Lloyd Burr: Pay equity law - when is a pay cut not a pay cut?

Tuesday, 13 May 2025

ANALYSIS: It’s been a week since pay equity legislation was thrown on the bonfire and a rewrite passed under urgency in order to save billions for the Budget. Now the debate has turned into one of semantics over what constitutes a pay cut. Senior Reporter Lloyd Burr takes a look.

When is a pay cut not a pay cut? That’s where the debate currently is over the Government’s controversial move to scrap pay equity legislation and replace it under Parliamentary urgency.

It has meant 33 groups that were in the process of negotiating a pay equity settlement will have to go back to the start line and start again, and they’ll likely get less money than they would’ve under the previous system.

Labour leader Chris Hipkins is calling this a “pay cut for women”, and many of his MPs have been sending out newsletters calling it that.

Prime Minister Christopher Luxon has fired back, calling Labour’s attacks “outlight lies”, and is steadfast that his Government “is not cutting women’s pay”.

Essentially, it’s become a debate about semantics.

Luxon is right that he is not cutting the current pay of any women. He’s right that women who re-submit an equal pay claim will likely get a pay rise, not a pay cut.

“We’re not cutting equal pay. It was a very flawed system and we’re fixing it,” Luxon told reporters at Parliament on Tuesday. “We’ve put money aside for it and the costs are lower than they were under the old regime and that releases billions for the Budget”.

But Hipkins is correct too. The pay rise women will get under the new law won’t be as much as it would’ve been under the old law, and hence it’s a cut to what they would have been paid.

“You can’t say it’s going to rise by the same amount if you’re taking billions of dollars out of the Budget to pay for it. It means pay will be rising by a lot less. That means women’s pay is being cut,” he says.

Each side is now accusing the other of gaslighting the public, and of lying to the public. In politics, using the ‘L’ word is a big deal and it’s not used lightly.

“It’s a terrible shame Labour’s resorting to lies and misinformation, frankly,” says Luxon.

“They’ve been lying to New Zealanders all along,” says Hipkins.

Turning the debate into one of semantics might work in the Government’s favour because it muddies the water, makes it confusing, and makes the Opposition seem like nit-pickers.

But the truth of it is this: Women who were in the process of a pay equity claim with the government will get a pay rise under the new system, but it won’t be as much and it will take much longer to get.