The Government has quietly agreed to raise the range of fees board members of Crown bodies could be paid, in some cases by 80%.
Under the increase, revealed in a Cabinet document uploaded online without fanfare today, the top potential annual fee for chairs of governance boards would rise to more than $160,000.
That compares with the top amount of $90,000 in the previous framework issued in 2022.
The document makes clear the fee ranges are not prescriptive but are guidance to ensure a consistent approach across government. A range of factors are considered when setting the fees, such as the role’s complexity and the potential for scrutiny.
The Cabinet Circular was released on the same day the Prime Minister used his weekly post-Cabinet press conference to celebrate tax relief the Government has introduced.
At last year’s Budget, it promised working-age New Zealanders would benefit on average by $16 a week from tax cuts.
Asked by the Herald why the Government had hiked the fee ranges by so much, Prime Minister Christopher Luxon said an increase was needed so these roles would be attractive and competitive.
“Historically what’s happened is the public service director fees have got completely out of whack compared to private sector fees,” Luxon said.
The Prime Minister said when billions of dollars are being spent on the likes of healthcare, it’s “important that we actually are able to attract really good governance, of the Health NZ board for example”.
“This is just acknowledging that we need to make sure that we can attract good people.”
He said he fully understood other New Zealanders may not have seen an 80% pay increase recently and recognised it’s still tough for some people.
“We have got so out of whack by not lifting fees over a long period of time.
“We need to make sure that we’ve got a competitive enough offering to be able to attract good people that we know can make a huge difference and can actually generate huge value for money and savings.”
Asked what his message was to someone struggling with the cost of living while the Government was lifting board fees, Luxon pointed to other actions the Government had taken.
He mentioned efforts to clamp down on inflation, pouring money into new infrastructure, and today’s announcement of removing surcharges from card payments.
Labour leader Chris Hipkins said the decision to hike the fee range at a time when “the majority of Kiwi families are struggling to make ends meet shows just how out of touch they are”.
“I can categorically say that if I was Prime Minister, that would not be my priority right now.”
The Cabinet Fees Framework lays out a range of fee levels for appointees to different bodies and criteria that appointees are marked against. The higher their score, the more they could be paid.
It applies to members of a range of bodies or groups the Crown has an interest in, such as royal commissions, ministerial inquiries and some governance boards.
However, it doesn’t cover pay set by the Remuneration Authority, which deals with MPs, the judiciary and the heads of various commissions and authorities.
The framework is reviewed every three years by the Public Service Commission, which reports to Cabinet on the fees.
The circular issued today says Cabinet agreed to a revised framework that took effect from July 1.
A list of “main changes” from the previous framework include “an increase of 80% to the fee ranges” for some governance boards and “an increase of 30%” for other bodies.
It is “not intended to be prescriptive, and judgment will be required to determine best fit”, the document says. It enables a “consistent approach” to setting fees across bodies.
The new framework says setting fees should “support the appointment of appropriately qualified and diverse body members”, contain expenditure within “reasonable limits” and “provide flexibility”.
“The framework enables fees to be determined by ministers and other fee-setting authorities who are most familiar with the work of particular bodies.”
There is a lengthy process of setting or reviewing members’ fees, which takes into account the complexity of their role, the degree to which the role is in the public eye, and recruitment or retention issues.
“Fees will continue to be set on a fair but conservative basis to reflect a discount for the element of public service involved,” the framework says.
Members occupying identical positions on the same body should be paid the same rate, but the framework says in some cases it “is necessary to secure people with scarce specialist skills” and therefore consideration may be given to a higher fee. Alternatively, a fee lower than the suggested range could also be paid in some circumstances.
The framework says the schedule of fees “reflects the nature of their business environment and the role requirements”.
The 80% increase applies to the fee range for governance boards responsible for most Crown entities.
The top range, for those appointees given the highest scores against the set criteria, is between $73,100 and $162,200 for a chair and $36,500 and $80,400 for a member.
This compares to the previous 2022 framework, which had a range of $40,596 to $90,123 for chairs and $20,295 to $44,655 for members.
The new bottom range for this group is between $25,800 and $54,200 for a chair and between $12,900 and $27,100 for a member.
On the face of it, to be in the top range, an appointee would need to chair the governance board of an entity with a budget in the hundreds of millions of dollars or above, and with more than one primary function. This would require consultation with the commission.
The range reflects an annual rate, which the framework says is consistent with the private sector and is appropriate given the workload is “predictable and/or substantial”.
It’s expected these members work about 30 days a year, “which is in line with the amount of time spent by board directors in private sector companies”, while chairs are expected to work about 50 days a year.
“The fees for chairs is set at approximately twice the rate of the members to take account of both the differences in responsibility and in workload,” the framework says.
“Where it is anticipated that a chair or members will have a lesser workload than above, it is expected that this be reflected in the fee level.”
Another grouping with its own fee ranges is members of statutory tribunals and authorities. This is reflected in a daily rate as it is expected their workload will be “unpredictable”.
The top range for these chairs is between $995 and $1550, or between $640 and $990 for members. The bottom range is between $525 and $770 for chairs, and between $416 and $500 for members.
A range of additional information is also provided around expenses, how to review current members’ fees and where exceptions to the framework could apply.
A report from the Institute of Directors in October found directors’ fees had not been keeping pace with inflation.
“Despite some claims that directors are overpaid, non-executive director fees rarely increase in line with general employee increases or inflation.”
Jamie Ensor is a political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. In 2025, he was a finalist for Political Journalist of the Year at the Voyager Media Awards.