Empower Remuneration Authority to set fair pay levels

LGNZ says the Remuneration Authority should be left to set fair pay levels for local government elected members, and given the appropriate tools to do so to reflect the challenging economic circumstances imposed by the COVID-19 emergency.

This comes as many elected members across the sector have sought to take a pay cut to reduce the burden on ratepayers, but have been prevented from doing so because this is not an option available under the Local Government Act 2002.

The Act empowers the Remuneration Authority to set zero salary increases in times of economic hardship, but it does not have the ability to allow elected members to volunteer for a pay cut.  Councillors have gotten around this by making contributions to charities, but this does not reduce salary costs on councils, or ratepayers.

LGNZ’s National Council has met on the issue, and supports the position that remuneration of elected members should be left to the Authority, and that the Authority should be given the tools that they need to deliver an equitable outcome. 

This reflects the fact that pay levels across New Zealand’s 78 local councils vary greatly from over $290,000 a year on the top end, to around just $2,000 for some rural community board members. In addition, local government elected members do not receive superannuation, sick leave, holiday pay or transition pay at the conclusion of their term. 

The Remuneration Authority does not set pay levels for local government officials, which are negotiated between the employer and employee under the existing employment relations laws.