National Party MPs believe an 80% hike to the pay framework for certain Crown board members is appropriate to lure the right talent, but some are also acknowledging Kiwis facing cost of living issues may struggle with the idea.
The increase, revealed by the Herald yesterday following the quiet publication of a Cabinet document, has been labelled “out of touch” by Labour leader Chris Hipkins, who noted it comes at the same time teachers and nurses are fighting for a pay rise.
The Cabinet paper confirmed ministers had agreed to changes to the fee framework after a regular review by the Public Service Commission. This review happens every three years and the new framework came into effect on July 1.
This framework isn’t prescriptive but provides ranges that guide ministers and agencies when setting pay upon appointment. A range of factors are considered, such as the role’s complexity, the entity’s budget and potential for scrutiny.
The new framework includes an 80% increase for members of governance boards of some Crown entities and trust boards. For example, the top potential annual fee for chairs will be $160,000, compared to $90,000 under the 2022 framework.
Prime Minister Christopher Luxon told the Herald on Monday that public service director fees had “got completely out of whack” compared to those in the private sector.
When someone is chairing a board of an entity with billions of dollars, it was important to offer pay that attracted the right people, Luxon said.
He said he understood other Kiwis are unlikely to have had an 80% pay increase recently and it was still tough for people.
The Government has been trying to reclaim the narrative around the cost of living recently, as the focus turns to high butter prices and a slight uptick in inflation. The Prime Minister and Finance Minister Nicola Willis spent more than 10 minutes yesterday listing various initiatives taken to address the cost of living.
The Herald sought the views of other National MPs on Tuesday morning on their way to caucus, asking how they believed their constituents would feel about an 80% increase for board members while the cost of living crisis continues to hurt.
They mostly kept to their party lines, emphasising the need to lure the right people with the right talent for what can be significant roles. But some also acknowledged the tough circumstances facing New Zealanders.
Conservation Minister Tama Potaka said everyone recognised “we need really good people on various boards”.
“In order to get the appropriate and best governance in place for some of the biggest assets and biggest contributors to the revenue that this Government gets, we need to make sure we’ve got expert people, and they come with a cost.”
Asked whether he believed constituents would struggle with the idea of these increases, Potaka responded: “I think constituents are very concerned with the cost of living and the economy.
“That’s what constituents are concerned with and some of them may be concerned with what you’ve referred to, but I think people are really, really concerned with the cost of living, and that’s something that’s confronting a lot of my constituents in Hamilton West.”
Mental Health Minister Matt Doocey said it was “fair to say” that when conversations about increases to remuneration are happening, “it’s always difficult because people are feeling it’s quite tough out there with the cost-of-living crisis”.
“I accept there’ll be a range of views around it, but in the end, I think, Judith Collins quite rightly said, if we want the right people in the job, we’ve got to pay for them.”
He’s referring to the Public Service Minister, who told the Herald today that the public sector was “competing” with the private sector.
“I struggle with the fact that we’ve got people who are chairs of some of these boards getting around $30,000 to do a job where they’re in charge of hundreds of people, plus in many cases millions and tens or hundreds of millions of dollars or some cases billions,” Collins said.
She said the Public Service Commission came up with proposed new fees.
“I looked at things and I considered things, and I’ve been a board chair as well myself in the past in the private sector. I’ve also been on boards in the Government as well before.
“I know that it takes a lot of work and if you are a person who is already active and busy and experienced, you’re often giving up time and money to do these jobs.”
Asked if she thought people would care about the pay of public directors, she responded: “Most people are not going to be worried about this.”
“The fact is, is that as the Minister of Public Service, one of the things I have to do is to make sure I remove the things that are holding us back.”
Transport Minister Chris Bishop said these people are “ultimately discharged with the duty of spending taxpayers’ money in a value-for-money way, in an efficient way and delivering roads and hospital services and schools and all the things that Government does”.
“You want the best people for the job,” Bishop said.
“I accept that everyone wants a pay rise in this tough time, and I accept that life is tough for many New Zealanders out there right now, which is why the Government’s working so hard to lift incomes, improve productivity and drive growth in the economy so that we can get the cost of living under control.”
Asked if some people may struggle with understanding the 80% increase during a cost-of-living crisis, Justice Minister Paul Goldsmith said: “Yes, but like I say, we have got to ensure that people are properly paid in those positions.”
He said it would be an “easy thing” to not change the fees “and over time that creates a problem”.
The Prime Minister reiterated he understood the context the increase was coming in.
“I understand that, but I also understand we are spending billions and billions of dollars,” Luxon said.
“But over the last decade, it’s got to such a degree that we’re being informed that actually we can’t attract good people who want to come into the public sector to do some of those jobs.”
He denied the Government was trying to sneak the increase through by just uploading the document online with little fanfare.
“I don’t think there was any intention to do that. It was a conversation that happened in the Cabinet and it was for a Cabinet circular, I think it’s normal practice.”
Labour’s Hipkins said the decision was revealing of the Government’s priorities.
“An up to 80% increase in fees for company directors are [sic] certainly good news if you’re sitting at the top table, whilst people like teachers and nurses are being asked to settle for pay increases of 1% or less.”
He said it was “absolute nonsense” to suggest it was necessary to increase the fees by so much to attract talent.
“What we found in Government was that a lot of our private sector directors will do several private sector directorships and a public sector one as a form of public service, so they’re not doing it for the money.
“They’re doing it because they’re actually motivated by altruistic motivations, they’re often doing very well paid directorships in the private sector, and they will do public sector directorships.”
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 said.
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.