Days of zero pay rises should be over - English

TRACY WATKINS
Last updated 13:40 29/01/2014
FAIRFAX NZ

Prime minister John Key comments on the 2014 budget and paid parental leave.

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Finance Minister Bill English has backed workers' expectations of a pay rise after years of belt tightening, saying they are entitled to expect a share in the economic recovery.

Speaking after announcing a May 15 budget date today, English said his sixth budget would be "predictable" but would shift the focus to managing a growing economy, rather than managing a recession.

That meant "being reasonably careful with our spending" but there would also be opportunities "to spread some of the benefits of growth".

Asked if that might include tax cuts, English said that had not been considered but later suggested that workers were entitled to think their bosses would come to the party with pay rises.

"I think a lot of households will be looking for benefits through more job security, which they haven't had [and] through pay rises, which households haven't had much of through the last three or four years," he said.

"So yeah, they have a right to expect to see some of the benefits."

English said workers could see the signs of an improving economy around them and there were a lot of workplaces where "the staff gave away their over-time and in fact in a lot of cases they took pay cuts or worked less hours".

"Now over the last year or two that's been gradually working out of the system but I think there's going to be an expectation, particularly for those people with skills that are in demand, that they will be doing better than zero pay increases."

He would not put a figure to those expectations but said businesses would find that if they wanted to keep skilled people and be attractive places to work "then increased pay is going to be part of that package".

Asked if that would be of much cheer to households still struggling with debt and bills, English said helping business succeed was a durable solution.

"The Government isn't going to go splashing cash around," he said.

"The best thing we can do for a lot of these households is continue to support a business environment that means their work place is going to succeed, so any extra cash they get is through their pay, rather than a government subsidy system."

Prime Minister John Key said the budget would demonstrate responsible economic management "but we're out of the days where there's no money".

"That dominated the first four budgets but it also got New Zealand back into surplus."

Key said the public could expect to see some money spent in the Budget but not "a dramatic change, this isn't going to be a lolly scramble".

"We've never believed we can bribe the New Zealand public voting wise - we think we've got to encourage them to vote for us on the basis of our track record and the responsible way we manage things."

He would not confirm whether an extension to paid parental leave would be in the budget.

"It could be, we haven't finalised that decision. There's been lots of discussion and analysis going on. I can't rule that it wouldn't be."

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