Pay transparency is vital to reduce inequality

The Green Party today welcomed calls for a conversation about public sector pay caps, but stressed that the conversation must also include pay transparency and the ratios between the highest and lowest incomes, as part of a larger plan to address inequality in New Zealand.

“Addressing huge rises in public sector CEOs’ pay is a step in the right direction, but what’s really needed is a comprehensive plan to reduce inequality in New Zealand,” said Green Party Co-leader Metiria Turei.

“Transparency, honesty, and accountability across the entire pay scale in both the public and private sectors is vital to reducing inequality.

“The Green Party would require all large, publicly listed companies in New Zealand to report on the pay ratio between their highest, middle, and lowest paid workers, and we would legislate to make sure workers have a representative on the committee that sets their executive’s pay.

“With tens of thousands of public and private sector workers entering pay negotiations this year it’s vital that these negotiations begin from a foundation of transparency, and that everyone’s contributions to organisational performance are fairly rewarded.

“Pay ratios need to be part of the conversation, because just talking about percentages doesn’t address inequality.

“We need to address growing inequality in New Zealand by ensuring that everyone’s income is enough to meet their needs and the needs of their families, and also by halting the rapid rise in the salaries of executives.

“The conversation about how to fix worsening pay ratios should have begun years ago, not just now that MPs’ pay is in the spotlight.

“In 2002, a CEO’s average pay was 15.2 times the national average workers’ income, but by 2012 the CEOs of the top listed New Zealand companies were earning 26.4 times as much as their average employees.

“Performance is achieved by whole organisations working together, not just the CEO,” Mrs Turei said.