Bosses' pay rises cause problems

Last year the average Kiwi wage earner collected about $50,000, roughly the same as the pay rise for Auckland University's vice-chancellor, Hawke's Bay's Eastern Institute of Technology's chief executive, and Taranaki's Western Institute of Technology boss.

The heads of Wellington's Victoria University and Whakatane's Wananga o Awanuiarangi had rises around $40,000. While the figures are not exact, and can reflect added responsibility or outstanding performance, they jar with the lower paid in the sector.

"It's problematic for us when you're going into bargaining and you're dealing with employers and managers who have had significant increases," Tertiary Education Union national secretary Sharn Riggs says. "The greater differential between the lowest and highest paid creates problems in terms of equity – and that's across the country."

A Sunday Star-Times survey of 25 tertiary institutions comparing 2010 and 2011 pay, found increases of up to $50,000 at 13 sites, freezes or smaller increases for the heads of seven institutions, and cuts for five.

Down the chain, the sector is paying increasing numbers of employees more than $100,000 a year. Between 2009 and 2010 the number jumped 13 per cent from 4240 to 4800, after a 21 per cent increase the year before.

The union has long argued New Zealand's rates lag behind those overseas, and as the latest round of collective bargaining starts this month, Riggs insists Kiwi academics need more.

"Our experience, certainly since the global financial crisis, is that our pay increases haven't been even with inflation, so that's been a pay cut for most members," Riggs says. "Internationally, we're not comparing, and that's problematic in terms of being able to attract qualified international academics here."

But a report prepared for Universities New Zealand by consultants Deloitte concludes that while local academics are lower-paid than their foreign counterparts, they are catching up.

At all four university academic levels covered by the report, rates lagged behind Australia, Canada, the United States and the United Kingdom. But New Zealand salaries had increased by rates of 18 and 19 per cent while in Australia, increases were only 7 and 8 per cent, and in the US, just 3 and 4 per cent. Only Canada, with 21 and 22 per cent increases, outstripped New Zealand.

The report noted problems comparing salary growth between countries, but those problems did not prevent what it called a "robust summary" of differences.

Riggs is unconvinced."You're not comparing apples with apples. In Australia you've got to factor in a significant superannuation component that's part of the package for all staff."

She said Australian claims were returning "significantly higher" salaries than in New Zealand. "The gap isn't decreasing, we get calls from people overseas wanting to know the rates and there is an intake of breath."

Tertiary Education Minister Steven Joyce said institutions were responsible for their own organisations, including pay, and agreed the rates reflected international competition to recruit and retain quality staff. "It's also that many are delivering more courses at higher levels each year, which requires higher skill levels. That's a good thing, but it can involve higher costs."

Joyce, who is is planning a review of university councils that's tipped to push for a more corporate model, warned that all institutions should "reflect on and factor in" tough economic times, and course affordability for students.

The State Services Commission has just completed a separate review of the Cabinet Fees Framework, which applies rules around the pay for university council members. Cabinet has yet to sign off but State Services Commissioner Iain Rennie said there seemed little need for board level pay at tertiary institutions to be treated differently from other state sector boards, as it currently was.

Riggs fears both moves will mean a more active hand in the operations of independent tertiary institutions. "There is an indication the commission, and by virtue of that, the Government, wants more control over bargaining. What's problematic is that pay control has come in at the lower levels rather than at the other end, where there seems little control."




Auckland University $600,000 to $650,000

Massey University $510,000 to $540,000

Canterbury University $500,000 to $510,000

Victoria University $480,000 to $520,000

Lincoln University $380,000 to $400,000



Otago University  $560,000 to $550,000

Manukau Inst of Tech $330,000 down to $320,000

Otago Polytech $340,000 down to $300,000

Bay of Plenty Polytech $250,000 down to $220,000

Te Wananga o Raukawa $200,000 down to $190,000

SOURCE: State Services Commission. Figures compare 2009-10 with 2010-11.

Sunday Star Times