NEW ZEALAND: Lower pay rises ahead

New Zealand's university staff are facing the end of a run of significant pay rises amid concern that the government is taking an unprecedented, and unwelcome, interest in the tertiary education sector's pay deals.

During the past three years the government has provided millions of dollars in special funding to bump up pay rises for staff, resulting in increases as high as 7.5% and with a cumulative total of as much as 20%.

But this year a different government is in power and it will not continue its predecessor's practice. In addition, universities appear to be facing a worsening financial outlook.

Quite what impact this will have on this year's pay talks, currently stalled after just four days of negotiation, is not clear. But the University of Auckland gave a strong indication when it gave all staff a pay rise of 2.6% earlier this year.

It has done the same in the previous three years and subsequent negotiations have not changed its initial increases. If the same holds true this year, 2.6% could well be the high water mark for university pay deals this year.

Tertiary Education Union National Secretary Sharn Riggs said the Auckland offer presented a minimum figure to work from. "It certainly sends an interesting signal."

Another factor working against the union's aspirations for its members this year is the government's attitude to pay rises in the wider state sector. It has indicated that government agencies and public sector bodies such as universities should give pay rises only if they are accompanied by productivity increases and is monitoring the situation through its State Services Commission.

Tertiary institution chief executives must consult with the commission about their proposed pay deals though they are not obliged to comply with its opinion.

Though university pay talks have not progressed far, the union has complained the commission is interfering in negotiations in the polytechnic sector, alleging it has effectively derailed at least one settlement already.

The union wrote to State Services Commissioner Iain Rennie alleging he had overstepped the mark, and was effectively exercising a power of veto over tertiary sector pay talks.

But Rennie responded he was well aware of his responsibilities and those of chief executives while Riggs said the union was considering how to respond.

State Services Minister Tony Ryall said in a statement the state sector was in a period of significant restraint. "We will have to do more with less for the foreseeable future."

Ryall said key points of the government's expectations for the sector were that any changes to pay must not lead private sector movements and must take into account the total cost and value of employment conditions.

Also, state sector agencies were expected to demonstrate that outcomes were fiscally sustainable within baselines, responsible, and demonstrate value for money.

* John Gerritsen is editor of NZ Education Review.

John.Gerritsen@uw-news.com