Nicola Willis says just because inflation is dropping, public servants should not expect pay rises and the sector remains in a state of “restraint and moderation”.
Speaking to Newstalk ZB’s Mike Hosking this morning, the Finance and Public Service Minister said it was important government agencies were realistic about current financial circumstances.
“We have to be extremely disciplined if we are going to hit our budget.”
Willis said the public sector is being told to act with caution around collective bargaining agreements due to those budget constraints. She also said despite inflation going down, there is not an urgent need for pay rises.
She has also released a workforce statement confirming the Government could continue to pay employees bonuses for Māori language skills, despite those bonuses generating controversy last year.
Willis outlined the strategy in Parliament on Wednesday, saying it was one of three legs to her Budget strategy for 2025, the other two legs being to set a “very high bar” for new spending initiatives and to run a second cutting exercise, similar to the one in Budget 2024.
“With a small number of exceptions, government departments should expect to receive no additional funding in the Budget. They must manage cost pressures within their baselines and if they want to do new things, they will need to reprioritise from existing activities,” Willis said.
Not every department will be affected. Budget 2024 set a multi-year health Budget that saw funding increase by $1.43 billion this year followed by a $1.37b increase next year.
Finance Minister Nicola Willis said the public sector will need to show more restraint. Photo / Mark Mitchell
Willis also published a Workforce Policy Statement which outlined how departments should deal with workforce matters including remuneration, negotiation of employment agreements, pay equity, diversity, data and information.
The statement said employment in departments needed to be “fiscally sustainable and respond to the current fiscal context and any current budget advice”.
The statement explicitly protects departments’ right to pay additional allowances to staff with Māori language skills.
“The payment of allowances in addition to base salary may be acceptable in limited circumstances, for example, to recognise skills or duties which are occasional, rather than core to the role.
“The payment of allowances can be justified where the agency can demonstrate that payment of that allowance will be an effective way for the Crown to uphold its obligations including under Te Ture mō Te Reo Māori 2016/the Māori Language Act 2016 or any other Act or obligations,” the statement said.
“I accept there will be many circumstances where receiving a bonus for te reo Māori use could be relevant to the job at hand,” Willis told RNZ last year.
“I think if you’re in a government agency and you’re engaging with iwi Māori, or you are working with Māori communities where te reo Māori is used as a primary language, then it would be really relevant to make your public service accessible for that community,” she said.
