John Key’s response to Phil Goff’s announcement today about capping CEO pay in the Public Service was to call the idea “dumb”.
He says that the problem is not that we have too many wealthy people in New Zealand, but too many people who earn very low levels of income.
He went on to say that a big focus of his Government had been to lift wages.
Now how’s that?
Is it through wage freezes and the loss of thousands of jobs?
Or is it increasing the minimum wage by a pathetic 25 cents?
Or is it by paying half a million bucks for a report by Don Brash that was in the rubbish bin before it was even made public?
Sorry, but these comments show how out of touch Key and his government are.
They’re happy for the party on the top floor to rage on while workers at the bottom get nothing.
I call that dumb.
Good points.
I have been wondering whether Key reckons he’ll pump more money into the top floor (eg giving the rich a pay cut by cutting the trust tax rate and top income tax rate) and argue that will encourage the party to trickle down to the many working poor and working households?
Perhaps by big focus on lifting wages he meant just of CEO’s. It would certainly fit with what he has done so far.
What’s wrong with 25 cents? Someone in a thread on min wage said ‘it’s a slice of bread’ Aye? How much you fullas pay for bread in Wellington? That’s $10 a week cos I suppose if you are on min wage you don’t pay too much tax and you get WFF (unless you’re a discriminated against singleton). Hell Michael (fast becoming a rich rick) Cullen only gave a cancelled piece of chewing gum tax cut.
G
ff ..
“Sorry, but these comments show how out of touch Key and his government are.”
They are out of touch but you are out of government.
I was waiting for you to say “out of touch with ordinary New Zealanders”.
You disappoint me!
Who said…..”Labour is also committed to ongoing increases in the minimum wage to at least keep pace with changes in the average wage.”
Answer…2008 Labour Party Manifesto
Who has just complied with that statement…
Answer the national led government
Question..Who was the Minister of Labour in 2008 when that was written and why didn’t they just increase the minimum wage to $15 an hour then? (As is now advocated)
Answers on a postcard.
Hell..why not $20, why not $30?
Where does the line lay..and what are the established economic theories ( and realities) about what happens as a minimum wage rises?
Is it possible that a party that purports to be for “ordinary” New Zealander’s would knowingly render them unemployed for cheap column inches?
Why is it that any mention of justice, or any suggestion of restraint on the part of those who are financially secure, is met with cries of “dumb,” “unrealistic,” and so on? Somewhere along the line, a large portion of the right seem to have devolved from pious conservatives to grasping thugs.
And will someone please give Spud his voice back? It is too sad to have to communicate in an Esperanto of little yellow characters.
I am at a loss as to why you don’t think that this is a dumb idea Darien? Did Phil run this past you guys before opening his mouth? Do you think the likes Rob Fyfe would apply for these sorts of jobs if you capped the salary to that of the PM? What about our Kiwibank CEO, when he/she looks out of their office window and see’s their equivalent earning 3 times a much more, don’t you think this person will pull out their carefully worded and succinct resignation letter? Sorry but it was and is a dumb idea. I think you have seriously narrowed the talent pool if you think the Rob Fyfe types would apply for these sorts of CEO positions because they have an inherent desire to serve the state.
Goff is calling for more talented CEO’s to adopt a philanthropic approach, leave the private sector, and serve the state for less pay.
In other words, he wants more John Keys.
C’mon, Darien – Labour can’t say John Key didn’t warn us of his real intent. Of course, he let that slip before his Crosby / Textor brigade posted a permanent sentry by his side should he let any more of the Hollow Men’s agenda slip.
Capping CEO pay in the Public Service, it’s a great idea indianna. With all those Rob Fyfe types leaving it would mean there jobs jobs available.
Hell in one sentence Goffs showed more flair at creating jobs than Key lol
Well Darien, you can use this as a point, with teh loss of thousands of jobs which of course National is entirely to blame for, in the campaign for Helensville in 2011, which if your comments are correct you must be confident in winning in a landslide
Phil G’s suggestion merely shows how out of touch he is with reality. It may be popular, and appeal to the envious, but it’d do the country no good whatsoever.
