Idiocy
NZPA report:
Public service chief executives should never be paid more than the prime minister, Labour Party leader Phil Goff said today, announcing the new policy in a speech in Hamilton.
I’m not sure if he is trying to get John Key a pay rise, or what he intends, but this is simplistic drivel.
You pay the salary necessary to get someone who can do the job well. For small agencies this may mean $150,000 or so, but for the Governor of the Reserve Bank it may well mean more than the PM. The Governor’s competence has a huge impact on the economy, and frankly the consequences on the economy make the $50,000 or so Goff wants to save pail into insignificance.
The PM is of course underpaid for the complexity and importance of the role. But people don’t seek it for the money. Hence it is appropriate the role is not paid at full market rates. If you applied that to political jobs,then the US President should be on around $50 million a year!
If Goff’s idiocy ever did become law, the inevitable consequence would be massive pay increases for the PM, if his or her salary becomes the top permissible in the public sector.
Personally I do think pay rates in the public sector senior ranks are generally too high – they actually exceed the private sector, without the risk that top execs face. But a blanket maximum is a stupid way to go.
Take the Solicitor-General. That’s a pretty important constitutional job. Now many partners in law firms can earn over $500,000 a year. The Solictor-General is paid $510,000 or so a year.
Is Phil Goff saying that the top lawyer for the NZ Government should be someone who isn’t even up to partner level in a top law firm? Does he want the Government to get beaten in court all the time?
January 28th, 2010 at 2:24 pm
I see Mr Goff’s big, bold economic policy is to put a cap on state sector chief executive salaries.
He may wish to note the following:
During the nine years of the last labour government, state sector chief executive salaries increased dramatically. The Secretary to the Treasury earned $330-339,000 pa in 1999. He earned $550-559,000 in 2009.
Grant Robertson seems to take a swipe at Mr Goff on the Red Alert website by highlighting that state sector chief executive salaries grew at twice the rate of inflation between 1997 and 2009. That is almost the entire period of the last Labour Government.
January 28th, 2010 at 2:26 pm
It’s also true, Mr Farrar, that in the US, the US President has the highest salary. The difference is that there is a very large cross over of senior private sector and public sector staff. Public sector experience is useful for a senior lawyer; they will forgo half their salary to do a couple of years in the public sector, and earn twice as much in the private sector two years later as a consequence of their public sector experience.
Not so in New Zealand.
January 28th, 2010 at 2:31 pm
How many MP’s are currently worth under 1$ million?
There’s a lot more to be gained from the job than the pay.
January 28th, 2010 at 2:41 pm
Aw DPF, Phil is just trying to bring every issue down to the level of his definition of the “ordinary New Zealander”. Generally that will mean he will be pandering to envy, selfishness and ignorance in his vain attempt to connect with the votes. He will miss of course because in general Kiwis are a bit smarter than he thinks.
January 28th, 2010 at 2:45 pm
Goof is a fool who is making policy on the hoof that is opportunist from for comfort and safety of opposition. Does this also apply to SOE’s? Next he will be wanting to cap all salaries.
Stupid fool. He just wants ordinary people to be the COEs.
January 28th, 2010 at 2:54 pm
DPF, I think you’ve nailed it… that Goff is thinking that he will be PM soon and is using reverse physiology to argue for a big pay rise. LOL
January 28th, 2010 at 2:59 pm
@NoCash – ‘reverse physiology’?? Sounds painful..
January 28th, 2010 at 3:06 pm
Hahaha my bad… “reverse psychology” that should be!
January 28th, 2010 at 3:09 pm
I thought it was more phil goff wanting to be big dog in the yard if he ever became pm
January 28th, 2010 at 3:13 pm
Even as a lefty I have to say this smells very much of desperate, populist BS.
January 28th, 2010 at 3:19 pm
Pathetic is what it is.
Is Phil forgetting that it was under his Labour party that government grew in record leaps and bounds to its current overly bloated state, pay packets and all?
I think Phil is making a large gamble that everyone forgets just how much of a party Labour had while in office. Like a bunch of teenagers drinking the liquor cabinet dry while the parents are out of town.
January 28th, 2010 at 3:19 pm
All this Labour shite that is being spewed on a daily basis is just a load of Bullshit…. It almost makes me wet my pants with laughter….
eszett, you state yoursefl as being a leftie, how is it that these Labour politicians forget so fast what they did in the past 9 years, they seem to forget very quickly.
What comes after being desperate?
Labour,go back to the basic basic blackboard and re look at your strategy, you are an embarressment to New Zealand and a vast number of your voters I would suggest…
January 28th, 2010 at 3:26 pm
For once, I think Phil is on to something here. In the free market, sure let shareholders (via the directors, via management) pay employees whatever they want. In the public sector, it is unelected officials giving away taxpayer money to unelected employees. It’s no surprise there is overcompensation, there are no disincentives and too many incentives. What Phil is actually proposing (perhaps clumsily, and maybe for the first time!) is some measure of responsibility with taxpayer money – why attack him for doing that?
