Coronavirus: Government introducing legislation to cut ministers' pay for six months

The Government is introducing legislation on Thursday that will allow the pay of ministers and top public officials to be cut by 20 percent.

Prime Minister Jacinda Ardern announced last month that she, her ministerial team and some public sector bosses would have their pay slashed by 20 percent for six months in recognition of "New Zealanders who are reliant on wage subsidies, taking pay cuts and losing their jobs as a result of the COVID-19 global pandemic". 

Opposition leader Simon Bridges will also take a pay cut.

The Remuneration Authority Act, which sets the pay of ministers, will be amended to enable the Authority to make the changes. The amendment will be introduced on Thursday and is expected to be passed on Friday.

"It will also allow the Remuneration Authority for a limited time, to make a temporary determination that results in a reduction in pay up to 20 percent for six months for a group of top public officials covered by the Act, including MPs and elected local government members," State Services Minister Chris Hipkins says.

"We are aware that a number of elected local government leaders have also indicated they would like to take a temporary pay cut. This legislation will allow the Authority the discretion to do that.

"There is significant variation in the level of pay across the various roles the Remuneration Authority sets salaries for. The Authority will have the discretion to determine which reductions may be appropriate, and if they feel appropriate, apply different deductions to different roles."

Hipkins said these "short-term measures" are about "showing leadership" during a "1-in-100 year shock to our society and economy".

The salary slashing will see Ardern take a cut of $47,104. 

Deputy Prime Minister Winston Peters' new salary for 2020 will be reduced from $334,734 to $302,261, saving $33,473. Cabinet ministers' salaries for 2019 will drop from $296,007 to $269,107 while ministers outside Cabinet will have their salaries drop from $249,839 to $224,856.

The Government has previously vetoed the introduction of a Bill by Act leader David Seymour to cut the salaries of all MPs by 20 percent for six months.

Positions included in the proposed amendment:

Members of Parliament

  • Including the Prime Minister, Ministers and Parliamentary Undersecretaries.

Others who are part of the Executive branch

  • The Solicitor-General
  • The State Services Commissioner and Deputy State Services Commissioner
  • The Chief Parliamentary Counsel
  • The Commissioner of Police and The Deputy Commissioner of Police
  • The Chief of Defence Force, The Chief of Navy, the Chief of Air Force, the Chief of Army.

Officers of Parliament and Related Officers 

  • The Controller and Auditor-General and the Deputy Controller and Auditor-General
  • The Ombudsmen
  • The Parliamentary Commissioner for the Environment
  • The Chief Executive of the Parliamentary Service
  • The Clerk of the House of Representatives.

Local Government Elected Officials 

  • Mayors, deputy mayors, chairpersons, deputy chairpersons and members of local authorities.

Independent Crown Entities and Corporations Sole 

  • The Retirement Commissioner
  • The Children’s Commissioner
  • the Privacy Commissioner and Deputy Privacy Commissioner
  • The Health and Disability Commissioner, the Mental Health Commissioner and Deputy Health and Disability Commissioners
  • The Chief Censor of Film and Literature and the Deputy Chief Censor of Film and Literature

Members of

  • the Commerce Commission (and associate members)
  • the Broadcasting Standards Authority
  • Drug Free Sport New Zealand
  • the Electricity Authority
  • the Electoral Commission
  • the External Reporting Board
  • the Financial Markets Authority (and associate members)
  • the Climate Change Commission
  • the Human Rights Commission (and alternate members) and the Director of Human Rights Proceedings or his or her alternate
  • the Law Commission
  • the Takeovers Panel
  • the Transport Accident Investigation Commission
  • the Criminal Cases Review Commission
  • the Electricity Authority
  • the New Zealand Productivity Commission.

The Māori trustee