The uncomfortable and unfortunate reality is that those on the minimum wage are there because their value in the labour market is very low. Their levels of skill, or committment, or flexibility or whatever are so inadequate or run of the mill that no one is prepared to offer them more for their services.
On the other hand CEOs who can run organisations that employ thousands, and have a client base of hundreds of thousands, have skills that they can sell far more widely, either within NZ or overseas.
Capping their salaries at a pittance (in international terms) for their role smacks of malice.
If 20% of our CEOs decided to leave for overseas because they were subject to some anti-market salary cap then the effects on the economy would be disasterous.
If the same number of those on minimum wage were to leave the economy then beyond personal acquaintances few would even notice. In the workplace they could be replaced overnight. If that wasn’t the case they’d already be in a position to force their employer to give them higher pay.
This isn’t a comment on the intrinsic worth of any individual in general terms, so please don’t attack it as if it is. It’s merely a statement of reality as far as the jobs market works.
There is an alternative, of course. It was tried in the Eastern Bloc for fifty odd years and brought about nothing but economic stagnation and a system where the skilled were not allowed to travel abroad for fear that they wouldn’t return.
You pay peanuts and in a free labour market you get monkeys. The last thing NZ needs is our major institutions led by monkeys.
Have you noticed how voluble the wingnuts have become? They must be starting to get a bit worried.
Thanks for the reminder Blip. “I would love to see wages drop” said John Key last year. A slip of the tongue which saw him accidently tell the truth!
Rob Fyfe isn’t employed by the govt. and he isn’t the CEO of a govt. dept. Air NZ is a private company in which the govt. has some shares (not the majority of shares though) so this wouldn’t affect him. Why don’t you try and get a real example instead of T’ing S.
@Pedrosky – not true about Cullen’s tax cuts. You are forgetting the cuts prior to the 2008 election.
@George – perhaps you weren’t around on Red Alert to read this, which is a different view to yours on the value of work.
http://tinyurl.com/yl9wqsc
nOexit, but don’t you want top attract people like Fyfe to apply for CEO roles in a govt department? Also, last time I checked the govt had an approximately 80% shareholding in Air NZ…my maths tells me thats a majority. Also Air NZ implored Cullen to downsize their shareholding, but he refused.
I wasn’t around here at the time, but I did come across this elsewhere.
To what extent do you think the ‘findings’ of the report should be implemented?
Do you think, for example, the salaries of all people working in the public sector (or even across the economy as a whole) should be reassessed on this basis and the appropriate adjustments made?
If this model were applied rigourously, what do you consider would be the nature of NZ society (in a world where almost all other economies continued to follow a more conventional free-ish market model, and assuming that freedom of movement of NZ residents was not subject to greater controls than at present) after, say 5 and 10 years?
Key made a bit of a mistake with the “dumb” comment and especially with his comment about how “pathetic” the speech was. Tv One was left with Goff looking prime ministerial for one of the first times, while Key looked petty with his response, really should have dismissed the speech with an off-hand remark about what is important right now. A small mistake but an important one.
A media success rather than a policy one, but it raised some interesting ideas to develop over the year. Well done.
Sorry – forgot to add that the above comment was in response to Darien, at 2:55. Apologies.
What an interesting situation. On one hand many govt employees enjoy a premium above their private sector counterparts (especially in IT) – something that increased under the last Labour govt. On the other hand it was a Labour govt that signed off on public sector CEO’s receiving 5% p/a salary increases, which National froze in their first year.
So there are a couple of dichotomies inherent in this issue, first should all govt employees be treated as equals to private sector? In which case we’re looking at reductions in salary for a lot of skilled IT workers (to name just one group), and conversely possible salary increases at CxO level. Or do we say all govt workers should be paid less than private sector (by x%)? Or perhaps we say to a certain level they should be equal and then above that they should do the job for philanthropic reasons?
