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Otago Daily Times
08-05-2025
- Business
- Otago Daily Times
National MPs briefed two days before pay equity announcement
By Jo Moir of RNZ The National Party leadership briefed its MPs two days in advance of the government's announcement to overhaul the pay equity system that makes it tougher for women to lodge claims. While the party caucus was meeting at 10am on Tuesday - an hour before Workplace Relations Minister Brooke van Velden revealed the pay equity changes - Prime Minister Christopher Luxon and Finance Minister Nicola Willis considered it significant enough to give its MPs more warning. The pay equity reforms would have inevitably raised questions with MPs about how to sell the legislative change, particularly to women voters, and how to answer media questions about the rationale behind the decision-making. National has been under fire for the changes, that will generate savings to the tune of billions of dollars, and help plug a big hole in the Budget to be released in two weeks' time on May 22. Speaking to reporters at Parliament this afternoon, Willis confirmed the Sunday briefing, and said officials had warned ministers of "legal risks" if the government had talked about its intentions to make changes to pay equity laws ahead of the new legislation being passed. The risks were associated with "the fact there were already claims being progressed, and due to the impact that could have both on bargaining behaviour and the initiation of new claims," she said. On becoming Finance Minister in late 2023, Willis said she discovered the full forecast cost of pay equity claims. "That number blew my mind... it seemed disproportionate to what I thought Parliament had envisaged when it passed the Pay Equity Act in 2020. "I was advised that one of the factors that had led to an escalation in those costs was a decision by the previous Cabinet that they would indicate that they would fully meet the costs of claims made by non-government employers, where those employers were government-funded. "And the impact of that was that it affected the bargaining approach of those employers, because essentially, they knew the government was paying the cheque." At that time Willis said the government was not putting aside funding contingencies, it had been put in forecasts "but not fully disclosed to the public what those figures were". As a result, in April last year a paper went to Cabinet that was intended to address the issue of non-government employers' pay equity issues being funded by the taxpayer. She said that was the first time Cabinet considered pay equity changes and that led to a Cabinet strategy committee being set up in December. "It was at that time Cabinet expressed a preference that we should deal with the underlying issues and amend the law. "It was an issue we explored over a number of months and ultimately we have made decisions coming out of a strategy meeting in December, and we took those decisions in due course." Willis said in March - two months ago - Cabinet signed off on the pay equity reforms announced this week. She defended the complete secrecy surrounding the government's tightening of the regime designed to help women get fair pay. The decision to not produce a regulatory impact statement ahead of the law passing through urgency this week came down to the risk of it making its way into the public domain. "Once we had made the decision that we would amend the Act, we were aware that there were significant risks that if that information entered the public domain, then that could affect bargaining behaviour and legal behaviour. So we wanted to make sure that we progressed it rapidly," Willis said. Asked whether ACT had strong-armed National on going further on pay equity changes, Willis said: "not at all". "For a number of months it was becoming clear to me that the way the pay equity scheme had developed had departed from its original, I think, very important intent, which was to correct for gender-based discrimination. "That is a very important goal. But it had become clear that other market-based factors had entered bargaining, that the incentives on some of the parties in those claims weren't fully aligned, that the costs had escalated well beyond what people had originally envisaged, and it was clear that those issues would require addressing in some way." In April last year, the government changed the framework that "provided guidance about the circumstances in which government would pay for the cost of claims against private sector employers". "Our view was that the taxpayer has an obligation where the government employs someone that if they have discriminated against them, then yes, the government should pay for the settlement of that claim, but where it came to providers in the private sector, we believed the issues were more nuanced, and we were also concerned that, of course, the government wasn't at that bargaining table, so we weren't in a position to test the claims. "The advice that we'd had from officials was that they were very concerned with the way the process had evolved," Willis said.
Otago Daily Times
08-05-2025
- Business
- Otago Daily Times
Capital spend to get boost in Budget
By Jo Moir of RNZ Capital expenditure - new money set aside in the Budget to maintain or upgrade assets - will be higher than originally forecast when the government delivers its Budget in two weeks' time. In a speech to Business New Zealand on Thursday, the prime minister said the money, which would be split mostly across health, education, defence, and transport, would total $6.8 billion. It means the net capital allowance, once savings identified in the Budget have been accounted for, will increase from the $3.6b previously signalled, to $4b. Last week Finance Minister Nicola Willis cut the operating allowance by half to $1.3b. Christopher Luxon told the business audience the smaller operating allowance was the "right call because keeping our word matters". "I know there are some commentators calling for larger allowances and more spending. "They need to be honest that those decisions will mean more debt, more deficits, and an indefinite delay to New Zealand's return to surplus," Luxon said. Luxon said capital expenditure, including for frontline services like health and education, would be a priority in the May 22 Budget. "In health, education, law and order, defence, and transport my government is prioritising significant new investments. "Each of those areas are a priority for New Zealanders and they require more funding to deliver the quality services Kiwis expect. "But that comes with trade-offs," he said. "Spending more on everything, as some commentators have called for, would mean larger deficits, more debt, and ultimately fewer choices in future budgets as the cost of servicing our debt grows even larger and the prospect of returning to surplus evaporates." Luxon said capital investment would be critical to the country's "growth journey", but he noted that would not happen if "we invest more but continue to lag behind the global technological frontier". "In Budget 2025, we will be allocating the funding we need to give effect to the changes I announced earlier this year, including the establishment of three new Public Research Organisations. "I also know that following a review of the Research and Development Tax Incentive that kicked off last year, the business community has been looking for some certainty on the future of the programme. "That review was required in law, and the final report has not yet been tabled in Parliament," he said. "However, I can confirm today that we are retaining the RDTI in this year's Budget so businesses have the certainty they need to keep investing and keep going for growth." Luxon also announced funding would be provided in the Budget for the government's new Invest NZ agency, which was set up earlier this year to support foreigners wanting to invest here. Luxon said this month's Budget comes alongside a "challenging international backdrop". "Trade tensions overseas have seen growth forecasts revised down across the world, as exporters and consumers come under sustained pressure. "The sharp deterioration of financial markets in early April have somewhat recovered in recent days and weeks, but markets remain volatile." There were greenshoots too though, he said, with ANZ's initial estimate last week that "the smaller operating allowance would support interest rates being 5-10 basis points lower than otherwise." "Meanwhile, Treasury has estimated that with a tighter budget package, interest rates would be up to 30 basis points lower by the end of the forecast period. "For a family with a mortgage, or a farmer or entrepreneur taking on debt to grow their business, that means real financial relief and more opportunity to get ahead," Luxon said.
