Editorial: Overpaid elite still raising ugly head

OPINION: The world economy seems to be inching toward recovery after several governments – notably those in Britain and the United States – bailed out banks, other institutions, even car makers, using billions of taxpayer dollars and heavy borrowings to keep depression at bay.

They might have stopped the rot. Hints at an upturn are evident here, too, though the wise caution against unbridled optimism that the worst is over. More job losses are expected, any export-led recovery is being stubbornly resisted by a rising dollar, and business sentiment remains subdued.

Little wonder that those who have lost savings, jobs, even hope, in the past 18 months rail at news that some of those involved in precipitating planet-wide recession – and yet to repay taxpayers for rescuing their business – are again paying themselves obscene salaries and bonuses.

Britain's Prime Minister, Gordon Brown, and United States President Barack Obama are talking publicly about capping pay rates. In the US, the very suggestion has infuriated Wall St, where defenders of the corporate faith argue that top-flight executives must be paid squillions so that they remain with the companies that nearly went broke, to help them earn enough to reimburse taxpayers for their involuntary largesse.

Though such rescues were not necessary here, the straitened times that the economic crisis has imposed on New Zealand mean job losses here are now common, tightened belts make it hard to inhale, and carefree spending has all but ended. Unsurprising, then, that Kiwis on the average wage of $48,000 are as incensed as their overseas counterparts to find that some chief executives still rake in packages that resemble cell-phone numbers. They are even unhappier when the recipients head government agencies, in which the finance minister nominally represents the public as shareholders.

Annual reports from TVNZ and Niwa, for example, reveal that chief executives of both received handsome bonuses and pay rises in the previous 12 months. The pay of Niwa's John Morgan rose by about $70,000, of TVNZ's Rick Ellis by $110,000. And his is not the only thumping rise at the so-called state broadcaster.

Most private-sector chief executives also enjoyed pay rises last year, though in recent months, Fletcher Challenge's Jonathan Ling refused his bonus, and wages were frozen at both Contact Energy and Air New Zealand, where chief executive Rob Fyfe took a 20 per cent pay cut.

Senior state servants have now been told to show restraint in this tougher climate, and state-owned enterprise chairs reminded of what taxpayers expect of them.

Though the state agencies' pay rises, plus bonuses, now being reported were earned in an earlier period, the public perception persists that those at the top still have well-upholstered pay packets while those of resentful underlings grow threadbare.

Call it the "politics of envy" – and the well-paid do. But Kiwis who are being lectured by a winged finance minister that everyone must shoulder their share of the recessionary burden want those at the top – in politics as well as in business and the bureaucracy – to lead by example, not mouth Obama-like rhetoric that sounds fine, but looks hypocritical.