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?

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