Key defends high daily rate for Govt adviser

Prime Minister John Key is defending payments of up to $2000 a day before GST for a private purchase adviser working for Finance Minister Bill English.

Labour has attacked the use of contractors, who advise ministers on their purchase agreements with their departments, saying they are hired guns to cut public spending.

The Government capped the contract for Graham Scott, a former Treasury secretary who stood for ACT in 2005, at $45,000. Other advisers' contracts were capped at $80,000, plus GST.

Responding to questions about documents released under the Official Information Act, Mr Key said Dr Scott was being paid up to $2000 a day plus GST.

"I don't think (it's excessive) in the sense that he has got a lot of responsibility in terms of giving good quality advice," Mr Key said.

"Those purchase advisers in our view have helped us to find significant savings and those savings and reprioritisations will be made clear in the budget tomorrow.

"I think when New Zealanders see that they will see value for money."

Labour leader Phil Goff criticised the payments as hundreds of public servants were losing their jobs while the Government strove to make savings.

"It is appalling to think that someone is paid $2000 a day to be a political adviser while other decent hard working public servants, more than a 1000, have been thrown out of their jobs, have lost their livelihoods."

He contrasted the issue with ACC funding being pulled for a sexual abuse helpline.

"It shows where this government has put its priorities."

Mr Key said the government needed good advice.

"I think it's really important that the government get its decisions right and to do that we need to have a range of advice."

Mr English said the hourly rate was about a third of what the government paid for a top lawyer.

Mr Goff did not think it was reasonable.

"It's a very high price to pay for a former ACT candidate to give advice that's entirely predictable...

"For a lot of people on Struggle St in New Zealand, the battlers, to think that $2000 a day is below the commercial rate they would be outraged by that."

Asked about Treasury Secretary John Whitehead reportedly questioning how the relationship with the adviser would work Mr Key said: "I am satisfied as Prime Minister that they well and truly provided value for money".

Mr English responded: "A bit of healthy tension is good. Treasury's had a change in government, a change in economic outlook and we are having plenty of debate."

Mr Goff said Mr Whitehead's concerns showed the unusual situation where the government was making departments pay for advisers, rather than using Treasury staff or paying for advisers through ministerial services.

"It's outside the normal order of things," he said.

"It's a very unusual practice to have the departments pay for advisers that are political appointments."

- NZPA