26 September 2023

NEW ZEALAND: Contractor wage bill under review

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New Zealand’s first benchmarking survey of contractor pay in the Public Service has found rates ranging from close to the minimum wage on helpdesks to as high as $NZ185 ($A172) an hour in IT — or almost $NZ1,500 ($A1,400) a day, before tax.

The benchmarking is being introduced four years after the Government vowed to rein in escalating spending on contractors and consultants.

The exercise found the billion-dollar spending on contractors is falling, helped by a massive $NZ70 million ($A66.3 billion) cut at the Inland Revenue Department, more than making up for rises at the Departments of Health and Education.

Overall, core Public Service spending was down three per cent in the past financial year.

Even non-core Agencies like the police, the Transport Agency and the Defence Force are reining it in, despite the pandemic.

However, until now, contractor and consultant rates have not been tracked, so it has been hard to tell how fast they are rising compared to employees’ pay.

The benchmarking, by the Ministry of Business, Innovation and Employment, sets out the range of what is paid for 20 of the most commonly contracted jobs.

It covers almost 22,000 contracts over 18 months up to last December.

Unsurprisingly, the 10 IT jobs measured paid significantly better on average than the 10 administrative and corporate jobs.

Highly specialist jobs, such as hardware engineers, were not covered.

The large number of relatively lowly paid administrators, 3,400, skewed the results.

In IT, nine out of 10 jobs usually paid more than $NZ100 ($A93.32) an hour, as well as half the administrative and corporate jobs.

Project management and policy research and evaluation jobs generated more than 1,000 contracts each at solid rates.

In the middle of the pack, a marketing and communications contractor’s take-home pay was similar to a business analyst at a median of $NZ112 ($A104.52) an hour.

Wellington, 17 March 2022

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