A government takeover of the troubled Novopay teachers' pay system is potentially a "really good move", says a Western Bay principal.

Yesterday Senior Cabinet Minister Steven Joyce announced a Government-owned company would take over management of the Novopay system from Australian company Talent2 from October this year.

Western Bay schools have struck countless problems with the system since it was introduced in 2012, including overpayment and underpayment of wages as well as missed wages, with school staff working long hours to try to correct the problems.

Western Bay of Plenty Principals Association president Dane Robertson, of Kaimai School, said while Novopay had "gone off the media radar" of late, problems remained with the system.


"It is getting better but it's still not 100 per cent."

The Government takeover seemed to be a step in the right direction, he said.

Prevailing problems with Novopay included any changes made to staff pay conditions or working hours.

"It can be things such as incorrect pay rates or being paid too much or not enough."

His school had faced difficulties contacting Novopay.

"When schools do contact Novopay, most of the time you'll get somebody different each time."

The Ministry of Education had "tried to do their best" to help schools work through Novopay problems, he said.

Talent2 will pay the Ministry of Education between $18 million and $22 million including $7m cash and other considerations such as license to use the core software by way of a settlement.

Mr Joyce, the minister responsible for Novopay, said although the system had been improving, recent contractual issues involving Talent2 not being prepared to further resource the system led to the takeover.

Reaction from the education sector has been mixed.

New Zealand Principals' Federation president Phil Harding said while placing Novopay under Government management would bring greater accountability to the public, its announcement did not cure the Novopay "shambles".

"The same challenges of random errors, frustratingly slow problem resolution, inaccurate personnel data, and significantly increased workload will continue," he said.

"Success will be determined by the way the new entity is managed and, more importantly, resourced to deal to these priorities."

The federation wanted the money from Talent2 reinvested in schools to alleviate extra costs they had incurred and would continue to incur.

New Zealand Educational Institute national secretary Paul Goulter said the Government should have taken over Novopay at least a year ago.

"Government has dragged its feet for two years while the problems with Novopay wreaked havoc in our schools."

- Additional reporting by Adam Bennett