Chris Hipkins insists Labour has a consistent position on how it would handle future pay equity settlement funding, as National attacks what it claims is “economic incoherence” within the Opposition party.
The Herald reported on Thursday night that while Hipkins had committed to reversing recent pay equity adjustments, he was unwilling to promise Labour would return the $12.8 billion in savings created by the changes back to the regime should he be re-elected.
That position was put into question on Friday morning, when his finance spokeswoman, Barbara Edmonds was asked on RNZ how her party would find that near-$13b and she answered, “we’re going to have to find it”.
Those comments prompted criticism from National, with senior MP Chris Bishop issuing a statement titled, “Labour’s economic incoherence reaches crisis point”.
“New Zealanders looking for some kind of economic coherence from the Labour Party will have to keep searching, after yet another round of conflicting positions from its Leader and Finance spokesperson,” he said.
Hipkins held a press conference alongside Edmonds and Labour’s health spokeswoman Dr Ayesha Verrall later on Friday to address post-Budget questions.
He began by criticising the Government for “spending most of their time” talking about Labour rather than what had been delivered for New Zealand in the Budget.
“They’re trying to whip up a frenzy around pay equity, having said to New Zealanders for the last two weeks that this wasn’t about saving money for the budget,” Hipkins said.
“It seems to me that the money they’ve saved in the Budget by cutting women’s pay is the only thing that they can talk about around pay equity at the moment. So I think if anyone is struggling to get their story straight when it comes to women’s pay, it’s this Government.”
Asked by the Herald if he could clear up Labour’s position on whether the party would return the $13b to the pay equity fund or not, Hipkins responded that he and Edmonds had been “very, very clear”.
“Labour will reverse the Government’s changes to pay equity. We’ll set out how much that will cost and how we will pay for that in our fiscal plan that we set out before the election,” Hipkins said.
“We’re not in a position to do that at the moment because we haven’t seen the breakdown of where that figure actually comes from.”
When it was put to Hipkins that Edmonds responding to a question about the $13b by saying “we’re going to find it”, suggested Labour would return that amount of money to the fund, Hipkins again insisted they were on the same page.
Edmonds said at the press conference that Labour would be looking through future Budget papers to understand how the Government got to its savings figure. For example, part of that $12.8b figure is $1.8b in capital investment, and she wants to know what makes that up.
“We’re committed to pay equity and we will find the money. We need to put the appropriate contingencies aside for pay equity,” Edmonds said.
Less than an hour before Labour’s media appearance, the Green Party’s co-leaders Chlöe Swarbrick and Marama Davidson held their press conference.
Swarbrick was direct that the Greens would return the $13b to pay equity and fund it through new taxes and borrowing as outlined in the party’s recently released alternative budget.
Asked why Labour couldn’t be as clear about returning the $13b, Hipkins said the Greens’ position was a matter for them.
He said the amount of money that would need to be put aside after a future election could not yet be estimated.
“What we also recognise is that a lot can change in 18 months, bearing in mind some of the workforces that ... were in line for pay equity and had their pay equity claims cancelled are also going to be collective-bargaining this year, so the amount required could change.
“We have been very clear, we’ll reverse the changes that the Government made and we will calculate what that’s worth, and we will make sure that we’ve set aside funding to pay for that.”
Hipkins refused to say if there would be a cap on how much money Labour could put towards future potential pay equity settlements. He said Labour would make “sure women are paid properly”.
This issue stems from the Government’s pay equity reforms earlier this month, which ministers said were necessary to ensure the regime remained focused on addressing sex-based discrimination.
The changes raised the threshold for claims and narrowed what roles groups could compare themselves to. However, future settlements are still expected, the Government said.
The financial consequence of the changes was that less money needed to be booked to cover potential future pay settlements. Prior to the delivery of the Budget, ministers told reporters this would equate to “billions” but the precise figure was not made immediately clear.
The Budget papers showed that as a result of the changes – as well as removing an assumption that the Government fully fund potential settlements involving non-Government employers – “the estimated cost of pay equity settlements for the Crown has significantly reduced” compared with previous forecasts.
“Overall, the reduction in funding has created fiscal headroom of $12.8b over the forecast period,” the Budget Economic and Fiscal Update (Befu) stated.
Finance Minister Nicola Willis said these savings were being “redirected to support investments in frontline health, education, and other government services” and additional money was still being retained in contingency to settle future pay equity claims.
The amount of money being kept aside is secret to avoid affecting negotiating positions.
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.
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