PSA MEDIA RELEASE

19th June 2012 - For Immediate Use

Concern over Whanganui Council attempt to arbitrarily limit staff pay increases

The Public Service Association says an attempt by the Whanganui District Council to arbitrarily limit staff salary increases for the next decade is a sign of things to come if new local government legislation is rushed through.

During deliberations on the Council’s 10-year plan motions were put forward to freeze council staff salaries for the next year and limit any pay increases to 2% over the next ten years.

Both proposals were only narrowly defeated and in one case the Mayor was forced to use her casting vote.

“This was a very arbitrary attempt by councillors to set staff salaries over the long-term without any research or evidence as to the effect on employees and the Council going into the future,” says PSA National Secretary Brenda Pilott.

“Councils employ a range of workers and no one can say what market rates will be for engineers, or office staff or drainage workers ten years down the track. Trying to put a limit on staff pay increases for the next decade is unfair and in breach of their legal right to bargain.”

The PSA believes the attempt by Whanganui District councillors is a sign of things to come under the Local Government Amendment Bill which has just passed its first reading in parliament.

The governance role of councillors is to set a budget within which the chief executive, as the employer, sets staff remuneration levels. However the Bill will blur the lines between governance and operational management and encourage councillors to set policy on staff numbers and salary levels.

Brenda Pilott says it’s in response to a perception created by central government that local government is in crisis with out-of-control debt and rates and staffing blowouts.

“The reality is that most councils are operating within prudent levels of debt and rate increase margins and a 2007 rates inquiry showed that staffing costs are not a major driver of rates increases.”

“If this legislation passes we will see more and more councils, encouraged by central government, making arbitrary decisions about staff which will ultimately impact on local services and communities,” she says.

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