Government's secret pay equity overhaul bypassed public scrutiny
The bill halted existing claims and raised the threshold for proving undervalued work. Photo / Jason Dorday
It was revealed in the Budget that the savings from tightening the regime amounted to about $12.8 billion over the next four years.
The documents, released to RNZ under the Official Information Act, revealed ministerial meetings, including one involving the Prime Minister, were carefully managed, with instructions to withhold their proactive diary release under confidentiality provisions.
One email from Workplace Relations and Safety Minister Brooke van Velden's office instructed officials to manually remove digital access to cabinet papers, warning that leaving the default settings in place 'will give access to ministers but also SPSs [senior private secretaries] and some ministerial advisers. So you might want to remove that and we can add individual named ministers instead'.
Workplace Relations and Safety Minister Brooke van Velden's office kept details of pay equity changes under tight wraps. Photo / Mark Mitchell
Another memo described how hard copies were hand-delivered to ministers' offices to avoid creating digital trails.
'If you really need a soft copy, I can email it through,' wrote an official from the office of van Velden.
'For context, I swear I'm not being weirdly difficult – this was the method of distribution that has been advised.'
The strategy was internally referred to as 'Project Ten'. A comprehensive communications pack was prepared in advance, to be released only after the bill had been introduced and passed.
'We recommend that any announcements or statements about the proposed amendments must be made after the introduction of the bill,' one paper said.
'This is because there is a risk of a large increase in the number of claims being raised if information about the proposed changes is made public beforehand.'
That advice was followed.
The legislation stopped 33 active claims overnight, some of which had been under way for years, and implemented a stricter legal test for future ones.
The documents make clear that fiscal concerns were central to the push – a key driver was to significantly reduce costs to the Crown.
Officials stressed the need for the law to be passed in time for Budget 2025, reinforcing the cost-cutting motive.
But, they acknowledged the truncated timeline meant there was no opportunity for public submissions on the bill, a process later criticised as 'particularly unusual and draconian'.
Officials also conceded limited testing and analysis of the policy proposals because of the short timeframe, and raised concerns about unintended consequences arising once the bill has been passed.
Despite the rushed process, the internal discussions reveal the Government was aware of the contentious nature of the changes.
Officials noted the proposed transitional arrangements, which 'retrospectively remove and alter people's rights', were 'most likely to be contentious' and 'may engage the Human Rights Act and Bill of Rights Act'.
It proceeded anyway.
– RNZ
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This saved $9.6b over the forecast period. For the public sector contingency, Treasury recommended it be retained, but at a reduced level. "On balance, we consider retaining the contingency at [redacted] for residual costs to protect future allowances to be preferable given the legal obligations on the Crown as an employer under the new Act and Treasury's judgment that we can quantify the impacts with more than 50 percent confidence," Treasury wrote. The government adopted this approach, with the tagged public sector contingency reduced by $3.2b over the forecast period. In total, the changes returned around $12.8b to the Budget 2025 operating and capital allowances. Closing or reducing the contingencies without some certainty from Cabinet on policy change, however, was seen to potentially "strain the credibility" of future Budget allowances. And so, the future approach to pay equity was developed. 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