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PSA Bounties and NZEI Perks -- Rodney Hide

PSA Bounties and NZEI Perks

Sunday 1 Dec 2002 Rodney Hide Speeches -- Governance & Constitution

PSA Bounties and NZEI Perks:

Why They Are Against the Law, and Why They Are Going to Cost Taxpayers Many More Millions

Speech by ACT New Zealand Finance Spokesman Rodney Hide to the ACT Auckland North Regional Conference, Bruce Mason Centre, Takapuna, Auckland, on Sunday December 1, 2002

Thank you very much for your support of the ACT cause and for coming along today.

We are here today because we want a New Zealand that is proud, we want a New Zealand that is prosperous and we want a New Zealand that is free.

On our country's current direction, we are losing it. How can we be a proud people when so many of us are dependent upon the state? How can we be a prosperous nation if our Government is sucking up 40 percent of all that we produce and destroying the very entrepreneur spirit that we need to produce more wealth? And how can we be a free and rational people if a taniwha monster down the road can stop us using our land and our resources as we choose?

We believe that to be free and to prosper, government must be constrained. That there must be limits on what government can and can't do. And we believe to be free that the government itself must stick to the law so that those constraints have meaning.

We stand four square against Helen Clark's Government and the direction that Helen Clark is charting for New Zealand. Helen Clark and her Government are wrong. They do not believe in limited Government, the Rule of Law, or the free market.

Helen Clark sprinkles taxpayers' hard-earned cash about not based on any philosophy or rational priority but simply to buy up political support.

Helen Clark's Government believes that government should be unfettered. She and her Ministers believe that their government should be able to do anything that that they want. They decide one year to "close the gaps". They decide the next year not to. They decide one year to disband the air combat wing. The next year they send our service men and women into harm's way in the Gulf.

Helen Clark and her Ministers believe themselves above the law. The lesson comes from the top. Helen Clark has breached insider trading laws, forged a painting and her staff have destroyed evidence needed for the police investigation.

Helen Clark sees no distinction between the private realm and the public realm. She sees nothing wrong with sitting down for a meal to discuss public-private partnerships on a TVNZ credit card.

She sees nothing wrong with taxing working people hard and giving $75,000 of taxpayers' cash to The Warehouse for a deal that Jim Anderton tells Parliament will more than double investor's money each and every year.

And last week I revealed that Helen Clark's Government had broken their very own Employment Relations Act. They expect that law to apply to every other employer in the country, but not to them.

The Government has used taxpayers' money to pay civil servants to join the Public Service Association. Over at the Department of Corrections, staff get $750 on signing with the PSA. It's $600 at Department of Internal Affairs. It's $800 at IRD. It's $550 at Land and Information and up to a whooping $900 at the Ministry of Social Development.

These bounty payments have cost the taxpayer a staggering $5 million at these five departments alone. The PSA says there are another seven departments that have done similar deals. In some departments, staff get extra days off just for joining the PSA.

Staff have told me how it works: they are told to join the PSA by a set date to get the cash and the days off.

The deal is a simple one really. They agree to pay $5.50 each week to the PSA and Helen Clark's Government then compensates anywhere between $550 and $900 as a lump sum. The PSA gets another $286 a year and the civil servants are more than compensated. The only losers are the taxpayers who again are being made to fork out to buy the Labour Party political support.

The scandalous payments don't stop with the one-off cash bounties and holidays for PSA membership.

Helen Clark's Government is also inducing teachers to join the teachers' union, the NZEI, through a five million dollar bribe funnelled through the "Teachers Retirement Savings Scheme". Teachers who sign up to the savings scheme are entitled to have a dollar-for-dollar taxpayer subsidy up to a maximum of one percent of their salary. The top-up is anywhere between $234 and $513 a year depending on where a teacher sits on the pay scale.

There would be nothing objectionable to the top-up if it were available to every teacher.

But it's not: teachers must join the NZEI to obtain the subsidy. Teachers who are not members of the NZEI don't receive the subsidy.

The "Teachers Retirement Savings Scheme" web page makes the joining requirements clear: "Currently employed teachers must join NZEI ( to qualify". The web page even has a direct email link to the teachers' union.

The one percent top-up is precisely the cost of union membership for teachers earning less than $26,500 a year. For teachers earning over $26,500 a year, NZEI membership costs $15.30 a fortnight.

Minister Trevor Mallard has promised teachers that the subsidy will increase, further increasing the inducement to join the NZEI.

Education dollars are being rorted to increase union numbers and revenue in yet another Labour Party booster union.

The practice of paying civil servants and teachers to join Labour-friendly unions is scandalous. It is also unlawful.

Margaret Wilson's Employment Relations Act makes it illegal to pay an employee not to join a union. Imagine the outcry from this government if businesses were paying their staff not to join the union? Margaret Wilson would go nuts. But the law cuts both ways. It's also against the law to pay someone to join a union. And yet that is precisely what this Government is doing.

The trouble with Helen Clark and her Ministers is that they think that their law should apply to everyone else but not them.

Section 9 of the Employment Relations Act states that a "contract, agreement, or other arrangement between persons must not confer on a person because the person is or is not a member of a union or a particular union (a) any preference in obtaining or retaining employment; or (b) any preference in relation to terms or conditions of employment (including conditions relating to redundancy) or fringe benefits or opportunities for training, promotion, or transfer".

The bounties and the super top-ups are a clear breach. The remedy is set out in section 10: "A contract, agreement, or other arrangement has no force or effect to the extent that it is inconsistent with section 8 or section 9". The agreements can be easily overturned. The agreements are going to cost the taxpayer millions.

Less than half of all civil servants are members of the PSA. That's despite employment law being tipped in the union's favour and being paid to join. It will only take one civil servant to cough up $70 to lodge an application before the Employment Relations Authority. The case will be heard in eight or so weeks in Auckland; and in five or six weeks anywhere else in the country. The country's best employment lawyers have advised me that it is an open and shut case. The remedy will be that the top-ups and payments will have to be made to all civil servants and teachers irrespective of their union status.

The lump sum will have to be paid to civil servants who are not in the PSA. They will also have to get the extra holidays. And teachers will be able to have their pensions subsidised without first having to cough $15.30 a fortnight to the NZEI.

It is illegal to do anything else. That's not a bad return for a $70 application.

The bounties and top-ups also appear to amount to undue influence being exerted on non-union members to join the union - a breach of section 11 of the ERA.

Minister Trevor Mallard has crowed about the payments. State Services Commissioner Michael Wintringham has lent his full support. I have challenged Mr Wintringham to produce the legal opinions that he's relying upon to say these payments are lawful. He has so far declined.

These two men are in trouble. The payments are wrong. And they are unlawful.

I am today writing to Mr Wintringham asking him to explain why he believes these union payments and perks are lawful and worthy of his support. His response will be an interesting one.

National's Dr Don Brash has quite rightly complained to the Auditor General. It will be very interesting to see his response.

It will also be very interesting to see the Employment Relations Authority response - and then the Government's response - once an application is made.

I would be surprised to see Helen Clark's Government attempting to effect some dead-of-night law changes to boost the Government's union mates. Certainly, Mr Mallard and Mr Wintringham will have some heavy explaining to do.

We have a big job to do holding this Government to account and to the law. Far easier that we just rid them out of government at the next election. Then we will have a government that focuses on the key priorities of Government and doesn't put itself above the law.

Thank you very much.

For more information visit ACT online at or contact the ACT Parliamentary Office at

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