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Public Service salary increases foster inequality

Media Release 12 October 2012
Public Service salary increases foster inequality

The national body representing the country's Community Law Centres has added its voice to criticism of the big salary increases awarded to state sector chief executives saying the increases foster inequality and the growing gap between rich and poor in New Zealand.

Community Law Centres o Aotearoa chief executive Elizabeth Tennet says that $40,000 would make little difference to a chief executive earning over $600,000 but it would make an enormous difference to those at the bottom – the clients whom Community Law helps.

At a time when state funded organisations such as Community Law are being asked for increased efficiencies and do more with less, Ms Tennet says the funds being spent on salary increases for individuals would be much more effectively directed towards the organisations delivering important social and community services.

“The increases show a lack of appreciation of the inequalities that exist in our society. It is also ironical that they come at much the same time as a report from the Ministry of Social Development shows that the gap between rich and poor in New Zealand is at its highest level ever,” Ms Tennet says.

“Globally also, growing inequality is coming to be seen as one of the biggest social, economic and political challenges of our time. That is the lead story in the current issue of the Economist magazine which argues that new policies are needed to mitigate inequality without damaging economic growth.

“Curtailing big salary increases would be one such policy. Many of these State Sector bosses are more motivated by a sense of wanting to make a difference and it is simply not believable that constant financial top-ups are necessary to retain them.”

Ms Tennet says 24 Community Law Centres provide services to some 250,000 people annually and those services are essential to ensure everyone has access to justice. A recent report by the New Zealand Institute for Economic Research showed Community Law delivered real value for money.

For more about Community Law see www.communitylaw.org.nz

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