Judith Collins blames pay freeze fiasco on Govt hiring too many 'highly-paid Wellington bureaucrats'

National Party leader Judith Collins says Labour wouldn't need to cut pay rises for public service employees if they didn't hire so many.

The Government's pay freeze for middle- and upper-income state employees, announced last week, caused a major backlash - and on Tuesday it partially backed down, reaching an agreement with unions that they can negotiate pay increases to meet the cost of living.

"We came out of it with what we wanted," Council of Trade Unions president Richard Wagstaff told The AM Show on Wednesday, "which was an agreement that bargainings weren't set, that we can discuss cost of living increases, that we will get bigger pay rises for the lower-paid - that there is no pay freeze - and a number of other things."

The Government said it had to do what it could to keep debt under control. 

Collins told The AM Show on Wednesday even high earners are feeling the squeeze these days.

"The cost of living's gone up so much, hasn't it? So if you're on $70,000, $80,000 even $90,000 or $100,000 you often are quite struggling, particularly because the cost of housing has also gone up. I think they've sort of cocked it up."

According to Statistics NZ's household living-costs price index, the cost of living has increased more slowly than usual since peaking in March 2020 at 2.4 percent year-on-year, since falling to 0.7 percent. But in the last decade, housing has outstripped other areas - such as food and transport - as the typical household's biggest expenditure.

"We didn't go and employ 10,000 more highly-paid Wellington bureaucrats - a lot of those employed, by the way, before COVID-19 - and then ask the hard-working nurses, police officers, Corrections officers, teachers to go and just, I don't know, take a pay cut effectively, because of the cost of living," said Collins.

In 2017, the public service had 47,252 full-time equivalent employees. In 2020, that had risen to 57,149. Spending on contractors and consultants has also gone up - from $923.2 million in 2018/19 to $974.9 million in 2019/20, the public service blaming the additional expenditure on COVID-19.

The total wage bill for core Crown operations has gone up from $6.9 billion in 2017 to $8.5 billion in 2020. 

Collins wouldn't be drawn on what kind of pay rises she thought public sector workers earning $100,000 a year should get.

"I think they are certainly worth better than telling them they don't get anything at all, while they've got 10,000 more bureaucrats racing around writing papers that maybe they shouldn't be writing. I'd say, we would never have employed all those 10,000. 

"I would have thought that the people who had to work all the way through the pandemics and the lockdowns - people like the police and the nurses and Corrections officers - well they deserve to be treated a little bit better, don't they?"

The biggest rise in FTE staff numbers in the year to June 2020 was at the Ministry of Social Development, "driven by increased funding to meet the rise in demand from COVID-19 and to improve support into sustainable work". 

Other big increases were recorded by Oranga Tamariki ("additional social workers and support roles in youth justice") and the Ministry for Business, Innovation and Employment ("increased funding for immigration intelligence, compliance and investigations").

Corrections is the biggest public service employer, with more than 9800 FTEs.