Analysis shows pay equity settlements over four years
would have:
– Created 13,000
jobs
– Grown GDP by $13.5 billion or
0.6%
– Increased tax revenue by $5
billion
Fresh analysis by the PSA of
Treasury’s own modelling shows the Government’s decision
to cancel pay equity claims under urgency in May 2025 was an
economic own goal, one that has cost the country billions of
dollars in lost growth, lost jobs and lost tax
revenue.
The analysis, based on Treasury’s own MATAI
macro-economic model, shows that reinstating pay equity
would grow the economy by $13.5 billion over four years and
create around 13,000 jobs. It would also generate an extra
$5 billion in tax revenue, reducing the net fiscal cost of
pay equity to $6 billion over four years, or $1.5 billion a
year.
“Low paid women workers have paid the price for
a decision that was all about making the Budget numbers
work, without a considered assessment of the economic upside
from the significant income boost that would flow from pay
equity settlements,” said Fleur Fitzsimons, National
Secretary for the Public Service Association Te Pūkenga
Here Tikanga Mahi.
“Our analysis shows the Government
had a genuine opportunity to grow the economy, create jobs
and boost tax revenue by continuing with pay equity
settlements, and it walked away from it.
“This was
short sighted economic management, plain and simple,
depriving over 150,000 women of the pay rise they need and
deserved.”
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Treasury’s own figures show pay equity
delivers a return of $2.25 for every dollar of net
government spending, a stronger return than other major
Budget initiatives.
The 0.6% increase in GDP from pay
equity outperforms other less effective Government growth
policies. By comparison, Treasury modelling shows the
Government’s Investment Boost policy generates just $6.4
billion in GDP growth (0.3%) from a $4 billion net spend; a
return of just $1.6 for every dollar spent.
“Pay
equity isn’t just the right thing to do for women who have
been underpaid for years, it’s also better value for the
taxpayer than some of the Government’s own flagship
policies,” Fitzsimons said.
“The actions of the
Government in cancelling pay equity claims and gutting the
Equal Pay Act 1972 were an act of constitutional vandalism
and wage theft which must be overcome. We will leave no
stone unturned until New Zealand women receive pay equity
starting with care and support workers many of whom are now
back on the minimum wage.
“We need to see clear
commitments from opposition parties to pay equity which
means and properly accounting for it in their fiscal plans
and fixing the Equal Pay Act 1972.
“Low- and
middle-income workers spend the money they earn in their
local communities. That spending supports local businesses
and creates local jobs. This Government keeps choosing
policies that don’t deliver anywhere near the same bang
for buck, simply because it prioritised tax cuts for
landlords over our nation’s working women.”
With
unemployment rising to a decade high and the economy
struggling, the analysis is a reminder of the cost of the
Government’s decision.
“The Government says growing
the economy is its top priority, but it turned down a $2.25
return on every dollar. That’s not economic management;
it’s an own goal.”
