Media Release
17 September 2012

Reform Savings Delivering $45m Pay Rise at Defence

The New Zealand Defence Force’s Regular Force, Reserve Force and Civilian staff are getting a $45 million pay rise, it was announced today.

Chief of the Defence Force, Lieutenant General (LTGEN) Rhys Jones, told Defence’s people of the $45 million injection into their remuneration package this morning. In addition, they were told that the Defence Force has allocated up to another $40 million in a one-off buy-back or buy-out of specific entitlements and conditions of service that are being phased out.

“The 2012 Remuneration Package is a significant investment in the Defence Force’s people,” says LTGEN Jones.

“We are reinvesting some of the savings the Defence Force has achieved through the last three years’ transformation and reform programmes back into our people. This was always one of the promised rewards of finding efficiencies – reinvesting in our frontline, which is our people.”

LTGEN Jones stressed that this wasn’t an across the board pay rise. The remuneration system used within the Defence Force is more complex than that and instead links every position to published market rates.

“To ensure fairness, these changes bring all Defence Force people’s pay up to the midpoint of the appropriate published 2012 market data. The vast majority of Defence Force employees will get an increase to their basic salary. The total remuneration of those already above the mid-point is being protected.”

There is also a significant increase for both Regular Force and Reserve Force personnel in what is known as the ‘Military Factor’ – the premium paid to uniformed personnel in recognition of the hardships associated with military life, for example, often being separated from family, and being on call 24/7. This compensates for the removal of some current leave and allowance entitlements that will cease. For other entitlements ceasing, choices are being offered in the form of buy-backs or buy-outs of existing entitlements.

In announcing today’s remuneration changes, the Chief of Defence signalled that later this year there will be an adjustment in rents for those people living in Service housing and barracks to align these to market rates, removing the rent advantage people living in Service housing have compared with those living off base.

“Behind these changes has been the desire to be fair to all our personnel,” he says.

ENDS

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