Govt is cheered by job-growth data but only low-paid public servants (and bus drivers, maybe) can expect wage growth

The good news is that employment rose by 15,000 in the March quarter and the unemployment rate fell from 4.9 percent to 4.7 percent.

More sobering news came from the Beehive in the form of a Workforce Policy Statement.  The nub of it is that public servants’ pay is being firmly controlled – frozen for the next few years, in the case of higher-paid public servants.

But this was camouflaged by the headline on the press statement (Government sets pay and workforce expectations for the Public Sector) and was buried in the press statement.

Another statement dealing with wages has been issued by the Beehive today.

Transport Minister Michael Wood said he is seeking feedback on options for the next phase of the Public Transport Operating Model (PTOM) review “to better protect bus drivers’ pay conditions” while achieving the Government’s target of fully decarbonising the public transport bus fleet by 2035.

Bus driver are notoriously lowly paid.

Wood said they play a key role in keeping our cities moving, getting commuters to work and giving Kiwis travel choices.

“Unfortunately, it’s obvious the former government’s PTOM policy has driven down wages and conditions for many.”

Hmm.  But hasn’t the Labour government had more than three years to do something about this?

Better late than never.

“Ensuring bus driver wages and conditions are protected whenever councils contract bus services is important. I will consider all the options in the review, including amending the Land Transport Management Act or adding public transport bus drivers to Schedule 1A of the Employment Relations Act.”

Wood said he was working with employers, unions, and Waka Kotahi (better known by most people as the NZ Transport Agency) on establishing a Living Wage floor for drivers.

He acknowledged that more change is needed to tackle chronic driver shortages and service disruptions.

Wood brought Covid-19 and zero carbon emissions into his considerations.

“We can accelerate our COVID recovery while providing cleaner public transport infrastructure to tackle climate change. We will prevent up to 4.5 million tonnes of CO2 emissions with councils only purchasing zero emissions public transport buses from 2025 and decarbonising the entire bus fleet by 2035.

“We’ve committed $50 million to help councils make the switch and we’re committed to working alongside them to make it go as far as possible,” Michael Wood said.

Public consultation is open for six weeks until 18 June.  More information can be found here: https://www.transport.govt.nz/area-of-interest/public-transport/public-transport-operating-model/

A different position on wages was sounded (eventually) in the statement from Finance Minister Grant Robertson and Public Service Minister Chris Hipkins.

First, the ministers blandly declared the Government’s Workforce Policy Statement issued today sets out its expectations for pay and employment relations in the Public Sector.

Next, Robertson did some bragging:

“New Zealand has had an exceptionally successful health and economic response to COVID-19. This has been supported by the Government taking on debt for investments like the wage subsidy that protected jobs, supported businesses and ensured the economy was ready for the recovery,” Finance Minister Grant Roberson said.

“As the recovery gets underway, we are keeping a close watch on the debt taken on during COVID-19 to support the economy. 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.”

Then the statement reminded the public that last year the Public Service Commissioner issued guidance to Public Service agencies asking them to have nil or minimal pay increases for public servants until June 2021.

The next bit of the statement was set out in Hipkins’ name, beginning with a teasing hint of what was to come:

“Today the Public Service Commissioner is updating that guidance to make clear that pay restraint will need to continue to be exercised across the Public Service for the next three years,” Minister for the Public Service Chris Hipkins said.

And at  last, the nitty-gritty:

“The updated guidance will continue to mean no pay increases for those earning over $100,000 and senior leaders within the public service.

“Any increases will be targeted to lower-paid public servants, largely those earning below $60,000, who account for about 25% of the public sector.

“We want to see those on lower wages be the focus of any increases in pay.”

Here at Point of Order, we relished the rationale:

“This is about prioritising spending. The policy will also help protect jobs by taking financial pressure off the public wage bill.”

We relished, too, the nature of a ministerial assurance:

“It will not impact the work we are doing within the Public Service to close gender and ethnic pay gaps.”

The public service was doing a good job implementing the Government’s COVID-19 response, Hipkins said,

“ … and we ask they lead the way in supporting the Government as we ensure our spending is targeted to where it is needed most.

“The guidance is consistent with the decision last year by the Remuneration Authority that Minsters and MPs would not be getting pay rises for three years because of the COVID-19 economic environment.”  

The Public Service Commissioner, who sets the pay of Public Service Chief Executives, will not be increasing their pay.

Welcoming the new employment statistics, Robertson did his braying in tandem with Carmel Sepuloni: 

 “The Government’s economic recovery plan continues to be reflected in the labour market, with more people in work and unemployment falling.”

And:

“The Government’s plan to keep people connected to their job and accelerate the recovery has been reflected in these positive results. An extra 32,000 people are in jobs since September 2020, when unemployment peaked at 5.2 percent,” Grant Robertson said.

“The Government’s COVID-19 response to outbreaks in February helped support workers and businesses, through measures such as the Resurgence Support Payment and Wage Subsidy.

“The number of people employed in Auckland hit a record high in the March quarter, to 922,000.”

Carmel Sepuloni acknowledged that unemployment is likely to fluctuate, due to the ongoing impact of the pandemic. Nevertheless, New Zealand had performed favourably against the countries we measure ourselves against.

She referenced comparable measures which show New Zealand’s 4.7 per cent unemployment rate stands against 5.9 per cent in Australia, 6.2 per cent in the United States and 8.4 per cent in Canada. The OECD average is 6.7 percent.

The stronger labour market had also seen a record number people come off the benefit in the March quarter, with nearly 33,000 entering paid work, Sepuloni said.

LATEST FROM THE BEEHIVE

5 MAY 2021

Govt motoring towards zero-carbon buses and protecting drivers’ conditions

Drop in unemployment shows Govt economic plan is working

Government sets pay and workforce expectations for the Public Sector

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