Local government wage cuts only for those earning more than $ 100k

The Remuneration Authority says that temporary salary cuts for mayors and council members will only apply to those who earn more than $ 100,000 a year.

The Government is presenting legislation today that will allow the Remuneration Authority to make temporary reductions in the salaries of elected politicians and senior public officials.

In April, Prime Minister Jacinda Ardern announced that all ministers would receive a 20 percent pay cut for six months in light of the economic consequences of Covid-19.

Many members of local government across the country did the same.

But technically, none of them has the ability to reduce their salary, which is determined by the independent Remuneration Authority and established in the legislation.

Under some public pressure and in the face of a lobbying campaign for wage cuts led by the Taxpayers Union, many chose to donate to charity as a way to avoid the rules to show solidarity with their constituents.

That movement has raised some questions about transparency. For example, Wellington Mayor Andy Foster has declined to reveal which charities he is giving his pay cut by describing the request for that information as “too intrusive.”

Meredith Blackler, director of culture and staff for Wellington City Council, also noted that if payments were made directly to charities, rather than through payroll, they would be more difficult to audit.

But State Services Minister Chris Hipkins said today that the Remuneration Authority Act would be amended to allow the authority to temporarily reduce ministers’ pay as agreed by the Cabinet in April.

“It will also allow the Remuneration Authority, for a limited time, to make a temporary determination that results in a reduction in wages of up to 20 percent for six months for a group of senior public officials covered by the law, including parliamentarians and local members elected members of government.

“We are aware that several elected local government leaders have also indicated that they would like to take a temporary pay cut. This legislation will give the authority discretion to do that,” he said.

The bill is expected to pass on Friday.

The president of the Remuneration Authority, Dame Fran Wilde, sent an email to the mayors and presidents of regional councils across the country after the government’s announcement this morning.

She said any temporary salary reductions allowed in the legislation should only apply to elected members whose compensation exceeds $ 100,000 per year.

This would not apply as a general cut, with a higher percentage deducted from the pay of those who earn more compared to those on the lower end of the scale.

Any deduction would be for six months, Wilde said.

There are 78 local councils in New Zealand and what the elected members are paid varies from well over $ 290,000 a year on the high end to just $ 2000 for some members of the rural community board.

Members elected by the local government do not receive retirement, sick leave, vacation pay, or transition pay at the end of their term.

New Zealand Local Government President Dave Cull said the payment of elected members overall was quite modest, noting that many would not even be on minimum wage.

“It would not be fair to inflict difficulties on them or their families.

“The workload for many elected members has only grown since the closure began as they actively participate in their local CDEM teams, community support groups and, obviously, their own council as they work through problems in their communities and regions on a daily basis. “

Wilde was sad because he knew that many elected members of the local government have donated to charities during the closure of Covid-19.

“We will take this into account if we have received advice from an elected member on the amount of any donation when deciding on an appropriate temporary reduction for each position.”