).

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