Public Sector Pay Adjustment Process

18 October 2022

In response to pressure from unions about the current cost of living crisis, Te Kawa Mataaho (Public Service Commission) is engaging in a process with Public Sector unions to reach agreement on a Public Sector Pay Adjustment (PSPA). Cabinet has decided that the process should be progressed.

With CPI for the September quarter remaining high at 7.2%, there is extreme pressure on public sector pay packets with most recent increases being less than 3% and many less than 2%.  While some agreements are currently in the process of renewal, there is little real opportunity to bargain for further increases in settled collectives because their expiry date may be up to three years away.

A “top up” approach is likely, which presumably would provide varying levels of pay increase for employees covered by different agreements depending on various factors, such as the size of the applicable collective agreement’s last increase, when that became effective and the timing of any agreed future increases.

The process would apply to settled collective agreements as well as those currently being bargained.  The intention is that any increase would also be applied to non-union members falling within coverage of the relevant collective agreement.

Just how ‘public sector’ is defined in relation to this proposal remains to be seen.