Graham Adams: The politics of envy or the politics of fairness?

It was just a month ago that the chief executive of Rotorua Lakes Council, Geoff Williams, described suggestions his executive team should consider taking pay cuts as “immoral”.

Williams told the NZ Herald: “I am very fortunate to have around me an extremely committed, dedicated and hardworking executive team who are now working even harder as a result of the current situation… To expect them to take a pay cut now, simply because they work in local government, is immoral in my view.”

It seems unlikely that the CEO’s words will age any better than Marie Antoinette’s views on the virtues of cake. A month later, his stance already seems like a relic of a world that has vanished along with overseas travel, packed nightclubs and handshakes.

Fortunately, he didn’t quote the mantra beloved of managers everywhere: “If you pay peanuts, you get monkeys.” Of course, that self-serving rationale for inflated pay has never been extended to lesser mortals — presumably the monkeys — in the workforce. That may change, of course, as the Covid-19 pandemic has given many of us a better appreciation of the essential role the poorer-paid — including nurses, rubbish collectors and checkout operators — play in keeping the economy functioning.

The Herald reported that Williams’ pay was set at $374,721 a year and comes with a vehicle allowance of $15,650. Furthermore, it reported that, as of last year, eight council employees earned $200,000 or more, including Williams.

Perhaps he isn’t aware that morality is never absolute. It changes with circumstance, and circumstances for a vast number of New Zealanders have changed dramatically for the worse. It should have been obvious to anyone months ago that a big chunk of the population would soon have no work, or very precarious work, or work but with reduced wages. Consequently, what might have been dismissed previously as the “politics of envy” certainly can’t be passed off quite so glibly now. After all, as we have been repeatedly reminded: “We’re all in this together.”

Williams, however, isn’t the only one who is cloth-eared with regard to a well-upholstered existence. Last week, our MPs decided to give the Remuneration Authority the power to reduce their pay (as well as that of many other public sector employees) by up to 20 per cent for up to six months. However, it avoided debate over whether to make cuts compulsory and transparent for MPs, as proposed by Act’s leader, David Seymour.

Labour’s Damien O’Connor said the government’s position was that the authority should have the ability to “consider individual circumstances in each case” — which presumably means MPs will be able to opt out. And, according to Seymour, we won’t even be officially told who accepted or who declined to share in the nation’s pain — unless, heaven forbid, there is a leak from the Remuneration Authority.

NZ First’s Tracey Martin — while acknowledging that the sums saved would be small compared to government spending — put the moral case: “It is pointless taking time for [Parliament] to go backward and forward and backward and forward about what we as politicians know to be true: that New Zealanders are going to be hurting and we should actually take a cut, too.”

Quite. The parliamentary debate took place just before we learned that nearly 39,000 people had newly accessed the unemployment benefit during the lockdown month of April. Almost half (46 per cent) had little or no prior experience of being on a benefit, compared to 26 per cent of new applicants last year.

David Seymour was forthright about the need for MPs to make the cuts compulsory and transparent to set an example to other public sector employees: “It is absolutely right and proper that at a time when people across the New Zealand economy — or at least the private sector — are taking 10, 15, 20, in some cases up to 70 per cent reductions in pay, that Parliament should be at least somewhat making its own contribution and showing its own leadership.

“In the private sector, people aren’t taking voluntary pay cuts as proposed in this bill — they are taking mandatory pay cuts. If we are to show leadership, we should be doing it the way the private sector up and down this country is.”

What is obvious is that employment is now dividing itself along fault lines — on one side the self-employed and those working in often precarious private-sector industries are looking resentfully across the divide to those organisations supported by taxpayers and ratepayers.

People are increasingly aware that if you have risked everything to set up a business and employ people (and were quite likely obliged to let the bank hold your house as security for a business loan) you may well be in real financial strife but if you work in the public service and risked nothing you’re probably a whole lot safer. And a lot better paid.

The managerial revolution of the 1980s introduced business models and methods of management to the public service, universities and hospitals. As a result, it began offering huge salaries to the managerial class, with its upper echelons operating as a transient, global and over-paid elite. The notion of entering public service to serve the public at lower rates of pay now seems distinctly quaint.

And so we have the vice-chancellor of Auckland University earning $755,000 (for running the 179th best university in the world, according to the 2020 Times Higher Education World Rankings); the chief executive of Auckland’s District Health Board is on $667,000, and 86 Auckland Council employees rake in more than $250,000 each.

The Auckland Ratepayers’ Alliance, which has mounted a public campaign to publicise just how much senior council staff earn, claims seven of them earn more than Prime Minister Jacinda Ardern’s salary of $471,000.

The Prime Minister garnered a lot of praise after she announced in mid-April that she, her cabinet ministers and 34 heads of government departments would take a pay cut of 20 per cent over the next six months (which is, of course, equivalent to a 10 per cent annual cut).

The news travelled and Piers Morgan, the host of Good Morning Britain, was deeply impressed. On April 16, he praised Ardern for taking a reduction. But what he didn’t mention is that even after a 20 per cent cut, Ardern will still be earning substantially more than many world leaders, including his own Prime Minister.

Boris Johnson earns £158,754, or $NZ323,000, while Ardern’s normal pay is $471,049. And even with a 20 per cent cut for six months, she will still earn $423,945 annually. In other words, after her six months of voluntary sacrifice, New Zealand’s Prime Minister, who governs a nation of barely 5 million, will earn $NZ100,000 more than the PM of a nation with 60 million inhabitants, an economy of more than $NZ4.5 trillion, and one that is nuclear armed to boot.

For unfathomable reasons, New Zealanders have allowed the prime minister of a tiny nation at the bottom of the South Pacific to sit among the highest paid in the world, despite the country having a relatively low per capita GDP.

What is even more extraordinary, however, is that the head of the Department of the Prime Minister and Cabinet makes substantially more than her with a salary of $603,000. If that doesn’t convince people that public sector bloat needs serious deflating, it’s hard to imagine what would.

In fact, there are very good grounds to make the temporary cuts to the salary we pay our Prime Minister, government ministers and public service chief executives not only permanent but much deeper as well, along with cutting the salaries of highly paid council staff in a similar fashion.

After all, as we have also been told repeatedly — we’re a team of five million now and everyone has to make sacrifices.

At the very least, the Prime Minister’s pay should mark the high point of public sector salaries. Certainly, if anyone in public service has earned their salary over the past two months and carried the most crushing burden of responsibility it is her. It would be very difficult for any CEO to argue they deserved more.

How then in such circumstances can the head of the Accident Compensation Corporation justify being paid $841,000? Or the CEO of the Housing New Zealand Corporation $791,000?

Or, for that matter, the Vice-Chancellor of Otago University earning $644,000 — for running an institution that has been ranked somewhere between the 201st and 250th best university in the world?

Graham Adams is a journalist, columnist and reviewer who has written for many of the country’s media outlets including Metro, North & South, Noted, The Spinoff and Newsroom

This article can be republished under a Creative Commons CC BY-ND 4.0  license. Attributions should include a link to the Democracy Project.  

 

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