I am however pleased to see a move by Labour towards cutting costs in the public sector. All you have to do now to get my vote is commit to a 40% reduction in the number of MPs.
It’s all Labour can do until Phil gets rolled three weeks out before the next election – play the ‘rich’ card.
@George – was trying to point out that there is more to the value of work than your earlier observations, but thanks for reading it.
@Andrew – yes, Key did. He’s now backed himself into supporting highly paid CEOs in the public sector that he has so often criticised as being “bloated”.
Labrat where did national ‘freeze in their first year’ CEO salaries?
Not a dot about CEO salaries that I can find , but plenty about the rest of the public service, pay , conditions, numbers of .
http://www.beehive.govt.nz/portfolio/state+services
the Netherlands has a semi official salary cap for the public service the Blakenende norm ( after the current PM) also based on the PMs salary
http://www.typically.nl/176/the-balkenende-income-cap/
Its currently EU160,000. Very similar to the $400,000 or so for NZ And the Netherlands has 3X the population
indiana, sorry i got the air nz thing wrong, the govt. does have 75% of the shares but they have no extra power over the company, they’re just ordinary shares. The job Fyfe does is a hundred times harder than what the CEO of a govt. dept. does. CEO’s of govt. Depts. just have to implement policies set out for them, the don’t have to think of them, they have to manage a budget given to them, they don’t have figure out how they’re going to raise capital. They often don’t have to worry about marketing etc. etc. My point is that it’s not fair to compare a job like Fyfe’s with the job a CEO of a govt. dept. because they’re not in the same league…. Therefore they should be paid less. People like Fyfe are probably not going to apply to be CEO of govt. Dept. It comes down to who’s job is harder, the PM or the CEO (of a govt. dept.)…. The answer is easy…….
There were moves in Australia recently to limit the salaries ( and bonuses) of public company CEOs. This was to be done by requiring shareholder approval. This had been dropped as it was outside the governments powers and more of a requirement for stock exchange listing.
If the market isn’t to be allowed to determine services, then what is?
Is every salary to be regulated with regard to some external benchmark, or just some?
We seem to have here an arguement that the current system is unfair, but no definite suggestion (apart from something that would affect almost no one) of how that would be addressed. I agree that the market can be very unfair, but would argue that for all its imperfections it’s the best system there is. You only have to look at the centrally controlled economies of the Eastern bloc in latter part of the 20th century to see what a disater that turns out to be.
So if the call is that the current system is wrong and needs to be changed, lets have some meaningful and detailed proposals for what it should be changed to, how it would be implemented, and a prediction of the society that would result.
If we could get a better system which rewarded enterprise, initiative and hardwork and kept the best in NZ then I’d be very supportive.
Oops! Should be ’salaries’ not ’services’ in first line of last post.
“It comes down to who’s job is harder, the PM or the CEO (of a govt. dept.)…. The answer is easy…….”
Nice to see that the role of the CEO of a state department is being belittled. I’m not trying to compare roles, I’m trying to compare caliber of candidates. But as you have said the job is easy, then any numpty with a fake CV can do the job…nice.
If the jobs are of low quality, why did Labour set in place a 5% wage increase annually for CEO’s during their term. All of sudden the circumstances change and it becomes a problem.
CEO’s as skilled as Fyfe are unlikly to go for a job as the CEO of a govt. dept. It’s not their level of work…. CEO’s of govt. deparments have an easier job (that’s not to say their job is easy) and Fyfe like candidates arn’t attracted to those sorts of roles…. Therefore you don’t need to pay them extravagent amounts. Yes, labour increased their pay but they shouldn’t have…. So now they’re going to decrease their pay… I don’t see National doing the same….
@n0exit – but everything you seem to want to achieve can be done by ensuring that the correct market rate for the job is paid to the right person.
No need for populist posturing.