More scrutiny on pay of senior public servants

Stronger oversight of the pay for chief executives and conduct of Crown Entity Board members are two of several changes in a Bill introduced in Parliament today, State Services Minister Chris Hipkins says.           

These amendments in the State Sector and Crown Entities Reform Bill are designed to bolster the public’s trust and confidence in Crown entities, which are often the face of government, Mr Hipkins said.

“This government is committed to raising pay levels for those on low and middle incomes. But there is a high level of public concern that the levels of pay for the highest paid chief executives is excessive, and in some cases, Crown entity Boards have not met either the State Service Commissioner’s or Ministers’ guidance.

These changes will address those cases in particular by giving the remuneration system more teeth. The public expects accountability and transparency, and under these changes Boards of statutory Crown entities will need to obtain the State Services Commissioner’s written consent to the terms and conditions of employment for a chief executive.”

Mr Hipkins said there are good reasons why state services pay is lower than private sector equivalents and there should be more consistency within the state services of remuneration for similarly sized jobs and between jobs.

The amendments to the State Sector Act 1988 and Crown Entities Act 2004 also address three other key areas:

  • Crown entity chief executive terms of appointment

The term for new appointments as chief executives will be for no more than five years, renewable.

  • Setting standards of integrity and conduct for Crown entity boards

The Commissioner will be able to issue a code of conduct to the Board members of all entities within scope of his mandate, in line with international practice.

  • The State Services Commissioner’s powers to carry out investigations

For more consistency in the way inquiries are conducted across government.

“The State Sector Act 1988 and Crown Entities Act 2004 were ground-breaking when they were passed. It is time, however, to reconnect certain aspects of Crown Entity Act under a unifying spirit of service to the community.

 “The Commissioner will be able to take a more consistent and integrated approach across the sector in the areas covered by these amendments.”  

 The relevant Cabinet papers can be found here.