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Home / New Zealand

'A period of pay restraint:' The Government to send expectation letter to SOE bosses

Jason Walls
By Jason Walls
Political Editor – Newstalk ZB·NZ Herald·
3 Dec, 2020 04:00 PM3 mins to read

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Finance Minister Grant Robertson would not go into detail as to what the letter would explicitly say. Photo / Mark Mitchell

Finance Minister Grant Robertson would not go into detail as to what the letter would explicitly say. Photo / Mark Mitchell

The Government is poised to send a clear message to the bosses of New Zealand's biggest State-Owned Enterprises: Don't give yourselves a pay rise this Christmas.

That includes the likes of Air New Zealand boss Greg Foran, and the directors of some of the country's biggest electricity companies.

The letter will make it clear that there is "a period of pay restraint within the public sector," according to Finance Minister Grant Robertson.

"One of the things we all know in the Covid environment we are in now is that it will be a period of pay restraint within wider public sector."

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The message will likely come in the form of a letter of intent – something ministers often send out to their ministries and departments when a new Government is elected.

"Clearly, Covid-19 has had a big impact on the whole country – I don't think people would expect anything less," Robertson said.

He added that all New Zealanders have been going through a very challenging and difficult period.

Robertson would not go into detail as to what that letter would explicitly say.

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"All I'm saying is everyone will understand this will be a period of pay restraint."

Minister of State-Owned Enterprises David Clark was similarly tight-lipped – he would only say the letters were "still in development".

"I'll have more to say when they [the letters] are finished, out and ready to send."

State-Owned Enterprises are partly Government-owned – Air NZ, Mercury, Genesis and Meridian are all 51 per cent owned by the Government.

But they are all publicly listed on New Zealand's stock market. As such, the Government cannot explicitly direct bosses not to increase their pay.

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But Ministers are within their rights to make their expectations known to these companies.

Last year, the Herald reported that Robertson had asked the chairs of the country's three biggest power companies and Air New Zealand not to give themselves and the companies' directors a pay rise.

"As you know," the letters said, "this Government is committed to raising pay levels for those on low and middle incomes and we, and the public, expect restraint on director remuneration."

"Given this, I do not support any increase in director remuneration during this term of Parliament."

And this year, the heads of the Government's departments and ministries all took a 20 per cent pay cut.

"It is the right thing to do, and I acknowledge chief executives for volunteering to take the pay cut alongside us," Prime Minister Jacinda Ardern said at the time.

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