Public Sector Pay Rates

Once upon a time public sector staff got paid less than those in the private sector. This was because they didn’t have the challenge of actually generating revenue, had better conditions such as study costs covered etc etc.

The situation in the last few years has reversed. Surveys have shown public sector CEOs now get paid more than private sector ones. And a study has shown that there is now a premium of just over 20% for public sector jobs.


So in 2003, the premium was under 5%. Over the next four years it has increased to a massive 22%. And the study adjusted for other variables.

Now this is not an accident. Part of it was that Labour had no fiscal discipline at all with the state sector. Part of it is a deliberate strategy. Ministers encouraged Dpeartments to sign off on higher wage levels or bonuses if people joined the PSA. So taxpayers would pay higher wages to public servants if they joined the PSA. So of course more people would join the PSA, and then the PSA has more money to spent in election year telling people not to vote National. They were the 2nd largest third party spender last election.

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