Scoop
07-05-2025
- Business
- Scoop
Pay Equity Changes: Two Sides Of The Coalition Brought Out
Article – RNZ Analysis: ACT ministers were popping champagne after the sudden announcement, but National's were on the defensive, writes Jo Moir. Jo Moir, Political Editor Analysis: The government's sudden decision to massively rewrite the pay equity regime – making it harder to lodge claims – brought out two very different sides of the coalition on Tuesday. While ACT ministers were popping champagne corks and lauding their Workplace Relations Minister Brooke van Velden for single-handedly 'saving the Budget', National Party ministers were on the defensive and contradicting soon-to-be deputy prime minister David Seymour's victorious claims. So aware of the optics of halting pay equity claims for sectors with high rates of female workers to plug a billions of dollars-sized hole in her second Budget, Finance Minister Nicola Willis headed to the media gauntlet flanked by four female ministerial colleagues. Judith Collins, Erica Stanford, Lousie Upston and Nicola Grigg were there for support, but did not speak, as Willis denied the move was about making her Budget add up. Willis said the government believes in the principle of pay equity, where women are able to prove it. 'What this is about is ensuring we are clear, transparent, and fair to ensure that where those claims are made they relate to gender-based discrimination and that other issues to do with pay and working conditions are raised during the normal employment relations process.' She noted that Treasury had been forecasting increases in costs around pay equity claims, but had revised that figure down by 'billions' as a result of the changes to the threshold the government is making. Willis won't be ring-fencing those savings for women impacted by the changes, but says they'll benefit from it when the funding is reprioritised into frontline health and education services. Across the way from Willis was her boss Christopher Luxon, who got terse when it was suggested the law change was about making the government's Budget add up. 'It's got nothing to do with the Budget, this is about making sure we have a piece of legislation that is incredibly workable and not as complex as it has been.' The prime minister, who stopped doing Tuesday afternoon media conferences some months ago, had unexpectedly appeared to do damage control, knowing full well Act would be on a victory parade. So what of the timing then? The legislation reforms haven't been considered urgent, or even raised by Luxon or Willis in the past 18 months as being necessary. Two weeks out from Budget Day, National ministers would have it believed the legislation has become so unworkable so quickly that it needs to be fixed under urgency in Parliament within 24 hours of the public being notified. It's retrospective, meaning 33 claims currently underway will be stopped in their tracks and the new threshold will apply to any new claims from this point on. Protesters furious at the speed the legislation was progressing, and without an opportunity for feedback or consultation, prompted hundreds to spontaneously gather on Parliament's forecourt as MPs started to make their way to Question Time. Nurses, care workers, and many more spoke of being shocked, appalled, and devastated after being blindsided by van Velden's announcement. Yet Willis says Cabinet ministers were comfortable with the evidence van Velden put forward, adding 'we believe the minister provided a very principled case'. A principled case that didn't warrant first hearing from those who would be most directly impacted. There's been a gaping hole in Willis' Budget that promises increases in health, education, law and order, and defence, along with a targeted cost of living relief package. Plenty has been committed to – at least $10 billion in new defence spending for one – but with no new taxes and no specific targets for public service cuts, there has been endless speculation about how it might add up. Killing Kiwisaver government contributions hasn't been ruled out while putting an end to winter energy payments has been. On Tuesday a big missing piece of the puzzle was unveiled by van Velden. The Opposition will use this as a stick to bash government ministers with, saying they don't care about women and low-income workers are the sacrificial lambs for whatever pet projects get a greenlight in the Budget to be revealed on 22 May. Act will be praised by its supporters for finding the biggest cuts and doing the heavy-lifting on the government's path to fiscal prudencey. It's Willis and Luxon, however, who will be judged most harshly for how the government has got there. Content Sourced from Original url
RNZ News
07-05-2025
- Politics
- RNZ News
Equal Pay Amendment Bill debated under urgency
In parliament this morning, a controversial Equal Pay Amendment bill is being debated under urgency. The bill scraps all existing pay equity claims. Advocates who've worked for years on claims were blindsided by the government's lightning move yesterday. RNZ Political Editor Jo Moir speaks to Kathryn. Tags: To embed this content on your own webpage, cut and paste the following: See terms of use.
