State Services Minister Tony Ryall says the country needs to pay chief executives in the public service top dollar if the service is to compete with the private sector.
The Labour Party leader Phil Goff says if Labour comes to power it would cap pay for chief executives in the public sector at the same level as the Prime Minister's salary.
The Prime Minister is paid $393,000 a year but 16 chief executives in the state sector get paid significantly more.
State Services Minister, Tony Ryall, says the state needs to make sure it attracts good quality executives, and if salaries were cut it would have a domino effect throughout the rest of the public sector.
Business New Zealand chief executive Phil O'Reilly says it's not fair to compare the pay of public service bosses with politicians.
He says the Prime Minister is a politician who is there for reasons other than for money and a career, whereas public service staff deserve to be fairly remunerated.
Mr O'Reilly says debating the pay of few dozen chief executives is a sideshow to the vital debate about how to lift the country's economic performance.