January 28th, 2010 at 3:34 pm
New Leadership. I don’t think it will happen before 2011 as it is very unlikely that Labour will win that election. Nobody with aspirations wants to head into defeat in his/her first election. Phil Goff will probably lead Labour until then and step down on election night.
January 28th, 2010 at 4:20 pm
Phil’s a genius. Cut the CE’s pay to $100k and scale all their reports accordingly (as the reports need to earn less than the CE). This will massively lower the cost of the state sector. There will be a massive exodus of the capable and market competent and all organs of state will need to be shrunk to match the heavily reduced state size, now comprising only those so poorly equipped for the market that they couldnt get better jobs elsewhere. This wont matter as everything the government touches it screws up, so it will now touch much less of our lives, resulting in less screw ups. It’s a win win.
January 28th, 2010 at 4:31 pm
Well remember that this is a Labour person talking, there is no risk of being beaten in court because if you think you are going to be beaten you simply pass validations under urgency and hey presto – You win, they loose – eat that.
January 28th, 2010 at 4:33 pm
heh Can somebody access some stats on the public sector CEOs cf private sector CEOs for the 1990/99 vs 2000/08 periods.
Bet they would show the public sector CEOs pay rocketed against the private sector over the Socialists time.
Of course Flick will disavow any knowledge of any involvement just like Clark used to disavow any knowldege of Health when she was Minister is the late 80s.
Dolly did it
January 28th, 2010 at 4:41 pm
Is Phil forgetting that it was under his Labour party that government grew in record leaps and bounds to its current overly bloated state, pay packets and all?
Yeah, and funny how the Herald never remarked on that aspect. One eyed f’kn so called Journalists.
January 28th, 2010 at 4:42 pm
Yes, that’s right KiwiGreg, that’s just what Goff said. I enjoy getting stuck into MPs as much as the next guy, but if you need straw man arguments to try to make your point (especially against Phil) you are struggling.
January 28th, 2010 at 4:47 pm
Goff is just flying a kite for the final socialist solution he wants to force on NZ. A state where nobody earns too much and nobody earns too little, each according to their need and each according to their ability.
IE: Welfare for all.
January 28th, 2010 at 5:48 pm
this crap about CEO’s salary on the back of the outcry over the .25c pay increase for the minimum pay is pure Commie shit. Goof’s speech will be accepted by non thinking Labour supporters without question.
January 28th, 2010 at 5:53 pm
It does leave me with a very bitter taste that I’m being forced to help pay for huge salaries for peoples whose services I by and large do not use and whose intentions I find wrong. However I agree that I would rather have smart people wasting my money on doing unnecessary jobs efficiently rather than having an underqualified, incompetent person doing a bad job terribly.
It is very disturbing however that public servant pen pushers appear to be paid more than people in equivalent private sector jobs. I cannot understand how wellington has such a high average salary when you consider the size of the private economy down there.
Perhaps we should take Phill goffs perspective to mp’s… pay the average mp the average wage. Lets get sincere politicians in politics whose only desire is to make a difference (assuming that John Key is the only politician thats in it solely for the power).
January 28th, 2010 at 6:01 pm
So you’re saying, DPF, that the public service shouldn’t seek to employ CEOs who have any interest in actual public service (plus scrimping by on the $300,000+ the PM gets paid)?
I suspect that if departments were headed by people interested in giving back to the community, then those citizens who interacted with them might not be treated with such contempt so often.
And even if we do need to pay suitcases full of cash to get the very best CEOs, we’re failing in many cases. Does the name “Christina Rankin” ring any bells? “Mary Anne Thompson”? Need I go on?
January 28th, 2010 at 6:38 pm
$393000 and CEO’s up 86% in the last 10 years.
January 28th, 2010 at 6:49 pm
While I may not agree with Phil’s rule of thumb, how on earth did we end up paying long time public servant Geoff Dangerfield, who seems get more boring and characterless each year, over $500k for his retirement job at Transport!
January 28th, 2010 at 7:26 pm
I must say that one of the advantages of the Labour/Green outrage over the .25c increase is that those on the minimum wage are complaining how hard it is to raise their families.
Now, if I was a kiddie of these low paid people, and I was a free thinker, I would do all I could NOT to fuck around at school and make an effort to get an decent education, that is available by the way, and get out of the hole my parents are in.
My dad worked in the same place for 40 years with the war the only respite (if you can call it that). He was a Blacksmith, and mum only got a job once I had began school and I was looked after by my sisters, god bless them.
Even though I fkd around at school, unemployment was about 1500 (I think that’s right .. 1972-73) and I got a break and my natural good looks and street smarts got me through. How I don’t know. We had 3 kids under 3, 1 income, a mortgage about 18% and NO FUCKING WORKING FOR FAMILIES which is a reason I am so anti this tax payer rort.
