Mayors and councillors around the country should soon be able to take official pay cuts. Photo / Mark Mitchell.
Mayors and councillors around the country should soon be able to take official pay cuts. Photo / Mark Mitchell.
The Remuneration Authority says temporary pay cuts for the likes of mayors and councillors will only apply to those earning more than $100,000 a year.
The Government is introducing legislation today that will enable the Remuneration Authority to make temporary reductions to the salaries of elected politicians and senior public officials.
In April, Prime Minister Jacinda Ardern announced that all ministers would take a 20 per cent pay cut for six months in light of the economic fallout from Covid-19.
But technically, none of them have the ability to reduce their pay, which is determined by the independent Remuneration Authority and set in legislation.
Under some public pressure and in the face of a campaign lobbying for pay cuts led by the Taxpayers' Union, many chose to donate to charity as a way around the rules to show solidarity with their constituents.
That move has raised some questions around transparency. For example, Wellington mayor Andy Foster has refused to disclose which charities he is giving his pay cut to describing the request for that information as "too intrusive".
Wellington City Council's chief people and culture officer Meredith Blackler also noted that if the payments were made directly to charities rather that through payroll, they would be more difficult to audit.
But State Services Minister Chris Hipkins said today the Remuneration Authority Act would be amended to allow the authority to temporarily decrease the pay of ministers as agreed by Cabinet in April.
"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 per cent for six months for a group of top public officials covered by the act, including MPs and elected local government members.
"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," he said.
The bill is expected to be passed on Friday.
State Services Minister Chris Hipkins says the Remuneration Authority Act will be amended to allow the Authority to temporarily decrease the pay of Ministers. Photo /Mark Mitchell.
Remuneration Authority chair Dame Fran Wilde emailed mayors and regional council chairs across the country following the Government's announcement this morning.
She said any temporary pay cut allowed in the legislation should only apply to elected members whose remuneration exceeded $100,000 per annum.
This would not be applied as an across-the-board cut, with a higher percentage deducted from the pay of top earners compared to those at the bottom end of the scale.
Any deduction would be for six months, Wilde said.
There are 78 local councils in New Zealand and what elected members get paid varies greatly from more than $290,000 a year on the top end to just $2000 for some rural community board members.
Local government elected members do not receive superannuation, sick leave, holiday pay or transition pay at the conclusion of their term.
Local Government New Zealand president Dave Cull said elected members' pay by in large was quite modest, and was mindful many wouldn't even be in minimum wage.
"It wouldn't be fair to inflict hardship upon them or their families.
"The workload for many elected members has only grown since the lockdown started, as they are actively involved in their local CDEM teams, community support groups, and obviously their own council as they work through issues in their communities and regions on a daily basis."
Wilde sad she was aware many local government elected members have donated to charity during the Covid-19 lockdown.
"We will take this into account if we have had advice from an elected member on the amount of any donation when deciding on an appropriate temporary reduction for each position."
