The Government’s sweeping changes to the pay equity scheme have provided a massive infusion into Budget 2025, to the tune of $12.8 billion over the next four years.
Finance Minister Nicola Willis said “savings” had been made as a result and that the regime first launched under the previous government had become unwieldy.
“Significant Budget savings have resulted from fixing Labour’s flawed pay-equity regime and removing an assumption that the Government would fully fund potential settlements involving non-Government employers,” she said.
“Taken together, these changes have increased the funding available for Budget 2025 by $11 billion operating over the forecast period and an additional $1.8 billion allocated for capital investment.
“This funding has been redirected to support investments in frontline health, education and other government services.
“The Government has kept funding in contingency to settle future pay equity claims that we anticipate will be raised by government employees.
“Other potential pay equity costs will be considered as part of the normal Budget process. Future pay-equity settlements will only be awarded where pay discrepancies are proven to be the result of sex-based discrimination.”
John Campbell and Nicola Willis clash over govt payments, pay equity – watch on TVNZ+
Willis refused to release the contingency figures involved, saying withholding them was consistent with Treasury advice because the information was commercially sensitive.
Labour: $11 billion should be lifting women’s pay
The Opposition seized on the issue immediately after the release of the Budget.
Labour leader Chris Hipkins said: “The Government has taken $11 billion that should be lifting women’s pay and used it to make its Budget add up.”
Hipkins has been hammering the Government over the changes in the past several weeks, which were passed under urgency and raised the threshold to make a claim.
Asked during a media conference whether ACT leader David Seymour was correct in saying the changes “saved the Budget”, she said there were “trade-offs and choices”.
“Without this reform, we would not be able, in this Budget to be putting the extra money into health, to be putting extra money into learning support, to be putting in more resources for our police,” the Finance Minister said.
“There are trade-offs and there are choices. I stand by the fact that women and women in this economy are going to be getting pay rises under this Government into the future”.
PSA: Kiwi women are paying for this Budget
But Public Service Association national secretary Fleur Fitzsimons said following Willis’ announcement that the $12.8 billion figure “saved” was a betrayal to workers.
“This is a Budget paid for by taking money from care and support workers — $60 million a week — taken from library assistants, social workers and others who had expected pay equity settlements that would see them be paid what they are worth,” she said.
“This is the wage theft Budget.
“The Government promised to tackle the cost of living — how does taking billions of dollars from the pay of so many underpaid women help them balance their own budgets? It’s just another broken promise, and Kiwi women are paying for this.
“We call on the Government to do what’s fair — sit down with workers, unions, employers and pay equity experts in a proper select committee process and come up with a new framework that can work better for all. This is how a democracy is supposed to operate.”