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Pay Rise For Defence Force Personnel

Budget 2002 - Pay Rise For Defence Force Personnel

All uniformed defence personnel will receive a pay rise from June 30 this year, Defence Minister Mark Burton announced today.

"The Chief of Defence Force and I were able to take a compelling case into the budget process for additional funding for defence pay rises," Mark Burton said. "As a result, there is an additional $9.5 million in the 2002/2003 budget, rising to $19 million next year, to raise salary levels.

"Air Marshal Ferguson has identified one-off savings from within baselines that enable him to match the government’s cash injection of $9.5 million for the 2002/03 year, allowing the full pay rise to apply from June 30."

The base pay increase is 2% across the board. There will also be a $573 increase in the Military Factor (which compensates Armed Forces for the additional liabilities of Service such as compulsory postings, duty 24 hours a day, Service discipline etc). In addition there is some significant targeting at the captain, warrant officer, and staff sergeant equivalent ranks.

This is the second consecutive year that the government has supported remuneration adjustments for the Armed Forces. On May 01 last year a Government funding injection of $21.4 million allowed pay rises to be targeted at junior ranks and technical trades.

"This year the Chief of Defence Force has taken a more general approach, recognising that in a very strong employment market there are retention pressures across most trades and ranks.

"The government accepts that there is a need, over time, to progressively improve defence force pay rates. As today's announcement shows, we recognise that the greatest assets of the New Zealand Defence Force are its people," Mark Burton said.

BACKGROUND INFORMATION

Pay Information

The 2002 Armed Forces pay adjustment will cost $19 million inclusive of employer costs (superannuation, ACC levies) and GST. It will take effect on 30 June 2002. The increase will be funded with $9.5 million in additional funding for the 2002/2003 financial year and $19 million in out years. The Chief of Defence Force will fund an additional $9.5 million in 2002/03 in one off savings from within baselines.

The adjustment will be:

- 2% across the board

- a one step ($573) increase in the Military Factor

- targeting of specific ranks and specialist groups.

The majority of individual increases in total remuneration will fall within a range of $1000pa to $4900pa. There will be higher increases for a few specialists such as doctors and legal officers, who have been paid at markedly lower rates than elsewhere in the public sector.

Specific examples of total remuneration increases:

- Warrant officers -$3900pa increase

- Senior captain equivalents -$3900pa increase

- Staff sergeant equivalents -$2600pa increase

- Sergeant equivalents - $2000pa increase

Retention

In a strong employment market (unemployment is at a 14 year low), there is considerable pressure on all three services. The pay adjustment last year addressed some of the pay concerns of junior personnel and their attrition rate has decreased.

The main focus is now with personnel in the 5-8 years service group who make up 16% of total strength and who represent an important part of NZDF core skills. Retention in this group is a real priority because they are trained, at their most productive, and provide the future senior officer and other rank leadership in the three Services. The most common reasons cited for leaving are other employment opportunities, and pay and workloads.


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