Progress on public service pay adjustment

The Government welcomes progress on public sector pay adjustment (PSPA) agreements, and the release of the updated public service pay guidance by the Public Service Commission today, Minister for the Public Service Andrew Little says.

“More than a dozen collective agreements are now settled in the public service, Crown Agents, and education sectors in line with the agreed PSPA with more underway.”

PSPA potentially affects more than 150 collective agreements in the Public Service, Crown agents, Te Whatu Ora - Health New Zealand, state and state-integrated schools, registered kindergarten teachers in free kindergartens, New Zealand Police, and the New Zealand Defence Force.

“A significant number of public sector workers are likely to enter negotiations over the coming year, and so following a proposal by the New Zealand Council of Trade Unions (NZCTU), the Government agreed to look into a pay adjustment for all workers at the same time,” Andrew Little said.

“Under the agreed terms of the PSPA workers would receive payments of $4000 in year one, and either $2000 or 3-percent of their annual income in year two.

“This is an attempt to give public sector workers an affordable increase that balances the current economic environment and cost of living pressures.

“Previous guidance in 2020 had a greater emphasis on pay restraint, especially for higher paid roles, and was fit for purpose in response to COVID,” Andrew Little said.

“The pay guidance update recognises the current cost of living pressures being felt across the country and the economy.

“I am confident this approach strikes the right balance in difficult times,” Andrew Little said.

The updated guidance assists agencies to adopt a remuneration approach that:

  • Recognises that the current environment is one of pressure on wages in all parts of the economy
  • Reflects and reinforces the PSPA offer and supports consistency of outcome for those out of scope
  • Recognises the Government’s ambitions to prioritise low-paid roles in any pay settlements
  • Builds on and accelerates gains made to date in reducing gender and ethnic pay gaps.