Ministry of Finance and Economic Management financial secretary Richard Neves says the Cook Islands cannot accommodate increasing public sector wages on the basis of cost of living adjustments as the Cook Islands Workers Association (CIWA) is demanding.
This comes as a response to a story in CINews last Thursday, when CIWA president Anthony Turua said he was deeply concerned that increases in the cost of living have not been addressed in the last six years.
Turua said CIWA would like Neves to take another look at the pay scale to ensure that inflation and the cost of living are being addressed annually and to give workers fair, equitable and just earnings.
However Neves told CInews that in outlining the CIWA case for an increase in public sector wages, Turua could leave readers with the impression that public servants have suffered a significant decline in their wages in the previous five years.
“In 2011/12 the total public sector wage bill (including State Owned Enterprises (SOE’s) in 2010/11) was $53.7 million ($45.5 million excluding SOE’s), a 6.5 per cent increase on the 2008/09 public sector wage bill of $50.4 million ($44.3 million)”, said Neves.
In that period around 1,750 people worked in the public sector – excluding State Owned Enterprises, he said.
In CINews last week, Turua outlined that the Cook Islands should look to New Zealand and Australian frameworks for setting wages.
But Neves said cost of living adjustments in public sector pay packets are from a ‘bygone era’ and have not been a feature of the wage setting environment in Australia and New Zealand for a number of years.
“In Australia the bargaining framework is quite clear, heads of agencies must provide for pay increases within existing budgets and cannot come at the expense of programme funds,” said Neves.
In New Zealand, the State Services Commission outlines that cost of living adjustments are not a sufficient reason for the provision of a pay rise and that ultimately any adjustments must be affordable and within baseline funding, he said.
“Ultimately the tax base of the Cook Islands cannot accommodate increasing public sector wages on the basis of cost of living adjustments as CIWA is demanding.
“A wide ranging increase of wages cannot come without a significant improvement in productivity of the public sector. In this respect Mr Turua is correct in looking to the Australian and New Zealand models for guidance in this area.”