Thursday, July 08, 2021

"It's not about austerity"

Back in May, the government imposed a three year pay freeze on the public service - you know, the people who literally saved our lives and worked overtime to stand up a Covid response in an instant that kept (most of us) alive and employed. After a pile of OIA requests (and a dubious-looking extension that in retrospect appears to have been largely about dragging things out so they could do a proactive release), they've now released some of the related policy advice. Naturally, in the spirit of the "most transparent government ever", they've done this on a page of "advice seen by our Minister", most of which is unlinked document titles, with no announcement and only OIA requesters receiving a list of what is relevant (example). Its not quite a locked filing cabinet in a disused lavatory with a "beware of the leopard" sign, but its pretty much the digital equivalent.

What does the advice say? Its difficult to tell, because so much of the early documents are heavily redacted (yes, I'll be challenging that). But when you get to Chris Hipkins' oral item for Cabinet from March, he actually has to come clean and make a case. And what does he open with?

Following COVID, our fiscal position will require careful management for a considerable period.
But, he goes on, "It’s not about austerity". its just about "managing wage growth in an environment of pay restraint". Which is another way of saying "austerity".

The later Cabinet Paper describes the policy context like this, which makes it pretty clear what has driven this decision:


[Note: screenshot edited to remove a badly-placed page break]

But remember, "It’s not about austerity". Yeah, right.

The Cabinet paper also notes their "consultation" arrangements. The Public Service Commissioner sought feedback from 143 government agencies, the CTU and six key public sector unions. Somewhat surprisingly, given the broad application of the pay freeze, the latter did not include the NZNO, PPTA, or NZEI, who represent the largest public sector workforces (see diagram on p9 here). I guess that's an example of TKM-PSC's "from the centre" blinkers, but in this case it seems to have bitten them very badly in the arse.

Update: Actually, this bit from one of the early documents is a bit more honest about why Labour is doing this:

In the longer run, further pay restraint will be one of several potential levers to support a return to a sustainable fiscal position. Exercising pay restraint will reduce the need to rely on other levers such as revenue increases or spending reductions.
You got that? They're freezing (meaning cutting, after inflation) public sector wages, so that they don't have to raise taxes on the rich. Why are they called a "Labour" party again?