Editorial: Stay away from empty promises

OPINION: In Government, Labour presided over a 48 per cent increase in the average salaries of public service chief executives, pushing the earnings of more than a dozen past the prime minister's salary of $393,000. In Opposition, Labour is calling for new state chief executives to be paid no more than the prime minister.

In government, it took nine years to increase the minimum wage by $5 a hour during an economic boom. In Opposition it wants the Government to increase it by $2.50 to $15 an hour in just 12 months, despite the fact unemployment is rising.

Do Labour's strategists think voters are stupid? Or do they just think they have short memories? This is populist, lowest common denominator politics that will do Labour no good in the long run.

There are sound reasons to closely scrutinise the salaries of state chief executives, just as there are sound reasons to closely scrutinise the salaries of SOE bosses. The $550,000 to $560,000 paid to the Government's chief financial adviser – the Treasury secretary – probably represents the market rate. The $260,000 to $270,000 paid to the head of the tiny Women's Affairs Ministry, on the other hand, seems high. So does the $560,000 to $570,000 paid to the head of the New Zealand Transport Agency. And so too does the $1 million paid to Meridian Energy's chief executive. How hard can it be to produce power when the hydro lakes are full and to call for savings campaigns when they run dry?

However, the salaries of senior public servants should be determined by their responsibilities and performance, not by slogans. And scrutiny should occur on an ongoing basis, not just when Labour needs a headline. The benchmarks for most of the salaries Labour is complaining about were set when it was in office. It did little to constrain salary increases then and is in no position now to criticise a Government that has stopped further increases in the total amount paid to public service bosses.

Similarly, there are reasons to constantly review the minimum wage, as Labour did when it was last in office. It provides vulnerable workers with a measure of protection from unscrupulous employers. But, if there is a time to dramatically increase the minimum wage, it is not when the world is tentatively emerging from the worst financial crisis since the Great Depression. Doing so would benefit some workers but cost others, in marginal enterprises, their jobs and deny yet others a chance to enter the workforce.

The new Labour initiatives unveiled by leader Phil Goff this week have been dreamt up around a barbecue by political strategists with polls, not policy, in mind. Labour knew better when it was in office. It should not pretend otherwise in Opposition.

Its MPs did the right thing when they reconfirmed Mr Goff and Annette King as leader and deputy. They had few alternatives, and change for change's sake would only have made the party look more desperate. But Labour will not make up lost ground until it reconnects with the voters it lost touch with in office. Promising things no party can deliver is not the way to do that.

- © Fairfax NZ News

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kevin   #3   03:16 pm Feb 01 2010

The unemployment rate has no bearing on the mimimum wage. If this was he case, then we would have had little to no unemployment in the 1990's and high unemployment in the first decade of this century. If there is a relation, the I would like the editior to cite a reference in stead of talking through a hole in his head.

jpwood   #2   01:37 pm Feb 01 2010

How many Fairfax employees are on less than $15 an hour? This stinks of vested interests to me.

Bruce   #1   11:37 am Feb 01 2010

Two points, making an issue of the high salaries some receive (and which are public knowledge), is a shot across the bows of plans to focus tax cuts on the top income earners. Similarly, there are hundreds of thousands of people on less than $15 an hour. Every single one earns less than some top income earners will receive if tax cuts proposed by some are enacted. This speaks to the theme of the Labour leaders speech, the interests of the many, not the interests of the few. Phil Goff is boldly going where Labour leaders have always gone, to the people for a mandate to act in their best interests if the Tory PM will not.

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