Cabinet Ministers Defend Hiking Board Fees For Crown Bodies
Labour says the decision proves the government is out-of-touch with the cost-of-living crisis and has accused it of trying to sneak the news by the public.
A Cabinet document, quietly uploaded online on Monday, shows ministers agreed to lift the maximum annual fee for chairs of governance boards from $90,000 to about $162,000.
The "Cabinet Fees Framework" is not binding but provides guidance to ministers when deciding compensation for those on a range of bodies, such as royal commissions and ministerial inquiries.
Speaking on Tuesday, Luxon said public sector fees had become completely "out of whack" with private sector rates and needed a reset.
"We need to make that a little bit more competitive, so that we can actually attract good talent," he said.
Luxon said paying more to ensure "really good governance teams" could save billions in the long run.
Finance Minister Nicola Willis echoed the point, stressing that New Zealanders deserved value for money.
"This isn't beer and skittles. This is billions of dollars of public money. We need the very best people making governance decisions about it."
Public Service Minister Judith Collins told reporters that the updated fees still fell short of private sector rates - around 80 percent of the going rate.
"A lot of people who are experienced directors don't want to do these jobs in the public sector because they know they're going to lose money," she said.
Collins said she did not think the public would be worried by the news.
"One of the problems is that we've had an underperforming public service that's taken a hell of a lot of taxpayers' money, and so it is very important that we have the right people in charge of that."
Hipkins accuses government of 'twisted priorities'
Labour leader Chris Hipkins said the decision revealed the government's "twisted priorities" at a time when households were doing it tough.
"They're saying that board members can get up to 80 percent increases in their pay, whilst nurses and teachers are being told to settle for 1 pecent or less," he said.
"They've said everyone needs to tighten their belts - apparently except for the people who they hand-picked to put on public sector boards."
Hipkins rejected the idea that higher fees were necessary to attract quality candidates, calling it "absolute nonsense."
He said many public appointees had altruistic motivations and were already sitting on "very well paid directorships" in the private sector as well.
"They're not doing it for the money," Hipkins said.
Hipkins accused the government of trying to "slip this [announcement] out quietly" without scrutiny.
But Luxon denied any secrecy: "It's normal practice... how it's been communicated."
Hipkins does not appear to have issued a media release as Public Service Minister in 2022 when the then-Labour Cabinet agreed to a smaller 10 percent increase in fees.
In November, State Owned Enterprises minister Paul Goldsmith did publish a release about a similar but separate move to increase director fees for 22 Crown-owned companies.
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