I’m not sure what game the Government is playing right now in its attitude towards Public Servants and their pay. Remember the talk of “a team of 5 million” during Covid 19 last year. Well, it was only possible to make a great fist of this incredible challenge because of the nurses, Doctors, health professionals at the sharp end and for teachers at the family end for us to succeed. And for the Police who monitored it all. Now the Government has said to them all “thanks for that. Forget about a pay increase for 3 years”.
Unless there’s something big in the budget which is to be announced this week, I can’t figure the Government out. If it were the National Party or ACT this call would be absolutely understandable. But a Labour Government?
Here’s what David Farrar, of Kiwiblog the right-wing commentator wrote, after he had awarded Grant Robertson and Chris Hipkins honorary status in the Taxpayers Union:
Now while I am fully supportive of their fiscal rectitude in this area, I will concede the tool they have used is a blunt one. Freezing all salaries over $60,000 is rather Muldoonish. It also may be somewhat ineffectual as it may just lead to more job swapping, consultants etc. A better way of achieving fiscal rectitude would be freezing the overall staffing (and consultants) budget for each agency and leave it to each CEO how they manage within that. Some might freeze salaries. Others might reduce staff numbers and give remaining staff an increase etc. One size fits all solutions are rarely the best option.
But once again kudos to Robbo and Chippie for doing what not even a National government would dare to do, telling public sector unions there will be no pay increases (for staff over $60,000) for three years.
When was the last time Labour politicians were applauded by the right for budget decisions? Wasn’t it during the 1984-1987 Government which led us down the dreadful neo-liberal path which has created havoc in our society?
In Spinoff Bernard Hickey said:
But Robertson pivoted repeatedly in his speech and in yesterday’s announcement of a pay freeze for most public servants to the need to “restock the savings account just in case there is a rainy day”.
“As a small economy subject to external shocks, it is sensible that we look to reduce our public debt as the economy returns to full health,” he said in the pre-budget speech.
“As the recovery gets under way, we are keeping a close watch on the debt taken on during Covid-19 to support the economy,” he said in announcing public servants earning over $100,000 a year would not be paid extra for another three years and any increases for those earning $60,000 to $100,000 would be exceptional. Only those earning less than $60,000, which is just 25% of public sector workers, would receive pay increases.
“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
Bernard Hickey produces an excellent podcast most weeks. This week he has interviewed two people about the Government decision. It is an excellent interview and I recommend that you listen to it as supplied by Spinoff (which I recommend you support financially). Here it is: https://thespinoff.co.nz/podcast-series/when-the-facts-change/.
Spinoff invited public servants (who cannot speak out publicly about Government decisions) to write to them and give them their feelings on the wage freeze. Here is one from a nurse. I’ve lived with a nurse for most of my life and I know what they put into their very important jobs. Here’s what this nurse wrote:
I work as a registered nurse on a crisis team providing emergency psychiatric assessment in [redacted North Island region] – a very deprived area where unemployment, crime rate and drug and alcohol problems and the incidence of mental illness and addiction is very high. Myself and my team mates work very hard, we work long hours, we always work overtime every week in order to continue to provide a service to the public. We are a small team with four vacancies. It is very difficult to recruit to mental health because of the dearth of experienced mental health nurses in this country.
“I am outraged that the government sees fit to freeze our wages for the next three years, meaning that the cost of living will continue to rise and we will have less money to meet these costs. This removes any incentive for nurses to continue on a clinical career pathway, where the time and effort to complete post graduate qualifications will not be adequately rewarded.”
There are many others saying much the same thing. One person wrote that at least public servants have job stability, but that’s easy to remove by restructuring. Here’s the article: https://thespinoff.co.nz/the-bulletin/06-05-2021/furious-feedback-bulletin-readers-respond-to-public-sector-wage-freeze/.
In an article published on Saturday by the Democracy Project which operates out of Victoria University, Branko Marcetic, wrote this:
Several high-ranking figures from the OECD are now calling the spending cuts and debt paydowns their organisation pushed governments to do after the 2008 global financial crisis a terrible error. “The first lesson is to make sure governments are not tightening in the one to two years following the trough of GDP,” says its chief economist, pointing to the “mistake” made through 2010-11. “Austerity is not the answer today, both because of the bad experiences from the last crisis and because today we are in a zero-interest rate environment,” says its deputy secretary general.
So as the rest of the world rethinks the policy mistakes of the last decade and urges a bold change in direction, what is our nominally social democratic government up to? Doubling down on those very same mistakes, it seems.
The government’s three-year pay freeze for public sector workers announced on Tuesday is rightly being assailed across the board as a betrayal of the frontline workers who have worked themselves to the bone and risked their own health to keep New Zealand moving through a tough year. Worse, it was prefaced with a statement from Finance Minister Grant Robertson thanking “the public service for their contribution during Covid-19” and acknowledging “the efforts of our frontline staff” and their “dedication and public service” through the crisis. It would be hard to engineer a bigger slap in the face to frontline workers if you tried.
Needless to say, the move is only going to put a further squeeze on working New Zealanders already grappling with sky-high living costs that are getting worse, from fruit and vegetables to, especially, housing, which has been experiencing runaway inflation compared to incomes. As Paul Kelland points out, you can freeze incomes, but living costs are going to keep going up, effectively turning this pay freeze into a pay cut. It not only threatens to push overseas already strained nurses and teachers that our country has struggled to retain— the very same workers who struck just three years ago over, among other things, inadequate pay — but also to prod the most experienced and therefore highest paid public sector workers potentially into the private sector.
Unfortunately, by now we’ve come to expect that these concerns aren’t at the top of this government’s priorities. From refusing to lift benefits to blaming low-wage workers for its own missteps on the pandemic, this government has consistently exhibited an antipathy to what in theory should be its core voter base.
But with this latest pivot to austerity, Labour isn’t just defying its most loyal constituents — it’s rejecting the pragmatic advice of much of the global power establishment it aspires to emulate.
Here’s the link to the article: https://democracyproject.nz/2021/05/07/branko-marcetic-labours-public-sector-pay-freeze-isnt-just-a-betrayal-of-frontline-workers-its-a-rejection–of-mainstream-economic-thinking/.
I will reserve my final thoughts on what seems a strange decision until after I have listened to the reading of the Government budget this week. Unless there’s something special there, I would have to say the Labour Party just detached a good number of voters who thought they were something they aren’t.
One test for me is that immediately after many Government announcements I receive a glossy email from my friend, Duncan Webb, my local MP. This PR document is always clear about how exciting the latest Government decision has been. Generally, it’s quite correct. However, I am yet to hear from Duncan this week sharing his excitement about freezing the wages of many of the people who voted for him last time.
Why the hell doesn’t the Government just raise taxes? Even Labour MP’s must be wondering what the hell was added to the Cabinet coffee pot the day they made this dopey decision.
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