New Zealand Prime Minister Jacinda Ardern yesterday said that she and other ministers would take a 20 percent pay cut lasting six months to show solidarity with those affected by the COVID-19 outbreak, as the country’s death toll continues to rise.
Ardern said that it was important the government’s most highly paid politicians show “leadership and solidarity” with workers on the front line and those who had lost their livelihoods.
Ardern, government ministers and public service chief executives are to take the cut for six months, effective immediately.
Photo: AFP
The pay cut would reduce Ardern’s salary by NZ$47,104 (US$28,260). Cabinet ministers would take a cut of NZ$26,900 each, while New Zealand Deputy Prime Minister Winston Peters’ salary would be cut by NZ$33,473.
New Zealand Director-General of Health Ashley Bloomfield said that he would “definitely” take a pay cut, too, as would opposition National Party leader Simon Bridges.
“If there was ever a time to close the gap between groups of people across New Zealand in different positions, it is now. I am responsible for the executive branch and this is where we can take action... It is about showing solidarity in New Zealand’s time of need,” Ardern said.
Ardern said the cut would not influence the government’s overall fiscal position.
“This was always just going to be an acknowledgement of the hit that many New Zealanders will be taking at the moment,” she said.
New Zealand has been in full lockdown for three weeks, meaning no one is allowed to leave their homes except for necessities or a brief respite of fresh air. More than 1,300 people have been infected with the virus, and there have been nine deaths, all older people with pre-existing health conditions.
A total of 1.5 million people have claimed the government’s wage subsidy to help them weather a temporary loss of income.
Modeling from the New Zealand Treasury has suggested that a prolonged and strict lockdown could see one in four New Zealanders out of work in the worst-case scenario.
A swift end to the lockdown along with a further government stimulus package could reduce joblessness to 8.5 percent. Unemployment currently stands at 4 percent.
The IMF has forecast that the New Zealand economy would shrink by 7.2 percent this year. In its World Economic Outlook report, it says that New Zealand is expected to see the biggest economic contraction outside Europe, except for Venezuela.
Also yesterday, the New Zealand Epidemic Response Committee heard from major media players about the challenges they were facing under lockdown, which had seen Stuff and NZME lose more than 50 percent of their advertising revenue, and NZME lay off 200 staff and order those remaining to take a 15 percent pay cut for three months.
Stuff chief executive officer Sinead Boucher told the committee that 2 million New Zealanders visited its Web site every day, and it and other domestic news media were playing a “crucial” role in providing quality news throughout the crisis, and debunking fake news that had mushroomed online.
“There is an immediate need to survive these next few months,” Boucher said, adding that she was unable to rule out redundancies.
A government rescue package for the media is expected this week.
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