January 28th, 2010 at 8:03 pm
This is another policy that would only be appreciated by those who are definately ‘left’. Is Phil seriously trying to lose in 2011?
January 28th, 2010 at 8:09 pm
Is the ‘Goff-proposal’ motivated by greed, fear or envy?
‘Greed’ in that he wants the money that the CEO’s deservedly earn (expertise DOES cost money),
‘Fear’ that he won’t be ‘top dog’ because he earns less than CEOs,
Or is it just plain old socialist-type ‘Envy’ of anybody that is perceived as being ‘better’ or ’superior’ (whatever those terms may mean to to a socialist),
Sadly, I suspect the latter is the true motivator. As socialists lie through their teeth (DL taught them very well by example), Phil of course won’t tell us his real reason – should we be surprised at that – or just cynical about his ‘pronouncements’?
Somehow, I suspect the latter course of action will be the right one.
(I know, we could always ask Trevor. . . )
January 28th, 2010 at 8:30 pm
“If I was the Prime Minister, nobody would be allowed to earn more than me.”
Isn’t that 3 year-old kindergarten talk?
Rather than capping salaries of a few top earners, thus saving a drop in the bucket, a more constructive policy would be to cap total state spending.
January 28th, 2010 at 8:53 pm
Why not stipulate that an MP’s salary shall be equal to their average taxable income in the immediately preceding three yeas, plus 10%, subject to a specified floor and cap.
A similar rule could be used for executives.
I think it is myth that you have to pay ridiculous money to get a competent CEO. Surely once you get over $200K you are looking at a pool of pretty talented people aren’t you?
January 28th, 2010 at 9:17 pm
I hate to think what NZ would be like if Labour had managed to fool enough people and get their precious elusive 4th term.
January 28th, 2010 at 9:29 pm
It seem the british unions have expanded on Goff suggestion
http://www.guardian.co.uk/business/2010/jan/27/executive-pay-bonuses-davos
I’d say it is hard to justify salaries at 20 times the minimum let alone 20 time the average. This doesn’t restrict incomes, just salaries if a person can generate wealth then I’m happy for them to get a return on their capital (through ownership as long as the person invests their own money to get the ownership)
January 28th, 2010 at 10:03 pm
Read this and puke:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10603391&pnum=2
Labour has NO credibility on this issue after locking in MASSIVE state sector pay rises five years ago.
January 28th, 2010 at 10:09 pm
I’m seeing a lot of potential here — how about National gazump Goff by saying he hasn’t gone far enough. How about capping MPs salaries (including the Leader of the Opposition) so they can’t earn better pay and condition than an entry level police constable, nurse or school teacher?
January 28th, 2010 at 10:11 pm
they actually exceed the private sector, without the risk that top execs face.?
What risk is this, is it the risk that the golden handshake will bruise their delicate fingers? I can’t think of any CEO’s that have screwed up and paid the price (not the price of their super yacht) but actually gone down.
January 28th, 2010 at 10:25 pm
kiki
That is a fair point, but few CEO’s get rewarded like Cullen did after his policies created a recession in NZ before the global crisis. NZ Post operating statements are heading in the same direction as the NZ economy under his stewardship, what is next for him – The UN ?
January 28th, 2010 at 10:54 pm
I expect NZ post will head the same direction as a horse shoe manufacture in the 1900’s.
concerning the NZ economy I suspect our problems are more than just poor politicians. It was no surprise that David F should mention this “but for the Governor of the Reserve Bank it may well mean more than the PM. The Governor’s competence has a huge impact on the economy” That an unelected person can constantly screw our manufacturing and productive base is something we must discuss.
January 28th, 2010 at 11:26 pm
kiki
Indeed, If Goff gets his way (Tui right there) Key’s going to love his pay rise when there is a crisis recruiting the next Governor after Bollard jumps for a cushy economist role with a bank.
January 29th, 2010 at 7:53 am
Phil Goof’s statement is mean.
It is petty.
It is vindictive.
Maybe he is trying to turn himself into Helen Clark.
January 29th, 2010 at 8:06 am
This debate overlooks the advantage that capping Public Service CEO salaries would also lead to the salaries of lessor staff staff being correspondingly capped, as no CEO wants his own staff earning what he does.
It might even have avoided the situation where 55% of all employees the Department of Sport & Recreation (SPARC) are paid more than $100,000.
January 29th, 2010 at 10:13 am
Imagine a civil service with enough esprit de corps to compensate for a drop in salary for one applying, knowing that one is serving the nation. Quite a good thing. Would filter out the business school drivel that would be better employed doing overly-paid clerical duties.
March 4th, 2010 at 6:37 pm
The solicitor general is too dodgy to get a 500K salary!!!