Government outbidding business for talent

Media statement Monday, May 7th, 2007

Government outbidding business for talent

Government departments and local authorities are hiking pay rates significantly more than the private sector, the Employers & Manufacturers Association (Northern) says.

The latest Labour Cost Index shows pay rates in the March quarter are up 3.7 per cent compared with a year earlier, whereas private sector rates went up three per cent.

"Not only has the public sector always being pay more than private sector wage increases, it is paying big money to attract an ever growing number of people in competition with private sector employers," said EMA's chief executive Alasdair Thompson.

"There is no reason for the public sector to be paying higher wage increases than the private sector.

"Wage cost hikes of this magnitude are fuelling inflation which our exporters and other businesses pay dearly for.

"New Zealand's tight labour market is not a good reason for government departments to be outbidding business for staff.

"Both central and local government agencies are using other people's money to compete with, and win out over the private sector in the battle of the labour market.

"The labour market is an important area where Government leadership could help curb its spending and help fight inflation, and it can be done without cuts to health, education or police."

ENDS

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