Prime Minister Jacinda Ardern says lifting the starting pay rates for nurses is partly aimed at keeping them from migrating to Australia.
She made the comments this morning as nurses are set to strike for eight hours tomorrow, having rejected the latest DHB pay offer yesterday.
Essential services at hospitals will be maintained.
Ardern said the Government wasn't in a position to give the nurses what they had originally asked for - a 17 per cent across-the-board pay rise.
"In this Covid environment, just as with the GFC, we are in a position where we are financially constrained.
"What we are offering makes a real effort to lift those on the lowest pay bands."
Ardern said the Government's offer would lift pay for nurses on the bottom salary bands by between 4 and 10 per cent.
Asked about nurses heading to Australia, especially with the quarantine-free transtasman bubble operating, she said: "Even 18 months ago we've always had that contestability."
Lifting the starting rates for nurses was also aimed at keeping them in New Zealand, she added.
But National Party leader Judith Collins said the Government was more focused on restructuring the health system, for which $486 million has been set aside in Budget 2021.
"It's one of the issues nurses have been contacting us about. They feel, undervalued, unloved, disrespected, and they don't understand on why the Government is focused on restructuring."
Collins said there was a "very real risk" of nurses heading to Australia.
"It's very clear to me that the Australian government and the Australian health system very much values New Zealand nurses.
"We also understand anecdotally that senior nurses are already being targeted, and are being targeted with better wages, better working conditions, and a government that values nurses."
Asked about whether National, when it was in government, had done enough to pay nurses, Collins said they had to deal with the GFC while the current Government was restructuring the health system in the middle of a pandemic.
The latest offer from the DHBs included a lump sum payment of $4000 to all staff, ahead of their pay equity claim to be settled later this year.
Health Minister Andrew Little said the pay equity claim would have a "significant impact" on pay.
Taken in the context of also having added about 3000 nurses to the workforce in recent years it was a "reasonable offer", Little said.
Money set aside for restructuring the health system would go into commissioning new services but reforms proposed meant there would be greater consistency across the network and improving working conditions, Little said.
The eight-hour nurses' strike will affect all public hospitals and DHB facilities around New Zealand. It will run from 11am to 7pm, and involve nurses, midwives and hospital assistants.
"Members are facing serious nursing workforce issues, with pay rates that do not attract people into the profession or retain the people we have, and staffing levels which stretch them to breaking point, putting them and their patients at risk," said NZNO lead advocate David Wait.
"Members know that lump sum payments do not lift actual rates of pay, which impacts on the long-term issues of a health system that values nurses and their work, attracts new people into the profession and encourages others back from overseas.
"They also find it unfair that they are being asked to wait for the pay equity process, when there is uncertainty about when this will happen or what the results will be."
He said it was "heartbreaking" that health workers were forced to choose industrial action, but did not rule out further strike action.
Nurses were originally offered a 1.38 per cent wage increase, but Deputy Prime Minister Grant Robertson said that averaging the increase across the whole workforce didn't show how those on the lowest pay bands would benefit.