New Zealand gender pay plan: government hopes to go from laggard to leader

By Stephen Easton

Monday July 30, 2018

Office life: young secretary knocking on her boss? door

The New Zealand government aims to have an equal number of male and female public service leaders by the end of next year, and close job-specific gender pay gaps within 12 months after that.

There will be “no gender pay gaps in starting salaries for the same roles” anywhere in the government by the end of this year, and “all agencies will have closed any gender pay gaps within the same roles” by the end of 2020, according to Minister for State Services Chris Hipkins and Minister for Women Julie Ann Genter.

The government wants all “gender pay gaps within the same roles” to be closed in two-thirds of agencies by the end of 2019.

Jobs in all government agencies will be “flexible by default” and women will hold half of all jobs in the top three levels of the public service hierarchy by the time 2020 rolls around, assuming the ambitious plan succeeds.

There is some confusion in the action plan’s timeline, however. It states that “by the end of 2019 at least 15 agencies will be piloting flexible-by-default approaches” and that this will be the policy in all agencies “by 2020” — the same point in time as the end of 2019, to most English speakers.

Two other goals are set for the middle of 2020: “all agencies will have remuneration systems and human resource practices designed to remove bias and ensure transparency” and “all managers will understand the impacts of bias and be equipped to address it” by that point, according to the brief strategy.

“The Action Plan will accelerate action across the public service to address the underlying workplace culture issues that drive the gender pay gap,” said Hipkins.

“This is a critical piece of work that ensures everyone in our Public Service is paid fairly for the role they do.”

Government workforce statistics show the gender pay gap in the public sector was 12.5% and falling last December, compared to a 9.4% gap across the general population of NZ, which has also been trending downwards.

8.4% gender pay gap in APS base salaries

Both gaps are also slowly getting smaller across the Tasman but the situation is reversed; the Australian Public Service most recently posted an 8.4% gender pay gap in terms of average base salary, and the Workplace Gender Equality Agency last calculated the national figure at 15.3%.

In most Australian state governments, the gender pay gap for the public sector sits below that for the wider economy although this is not always the case. In South Australia, it was much higher in government when we last looked.

This year’s APS remuneration report, only the second to include the figure, showed it had narrowed by 0.2% in the last year. The report also shows there is already gender parity in the highest-paid quartile of the APS, but women predominate both overall and, therefore, in all the lower pay quartiles.

This suggests, perhaps counter-intuitively, that a final push to reduce the pay gap figure would require more men going into lower-paid APS jobs, and more women taking jobs in other sectors instead.

APS employees by pay quartile and gender, 2017. Image: Australian Public Service Commission.
“This suggests, perhaps counter-intuitively, that a final push to reduce the pay gap figure would require more men going into lower-paid APS jobs, and more women taking jobs in other sectors instead.

For leaders across the NZ State Services, collectively getting the gap down from somewhere above 10% to zero by the end of 2020 would clearly require some extraordinary efforts, although that isn’t precisely the aim of the plan.

In the year 2000, the gap was about 18.6% and had closed to 13.5% in December 2016, only one percentage point above the most recent figure.

The Minister for Women hopes the government can pull this off and go from laggard to leader.

“Government has a leadership role to play to ensure that women are treated fairly,” said Genter.

“As responsible employers, government can demonstrate what works and get the private sector on board. This plan sets the direction of travel for government departments to start fixing the pay imbalance.”

Action plans for gender balance

State Services Commissioner Peter Hughes has the job of overseeing the efforts of individual chief executives to cut down the gender pay gap in their agencies. Each agency now has to adapt its own action plan for gender balance, the first of which will be published by the end of this year, according to Genter.

“All agencies will undertake standardised measurement of gender pay gaps for the same roles so these can be corrected in the next remuneration round,” she said.

“In 2018 its unacceptable that women are still concentrated in lower-paid occupations, under‑represented in leadership while at the same time doing the majority of unpaid caring responsibilities.”

Hipkins added that the plan for rapid action on gender equity in the public sector reflected the broader set of Gender Pay Principles recently espoused by the Ardern government.

The figures have been moving in the right direction over recent years: as of last December women held 48% of senior NZ public service roles, up from 45% the year before and 38% at the end of 2008. In that time, the overall proportion of public servants who are women has barely moved, from 59% to 61%.

The latest stats also showed 41% of chief executives were women compared to only 23% in 2008, when the former National Party government led by John Key came to power, ending the Labour Party’s last nine-year run in office.

However, as the figures from the APS suggest, reducing the gap in average earnings can become increasingly slow going as the workforce approaches gender parity in terms of senior appointments, assuming it remains predominantly female overall, given the way hierarchies work.

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