The Government must be getting alarmed over the wage demands of nurses, just the first group of public sector employees that are lining up for negotiations this year.

This week the NZ Nurses Organisation "strongly rejected" a $500 million offer from negotiators for all the country's district health boards that would have given nurses a 9 per cent increase in their base rates by August next year.

Unless they get an improved offer they plan to start staging one-day strikes in public hospitals.

Meanwhile primary school teachers began meeting this week to consider an offer of a pay rise ranging from 2.2 per cent to 2.6 per cent a year for three years. Their lead negotiator said the overwhelming mood of the first meeting, attended by 2500 members of their union, was that the offer fell well short of what was needed.


When the union announced last year it would be seeking a 16 per cent pay rise, the figure looked like a wildly optimistic opening bid. Now, in the light of the offer the nurses have rejected, it looks all too serious.

Public sector wage blowouts are always likely when Labour governments come to office. Helen Clark's Government faced the same pressure in its first two years.

The rhetoric is always the same, that there has been "a decade of neglect", wages have stagnated under a National government, the service is chronically short of staff and the pay is no longer enough to recruit and retain enough people.

The truth is public sector pay on average is significantly higher than the private sector, the job security is much greater and staffing levels generally more generous than in the private sector where revenue has to be earned from paying customers.

To be paid from taxation confers a double advantage in wage bargaining. The work carries no charge or price to test its value, and the fact that it comes free to those who receive it greatly increases their gratitude. Nurses can tap a bottomless well of public appreciation at a time such as this.

Who would dare suggest a limit on how much a nurse is worth? Yet there has to be a limit. Health is one of the heaviest burdens on the public budget and the hardest to contain.

Finance Minister Grant Robertson has told nurses there is no more money available - if they are to exact a higher offer from the district health boards it will need to come at no further cost to the Budget.

A nurse's starting salary is just under $50,000 a year, which is about the average income of New Zealand. The nurses' scale rises to $66,775 at present, which is not high.

Schoolteachers' top rate is $10,000 higher. But these are base rates, remuneration usually also includes rewards for performance and incentives for efficiency.

This Government seems not to be pressing for performance pay and efficiencies in public services.

Rather it is inviting pay equity exercises for predominantly female occupations. Pay equity is part of the nurses' claim, which could make it even more expensive. They have seen the rest home workers' settlement.

The new Government is facing a concerted public sector pay thrust that will test its mettle.