Iain Rennie

Wellington, Oct 16 NZPA - State Services Commissioner Iain Rennie has urged restraint in state sector pay, despite yesterday's announcement of increases to the salaries of top public servants.

The number of civil servants earning more than $100,000 climbed from 4771 to the end of June, compared with 3782 the previous year.

Last year, the highest earning non-chief executive civil servant received between $360,000 and $369,999; this year's report showed the highest was on $490,000-$499,999.

Last year five civil servants earned more than $300,000; this year 34 earned more than that -- an almost seven-fold increase.

Mr Rennie said the rises flowed through from a decision in 2005 to increase the overall funding for chief executives by 5 percent a year for five years.

After the global credit crisis sparked a world wide recession the order had gone out to rein in spending.

The wage bill for public service chief executives "won't move" in the next year, Mr Rennie told Radio New Zealand.

"Some chief executives who show very strong performance may get modest rises, other chief executives will get pay cuts."

There will be a more conservative approach over bonuses, he said.

The priority was to "recognise the very difficult financial situation that New Zealand is in" rather than maintaining equity between public and private bosses salaries.

Chief executives earn "very high levels of remuneration" compared to other public servants, Mr Rennie said.

All government agencies were living with the same amount, or less money than last year, and wage restraint was needed throughout the organisations, he said.

There must be a period of "wage restraint" which was different to a wage freeze.

"There may be situations where there is a need for wage movement, but it has to happen within the wider process of wage restraint."

Labour's state services spokesman Grant Robertson said although the increases for top public servants were agreed in different economic times, chief executives who benefited from them needed to make "fair and reasonable" offers to their staff.

"Public servants are aware that the economy is tight and they do not have unreasonable expectations, but chief executives who come forward with a pay freeze and in some cases claw back other conditions are not being constructive," he said.

"For many, industrial action is being planned, considered or taken, This is the seriousness of the situation."