Health Minister David Clark says the Government has reached its limit for nurses' pay, despite Deputy Prime Minister Winston Peters saying the Government could do better.
"We've put everything we can on the table," Mr Clark told The AM Show on Tuesday.
Nurses voted to discard the latest $500 million pay offer from New Zealand's District Health Boards (DHBs) on Monday, rejecting an offer of a nine percent pay increase over 15 months, and a $2000 one-off lump sum.
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Salary limits would increase for registered nurses with more than five years' experience, meaning some could get increases of about 16 percent. But the union says while the latest offer was a substantial improvement on pay, variability over pay increases has created uncertainty.
"We are disappointed that the nurses have voted against this offer. It's the biggest offer in more than a decade - half a billion dollars," said Mr Clark, detailing the Government's plan to continue talks with nurses to see if a better deal for them can be made.
"We're a fiscally responsible Government and we've got to allow for the fact that we have things like Mycoplasma bovis coming up, or natural disasters like earthquakes, and we want to make sure that when those events arrive we do have the books in good shape," Mr Clark said.
"We've put out what we consider to be a generous offer. The Government came to the table with an additional quarter of a billion dollars after the nurses rejected the first offer which was already more generous than the average offer under the previous Government."
Mr Clark blamed underfunding by the previous National Government for building up "frustration" among New Zealand nurses.
He said the only way through the current dilemma is to "continue to talk" to the nurses and put a different package together, even though Mr Peters suggested the Government could improve its offer when he told The AM Show on Tuesday: "Could we do better? Possibly."
But Mr Clark defended Mr Peters' statement, saying "better doesn't necessarily mean more money, but it may mean that things are shaped differently in that package."
"He and I have been talking closely," Mr Clark said of his relationship with Mr Peters.
He said the Government has made an effort to meet the concerns of New Zealand nurses, including improving working conditions by increasing the workforce by 10 percent. This was an issue that came out of the independent panel process, he said.
"The DHBs and the nurses have both indicated that they want to come to the table and talk through whether there are changes that could be made. We need to hear from the nurses about what would make the offer more acceptable," Mr Clark said.
"Nobody's saying that the nurses shouldn't have more money and that's why this is the most generous offer in more than a decade, but we can't fix nine years of underfunding in one pay round and we have made sure that there are things on safety and security."
Last week Mr Clark came under fire after Newshub obtained a voicemail which suggested he was trying to gag senior staff talking publicly about the state of embattled Middlemore Hospital. Several buildings at the hospital, located in south Auckland, have serious rot and mould problems, posing health risks to staff and patients.
In one voicemail Mr Clark appeared to promise District Health Board member Rabin Rabindran, who he'd sacked, another job if he shut up. But Mr Clark defended the voicemail on The AM Show, saying there was no malice in the phone message and that he didn't stop anyone from speaking publicly on concerns about the hospital.
"Mr Rabindran was concerned about his reputation after being moved on when he hadn't been in the job a terribly long time, and I wanted to help make sure that his reputation was preserved," said Mr Clark.
"I heard his concerns and one of the suggestions we discussed was whether there was an opportunity for him to go to other roles."
"I don't think the public care about the 'he said, she said' - they just want us to get on with fixing the hospital and I see this as something of a distraction from that."