Goff takes aim at the 'privileged elite'

Phil Goff tells his Hamilton audience that 'surely it's not too much for those at the top to share in the sacrifice' of those at the bottom. Photo / Christine Cornege

Labour leader Phil Goff has kicked off the year with an attack on the "privileged elite" and a pledge that Labour will cap the salaries of public sector bosses at the same salary as the Prime Minister, challenging private companies to also peg in salaries for bosses.

In his first big speech of the year in Hamilton yesterday, Mr Goff set out Labour's plans for the year ahead, saying he considered it his job to battle any moves that favoured the privileged elite over those on lower wages.

He said the Government should lead by example and Labour would cap the salaries of public service chief executives at the same rate as the Prime Minister - at present just under $400,000. Chief executive salaries range from $260,000 to $600,000 for Foreign Affairs head John Allen.

Mr Goff said present wages would not be cut, but the cap should be applied to new appointments.

"If $400,000 isn't enough for you to be the head of a public service department, maybe you've got to examine what the words public service actually mean."

Speaking to a crowd of about 300 largely invited guests, he challenged private sector companies to follow suit.

He said the Conservative Party in England was considering a similar move, so the move could not be dismissed as one from a "socialist Labour Party".

"When times are tough and you're asking for sacrifice at the bottom, surely it's not too much for those at the top to share in the sacrifice."

The salaries of public service bosses had risen by 85 per cent since 1997 - or 8 per cent a year - while those on the minimum wage were getting just a 2 per cent increase of $10 a week this year, reduced to $6 in the hand once tax and rising living costs were factored in.

"That's enough to buy one family-sized packet of Weet-Bix."

He hit out against the country's most wealthy individuals after the Tax Reform Working Group found half of the 100 wealthiest people were not paying the top tax rate. He believed most workers deeply resented others avoiding paying their proper taxes.

"They got their start in New Zealand, they got their education in New Zealand, they were born in a public hospital in New Zealand, they took from New Zealand but now they don't want to give back. And they still ask for the knighthoods and still get the knighthoods and I'm offended by that."

He also looked at the other end of the spectrum, saying those who rorted the benefit system only gave the government excuses to cut services.

Prime Minister John Key dismissed the suggestion to cap chief executive salaries, saying it was hypocritical of Mr Goff to suggest it when much of the growth in salaries had been under the Labour government.

He said the Government competed with the private sector for staff and hoping that a love of the job was enough to get high-quality managers was a dumb idea. He dismissed Mr Goff's speech.

"After nine years in government and a long summer break, the best Phil Goff can come up with to revolutionise the economy is to cap salaries of public service heads. I don't think that's coherent economic policy."

Mr Goff later accepted salaries had increased during Labour's nine years in power, but said wages had also been going up across the board at that time. He believed $400,000 was enough to attract the calibre needed.

Asked to explain why Labour had not chosen to peg back salaries in its time in government, he said it was a time when others weren't being laid off and having their pay frozen.

"You've got a new environment and a new leader of the Labour Party and you've got a party that is in Opposition that has a chance to rethink its policy. We've done just that."

His strongly delivered speech was clearly aimed at showing Mr Goff's determination to come out fighting for the year and to align the Labour Party closely with its working-class roots.

Many in the audience, including some unionists, applauded strongly at any suggestions that the wealthy were gaining while less well-off workers were struggling.

Mr Goff often departed from his notes to talk about the areas his party intended to fight the Government on, based around the theme of ensuring "hard-working New Zealanders" were not left behind in any reforms.

He said Labour would resist any moves to increase GST if the trade-off was tax cuts only for high-income earners.

PAY PACKETS
* Prime Minister: About $400,000
* Foreign Affairs chief: About $600,000
* Health chief: About $550,000
* Justice chief: About $500,000
* Social Development: About $550,000
* Treasury chief: About $550,000