4 Mar 2015

Recruiter says salary link to PM flawed

10:44 am on 4 March 2015

Any cap on the pay of senior executives in the public service should be linked to the market, not to the prime minister's salary, a recruitment specialist says.

Following the Government's move to change the law to reduce MPs' salary increases, Labour Party leader Andrew Little has called for cuts to top public sector salaries.

Labour's policy has, in the past, capped those salaries at the level of the prime minister's.

Director of H2R Consulting, Jane Walker said that could drive down other levels of pay, and she questioned the idea of using the prime minister's salary as a benchmark.

"Rather than having a sort of blanket policy on linking to a particular salary cap, I would suggest there be more emphasis put on the size of the role, the nature of the role, the responsibilities and link that to the market sector."

An advocacy group, Income Equality Aotearoa New Zealand, earlier said it hoped interest in cutting back the salaries of high-earning chief executives would catch on after the Government's move on MP pay, and calls to limit executive salaries in the public sector.

National secretary Peter Malcolm said that about 25 years ago, backbench MPs got about the same pay as secondary school heads of departments, whereas today they earn about double that.

He went on to note a shift in thinking, with local authorities moving to rein in pay for chief executives.

Mr Malcolm said many of them were starting to realise their top people were being paid far too much, and they were starting to do something about it.

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