Bad faith, or explaining realities

Finance Minister Bill English has bluntly warned teachers, nurses and other state sector workers that they cannot expect pay rises unless these are matched by productivity gains, writes The Press in an editorial.

His comment was not made lightly or off the cuff, as it was in response to a patsy question in Parliament from a National back-bencher. English clearly intended to advise public sector workers, and he pointedly used nurses and teachers as examples, that their days of hefty pay increases are over.

This warning drew a predictable response from the teacher and nursing unions. English was accused of acting in bad faith by telling workers to expect little or nothing so many months ahead of the next round of contract negotiations. Technically, it is probably correct that this was not a case of acting in good faith.

It is also true that it is unusual for a finance minister to enter the industrial bargaining arena, at least in such a public way. But English's remarks are still justified by the fact that these are unusual times.

Most employees in the health and education sectors have received generous pay rises over recent years. Nurses got a 4 per cent increase in March, above the 3 per cent inflation rate, and senior doctors recently received a 4.2 per cent rise, with both deals settled before National took office. And both primary and secondary teachers have had 4 per cent pay rises in each of the last three years.

This is a stark contrast to the private sector, where some workers are, at best, getting minimal pay increases and many have had to settle for nothing extra this year.

Each week, as well, company failures and cutbacks have made more workers redundant. This is not the case for doctors, nurses and teachers, who must have one of the highest levels of job security in the country.

Nor can it be argued at present that significant pay rises are needed to retain and recruit workers. Due to the recession many former nurses, for example, have returned to hospital wards and younger people have been encouraged to enter nursing because they regard it as providing a secure job.

English's comments were also consistent with other tough action taken by the Government in response to the recession. All working New Zealanders were hit in the pocket when next year's promised tax cuts were canned.

Government departments have been told to find savings and, despite the new administration saying that it would cap, rather than cut, the number of state servants, the growing number of redundancies suggests there will be an overall reduction in the bureaucracy.

Earlier this week the Social Development Ministry confirmed that 558 workers would be affected by restructuring. Although some might find other jobs within the ministry, as it shifts resources to the front line, it is still expected there will be around 200 redundancies.

At the same time, state-owned enterprises have been told to lift their performance and find ways to increase productivity.

And, after signing up to New Zealand Superannuation when in Opposition, the Government has slashed contributions to the fund this year and scheduled no more payments into it at all for more than a decade.

In this climate of austerity, English's warning to nurses and teachers about their next wage rounds in 2010 was entirely appropriate, even if the message might sound a bit rich coming from a finance minister who himself was awarded a 4.5 per cent wage rise last year.

But earlier this year politicians, sensing the public distaste for them being given high pay increases during tight economic times, did unanimously urge the Remuneration Authority to freeze their salaries.

Following his comments, English was accused of being insulting to nurses, but given the economic climate this is nonsensical. New Zealanders do acknowledge the demanding work and professionalism of nurses and, for that matter, of teachers.

But it would actually be insulting to those battling to survive with no wage rise or even no job if workers with safe berths in the health or education sectors were to put their hands up for the same level of pay increase they have recently enjoyed.

The Press