Prime Minister John Key has again called for restraint in state sector pay negotiations but says he is not imposing a pay freeze.
Mr Key says public servants have the advantage of job security over workers in the private sector where job losses are more common.
He says job losses are rising in the private sector, but will not comment specifically on more recent Treasury predictions that the unemployment rate could go higher than its earlier worst-case scenario of 7.5%.
He says other forecasters have different views, such as BERL, which said recently unemployment was unlikely to exceed 6%, and all the Government can do is focus on making sure it is stimulating the economy as much as possible.
Mr Key says as the private sector is hit harder by recession those workers in the state sector have to play their part.
"The Government's expectation is that any pay round that will occur in the next 12 to 18 months is likely to be at a very low level, but it is not true to say there will be a pay freeze."
Mr Key says pay increases that have already been negotiated as part of two or three-year deals will go ahead.
Labour Party leader Phil Goff says the Government is adopting double standards - paying its spin doctors much more than their predecessors but telling doctors, teachers and police officers they should get no increase.
Mr Goff says clearly the economic situation will influence pay negotiations but the Government should not be interfering.