Belt-tightening, as it turns out, is location-specific. It affects you if you’re in a state house. It doesn’t if you’re in the house of representatives.
David Seymour delivered a full-throated defence of his decision to grant Pharmac board chair Paula Bennett a 63% pay rise last week. “With this, the Pharmac chair will be paid half as much as a similar chair of a private company. It is important we get good people running critical organisations like Pharmac. I think we’ve struck a good balance here,” the Act leader said.
His reasoning lined up with previous government justifications for granting massive pay rises to Crown board members. “The old fees were well below the current lower bound, making it challenging to attract quality candidates,” said local government minister Simon Watts in November, after agreeing to a 67% pay rise for the Water Services Authority chair. Social development minister Louise Upston pointed to a long pause on pay rises to justify raising salaries by 78% for New Zealand Artificial Limb Service board members, and 80% for its chair.
Though it’s true Crown board pay hasn’t kept pace with the private sector, these politicians’ concern for the financial status of governance professionals would probably go over a little bit better if it didn’t stand in such stark contrast to the comparative lack of shits they’ve given for the salaries of those in lower income brackets. “Fewer departments, fewer bureaucrats, and the public service sucking up less taxpayer money is just what the doctor ordered,” said Seymour, as the government announced thousands of public sector layoffs ahead of this year’s Budget.
Upston was similarly firm on the case for sacrifice and restraint while defending a recent rule change making it more difficult for struggling homeowners to receive an accommodation supplement. Raising the threshold for accessing support helped the government achieve “fiscal sustainability” by “better targeting financial assistance to those most in need,” she said. Prime minister Christopher Luxon echoed that, framing the array of public service job losses and support cuts for lower income families in his government’s Budget as necessary “fiscal repair”.
The overarching message has been that times are tough and the government needs to tighten its belt. But belt-tightening, as it turns out, is for poorer people and public servants. It’s not for the esteemed and often politically-connected candidates they want to install in plum roles on Crown boards.
Neither is it for the politicians themselves. After announcing a clampdown on other people’s accommodation supplements for reasons of fiscal rectitude, Upston was confronted by reporters about her decision to claim a $1,000 weekly accommodation supplement to live in her own mortgage-free Wellington apartment. “I’m comfortable that I’m approaching it no differently than other MPs and other ministers in this parliament and in previous parliaments,” she told RNZ.
It’s true Upston is well within the rules. The question is whether those rules should change in line with the government’s professed commitment to careful stewardship of the public purse. On that, her boss has demurred, insisting MPs shouldn’t set their own pay and conditions. “Our terms and conditions and remuneration are set by an independent remuneration authority,” said Luxon in response to questions on Upston’s support claims. “That’s the right way to do it. It should be at arm’s length. You don’t want politicians involved in their terms and conditions.”
Though the independent remuneration authority says it doesn’t set the rules for MPs’ housing allowances, there’s merit in the idea that a disinterested party should set fair pay and conditions for workers. That’s likely why two recent pieces of legislation proposed installing independent adjudicators to rule on pay. Fair pay agreement legislation would have allowed the Employment Relations Authority (ERA) to decide on wages if negotiations between employers and workers broke down. Pay equity legislation also allowed historically underpaid workers in female-dominated fields to appeal their wage settings to the ERA and the employment court if they couldn’t come to an agreement. The government scrapped the former and gutted the latter.
The workers who might have benefitted from those bits of legislation would likely look jealously upon our politicians’ relatively charitable attitude to board members like Bennett. Their justification for giving her a raise – that her pay hasn’t kept pace with comparative roles – might seem eerily similar to the case underpinning the pay claims that were scrapped by those same politicians for being too generous. The people facing reduced targeted hardship payments may be similarly tempted by the notion that their incomes haven’t kept pace, as they stand in line at the supermarket waiting to exchange some of their internal organs for a 500g pack of mince.
As the government has repeatedly claimed, times are tight. Sacrifices will need to be made if we’re going to get the books into surplus by 2028/29 without instituting new taxes. But the people who’ve been ordered to make those sacrifices may be tempted to ask why the people ordering them aren’t joining them on the altar. Fiscal restraint, as it turns out, is location specific. It affects you if you’re in a state house. It doesn’t if you’re in the house of representatives.
