The Government will spend more than $130 million on a student support package, which aims to assist financially embattled students dealing with the Covid-19 pandemic.
Prime Minister Jacinda Ardern is set to take a $45,000 pay cut over the next six months as leading public sector bosses will have their salaries reduced by 20 per cent.
Ardern said the six-month, 20 per cent pay cuts would apply to all 25 Government ministers and to 34 Government department chief executives.
This included Dr Ashley Bloomfield, the director-general of Health, who was set to earn $528,000 in the current year, and so was now in line for an about $52,800 pay cut right at the time he's never been busier.
Ardern's annual salary is set at $459,739, meaning a 20 per cent reduction over six months would see her sacrifice $45,573 to earn $414,166.
The 34 Government department heads were paid an average $478,000 in the last financial year and so would be in line for an average $47,800 reduction, resulting in about $1.6 million in savings.
"While this cut in itself won't shift the Government's overall fiscal position, it is an acknowledgement that every person and organisation has a part to play as we unite to stamp out Covid-19 and save lives."
Prime Minister Jacinda Ardern says all Government Ministers and leading public sector bosses would take pay cuts. Photo / Getty
Deputy PM Winston Peters' $326,697 salary would now be cut by $31,670 to $295,027.
The Government's senior politicians, the Cabinet ministers, get $288,900 each year and now faced a $28,890 pay cut to $260,010.
Prime Minister Jacinda Ardern said the cut would apply to all Ministers in her Government.
However, Opposition leader Simon Bridges has also stated he will take the pay cut, seeing his $288,900 salary drop $28,890 to $260,010.
The base salary for any Member of Parliament sits at 160,024. Should they also take a 20 per cent salary cut over six months, it would drop their salary by $16,002 to $144,022.
However, the salaries of MPs from opposition parties were overseen by the Remuneration Authority rather than the Prime Minister.
ACT Leader David Seymour called for the temporary pay cut to be extended to all MPs but acknowledged it was not the role of the Prime Minister to cut the salaries of opposition parties holding her policies to account.
"That's why it's vital that Parliament itself passes my legislation, which will cut the salaries of all MPs by 20 per cent, as soon as it resumes," he said.
"I have drafted legislation and I'm in the process of consulting with other political parties."
Seymour had earlier called for the pay cut in mid-March in solidarity with ordinary Kiwis at a time when more than 40 per cent of workers were now receiving support from the Government's wage subsidy.
The State Services Commission said 34 Government chief executives would be affected by the pay cut, including Dr Ashley Bloomfield, the director-general of Health, who has been widely praised for his calm and professional handling of the Covid-19 outbreak.
In the SSC's 2019 Pay Report, Dr Bloomfield was set to receive $528,000 in the latest pay year. A six-month, 20 per cent cut on that salary would see him sacrifice $52,800.
In the year ending June 2019, the Government department bosses were paid an average $478,000. Based on the average wage, the six-month pay cut would equate to a $47,800 salary reduction each.
Totalled across the 34 department heads, it would equal $1.625 million.
Solicitor General Una Jagose QC and SSC chief executive Peter Hughes were paid by the Remuneration Authority and so were not covered by the Prime Minister's announcement.
However, Hughes said in a statement he had also committed to accepting the same pay cut.
He said many New Zealanders and their families were facing unemployment and tough economic times in the months ahead, and it was appropriate the public service tightened its belt.
However, frontline public service workers would not be asked to follow in the footsteps of their bosses and take pay cuts, Minister for State Services Chris Hipkins said.
"We don't want people on low and middle incomes to bear the brunt," he said.
"They make up a huge part of our essential workforce. We need to sustain public-sector jobs and ensure services continue to be delivered."
Greens co-leader Shaw said his Ministers had agreed to the cut to show solidarity with the community.
"We would like to make it clear that the Green Party have long had a policy that pegs the pay of parliamentary wages to the median wage," he said.
"This means that no matter the circumstance, through the good and the bad, our pay reflects what is being experienced in the community. We do not think that pay should be pegged to the mood of the Parliament of the day."
"This isn't about pay cuts at the front line. We don't want people on low and middle incomes to bear the brunt,"
"They make up a huge part of our essential workforce. We need to sustain public sector jobs and ensure services continue to be delivered.
PAY CUTS BY THE NUMBERS
• About $2.4m in expected savings, including about $800,000 salary sacrifice by Government Ministers and $1.6m from Government department heads.
