Waka Kotahi gives big bonuses to well-paid staff, claims they're 'recognition payments'

At NZTA this financial year, up till May, $246,000 was awarded to 135 employees.
At NZTA this financial year, up till May, $246,000 was awarded to 135 employees. Photo credit: RNZ

Phil Pennington for RNZ

The Transport Agency has given out a quarter of a million dollars in bonuses, with much more of it going to its better-paid staff than to lower earners.

That's not a shade on the ACC, where yearly bonuses total $6m.

Elsewhere, bonus payments have become endangered in the core public service since orders went out a few years ago to get rid of them.

The 2018 directive put paid entirely to the practice of giving chief executives a bonus.

But they cling on for regular staffers in parts of the core - such as Corrections and Internal Affairs - and outside the core, for instance, at Waka Kotahi and Accident Compensation (though not at the non-core Police).

"Current data indicates 0.2 percent of the workforce in public service departments and departmental agencies received performance pay in 2022," the Public Service Commission told RNZ.

It is a far cry from 20 years ago when the NZ Herald reported 'Bonuses part of the deal for state staff' and 'Work and Income staff collect $5.8 million in bonuses'.

At NZTA this financial year, up till May, $246,000 was awarded to 135 employees, from a workforce 20 times that, an OIA showed.

"Waka Kotahi does not pay staff bonuses," the agency said - because it prefers to call them "recognition payments" separate from pay rises ("a one-off payment to recognise instances of where employees have gone above and beyond in their roles").

Select committee reviews call them bonuses.

About a quarter of the Transport Agency total that went to workers who earn under $100,000 in salary - and those low earners make up 40 percent of NZTA staff.

By contrast, almost two thirds of the $246,000 went to the 40 percent of staff sitting prettier, on $100,000-$150,000 salaries.

The two biggest bunches of bonuses - all of which are either $1500, $3000 or $5000 - went to a cohort earning between $106,000-$184,000.

Someone on more than $240,000 got a $3000 bonus.

Eighteen bonuses went to staffers earning $149,000-$215,000.

Its practice was "in line with public sector guidance on pay restraint", Waka Kotahi told RNZ.

Elsewhere, the agency said, "The number of our people in higher band levels continue to increase, due to our growing organisational mandate requiring specialist skills to meet government and public expectations and to meet the employment market during a time of historically low unemployment and high inflation."

At the same time, it said it had "an over-representation of female employees in lower job bands" - a gender pay gap it was working to close.

Waka Kotahi has capped its total bonuses at at $250,000 this year, below the $334,000 paid out last financial year, and above the $168,000 the year prior.

Fewer but bigger at ACC

Meanwhile, the non-core ACC had far fewer but far bigger bonuses.

There, 34 employees shared $6.1m in 2020-21 (the latest year for which an annual review is available).

One got a bonus of up to $460,000; two up to $415,000; one up to $335,000; one up to $325,000 and one up to $290,000.

Why so large?

"In general, ACC does not pay bonuses to staff," its annual review said.

The exception was a specialist technical group within the investment team "as the prospect of bonus payments is necessary to ensure ACC meets competitive employment conditions in a specialist industry sector where bonuses are common".

They only get one if they "meet or exceed externally benchmarked individual performance criteria".

In the core public service, bonuses have disappeared at Justice, Education, the Ministry of Transport, Oranga Tamariki, Health and the Public Service Commission and doubtless others, too.

MBIE last paid them in 2018-19 - $420,000 then - and nothing since.

Corrections is a bit out of step - perhaps reflecting its woes attracting new prison guards - giving out bonuses of $239,000 last year to 94 staff, at up to $5000 each.

The number who get one has bounced around, but the trend is up, not down, from just 65 in 2017.

"Corrections continues to adhere to the Public Service Pay Guidance 2021 from the Public Service Commission by continuing to show restraint in decisions on remuneration, particularly for higher paid staff," it told the select committee.

Internal Affairs has tightened the belt more, with bonuses dropping from $223,000 for 137 workers in 2017, to just $15,000 for 44 now.

IRD chimed in with a single 'at risk' payment - "only paid on achievement of identified performance objectives", and no longer offered to new senior leaders - of $56,000.

The 2018 directive from the PSC - that "employers will work toward removing at-risk pay and performance bonuses from pay policies and employment agreements" - has definitely had an impact.

The commission dropped all mention of bonuses from its 2021 and 2023 pay guidance, which majors on restraint overall.

The bonus crackdown has been more effective than the directives during the same period, for public agencies to cut their big spending on contractors and consultants. It did level off a little, but then jumped higher last year to well over a billion dollars.