Government ministers and chief executives take pay cut

The Prime Minister, Government ministers and public service chief executives will take a pay cut of 20 per cent over the next six months, Prime Minister Jacinda Ardern announced today.

“It is the right thing to do, and I acknowledge chief executives for volunteering to take the pay cut alongside us,” Jacinda Ardern said.

“I feel acutely the struggle many New Zealanders are facing and so too do the people I work with.

“While this cut in itself won’t shift the Government’s overall fiscal position it is an acknowledgement that every person and organisation has a part to play as we unite to stamp out Covid-19 and save lives.

“It stands alongside many actions taken by all of us – Government, private sector, citizens, to tackle the health and economic challenges of Covid-19 including:

  • The more than $23 billion economic package, including the wage subsidy that has paid out over $9 billion to 1.5 million New Zealanders
  • Neighbours looking out for one another
  • Rent freezes and landlords supporting tenants
  • Boosting the winter energy payment and benefits
  • New Zealanders staying home to save lives
  • The Student Army delivering groceries to over 65s
  • The Ministry of Health officials in charge of mandatory quarantine, for which I’ve received a message about their professionalism and exceptional work

“For us it’s about showing leadership,” Jacinda Ardern said.

“This isn’t about pay cuts at the front line. We don’t want people on low and middle incomes to bear the brunt,” Minister for State Services Chris Hipkins said.

“They make up a huge part of our essential workforce. We need to sustain public sector jobs and ensure services continue to be delivered.

“The decision we’ve made is an in-principle one. We will now work through the mechanism to make it happen,” Chris Hipkins said.

Editor’s notes

Decisions taken today mean pay cuts for chief executives are likely to save $1.6 million, and an example of ministers’ cuts are in the table below.

Position Current pay Size of cut New pay
Prime Minister 471,049 47,104 423,945
Deputy Prime Minister 334,734 33,473 301,261
Cabinet Minister 296,007 26,900 269,107
Minister outside of Cabinet 249,839 24,983 224,856