NZ public servants hit with wage freeze

·2-min read

New Zealand's public sector and police unions say they've been betrayed by Jacinda Ardern's government after an austere pay offer.

On Wednesday, Finance Minister Grant Robertson announced a wage freeze for public servants earning more than NZ$100,000 ($A92,730) until June 2023.

The restraint will extend to workers earning more than $NZ60,000 ($A55,640) in all but exceptional circumstances.

The wage freezes are effectively a pay cut in real terms, given increases to the cost of living.

Mr Robertson said the decision was due to mounting debt in the wake of COVID-19.

"Just as businesses are making decisions as they plan for the recovery, our responsible economic approach means the government is faced with choices about where new spending is targeted," he said.

Public Services Minister Chris Hipkins said he wanted to see "those on lower wages be the focus of any increases in pay".

"This is about prioritising spending. The policy will also help protect jobs by taking financial pressure off the public wage bill," he said.

Last year, Ms Ardern and her ministers took a 20 per cent pay cut for six months to show solidarity with workers during the pandemic.

The Remuneration Authority has already ruled that MPs and Ministers will also have their wages frozen for three years.

Police Association chief Chris Cahill said the announcement came at the very moment his organisation sat down to begin negotiations on the 2021 payround.

"It ignores the reality of the current economic times that loyal Kiwi workers are facing ... record house prices and out-of-control rents," he said.

"Never before has our frontline faced so many competing challenges which should be acknowledged in a fair and balanced increase in their pay."

The Public Service Association said the government was attacking the very people that helped implement New Zealand's world-beating response to COVID-19.

"New Zealanders trust our public servants more than ever before and with good reason. They are the least corrupt and most resilient government workforce on the planet," said PSA national secretary Kerry Davies.

"In our hospitals, in testing labs and on our borders, PSA members did the hard work required to push COVID-19 out of this country.

"It is unacceptable that after twelve months of pay restriction these workers are told to swallow it for another two years."

Government partners the Greens also called the wage restrictions "unacceptable".

"The cost of living is not freezing, and neither should wages," spokeswoman Jan Logie said.