@stefanvanderwel Do we really want the kind of talent that is attracted to money to be leading our public sectors?
I would prefer people that are human.

How much money could be saved if this policy was implemented?

$200k may be too low. A similar proposal in Ontario looked for a $418k cap. But I agree public sector salaries are out of proportion and this is something that the public could get behind. We should try to find a middle ground between reigning in excessive salaries while still attracting talented individuals.

The argument that you need a high salary to attract talent has been overused, and that high overseas salary of public officials is a fallacy.
The Mayor of New York (pop 8.3 million) gets $225,000 the Mayor of Auckland (pop 1.3 million) gets $250,000

Firstly, you need to recognize that these CEOs aren't mindless morons, who's job anyone could do.

They're hardworking, require discipline and a lot of experience.

Secondly, if you cap the pay, then why would these guys work as a CEO of a public sector organization, when they can work in private sector? The only people you are going to attract with the lower salary, is people who are unable to attract the higher salary positions.

I suggest watching this Ted Talk. I

https://www.youtube.com/watch?v=bfAzi6D5FpM

It pertains to how much we pay charity CEOs, but the idea is still the same.

That said, I appreciate that there might be a dissonance between pay and performance, but we shouldn't be afraid of paying high salaries.

The only people you are going to attract with the lower salary, is people who are unable to attract the higher salary positions.

That happens to be wrong. CEO salaries are different the world over and it's only in the US where they're paid four hundred times the median wage and it's only in the US where the CEOs are, essentially, worthless. Japanese CEOS, paid only forty times the median wage, do far better.

Oh, and $200k is still a very high salary.

@dennisdorney I think we need to do both.

Great idea. Public service should mean you serve the public, not the other way around. Cap that shit so we can have confidence only true servants of the public take up the roles.

I think it should be gauged by a factor of the performance of their post. That way they will have incentive to do the best job possible.

People looking to work in public service and state sectors normally have a passion for that line of work and there is normally plenty of applicants for those wishing to follow their dreams and they deserve to be paid well for it. At the same time these Jobs should not be looked at for profiteering yet as an advancement of one's passion. The real people, the people that have this passion will turn up. 200K is enough for the right person.

@davidwong (I think that means you do agree - that it should be tied to a set multiple of basic income, such as 10x minimum wage or the lowest paid)

@williamasiata your right :)

i disagree if they have got it I want it to
all but the privileged few have a pay cap now its fixed by immigration New Zealand and set at an artificially low figure which triggers an increased supply of immigrant labour at what ever that number is which is why our wages are so low an engineer working for Transfield Worley can travel from New Plymouth to Perth to do the identical job in fact work on the same project and triple their salary overnight we are all being scammed public servants should be treated the same or alternatively everyone else should be treated the same as the public servants this is just another tall poppy attack I say if they've got it I want it to not the other way around

Andrew Love you really are in dream world no one in NZ is paid on merit IMNZ interferes with the labour market to keep wages down and yes successive governments have been responsible you can actually track it by graphing wage movements compared to Australia starting in 1950 until today you can see when they started doing it

..and a majority of those high salary earners in public and state sectors are incompetent.

@theworkingpoor "..and a majority of those high salary earners in public and state sectors are incompetent."

Yes, because I could earn $110k in the public sector doing what I'm doing, and still be a "over $100k wasteful worker" or do the same thing for $150k+ in the private sector. Only the incompetent or lazy aim for the $40k pay cut available in the public sector. So the pressure for limited pay leads to poor workers, which leads to more pressure for limited pay, and we'll never get good workers in the public sector.

The other result is that the contractors for the government make $250k, delivering $50k worth of services because the pay caps made the government cut all competent people from the department, so only the incompetent are left, and the contractors can charge anything they want because the government can't do it without them.

Neither of those sounds like a good idea. But go ahead, cause taxes to rise and services to be cut because you have an irrational hatred of those who make more than you.

Maybe we could somehow encourage the private sector to also limit the top salaries they produce, and encourage redistribution of the earnings within a company to either the lower wage workers, or to business expansion or to other community development projects. It could be a good complement to this proposal in that both private and public sectors are addressed, though it also has a communist/forced collectivity feel to it...
It is tricky to determine how to apply sanctions to private sector income, especially considering the diversity of ways that one can create a living - eg waged, salary, buy/sell/value adding profit/stocks and shares, etc.
And thus as @dennisdorney & @mattkraemer prefer, a higher taxation rate on high incomes becomes a straightforward alternative.

PS.Also, I really do think we have to discuss competence and quality in public (and private) agencies. Actually the notion of 'merit' in a just society should work both ways.

This is a great way to keep salary costs down and then the cost of public services and utilities. Any idea how many more buses and drivers we can employ by just reducing salaries of the top 10 in Auckland Transport. Cost management of private sector for basic services/necessities will need to be developed as well. Pointless exercise to increase wages only to see costs go up as well. I would like to see this go into policy.

Only the incompetent or lazy aim for the $40k pay cut available in the public sector.

Nope, there's also the people who do it because it's a) what they want to do b) because it's the right thing to do and c) because they want to make society better.

Despite what the economists say not everyone works for money alone.

oh, and this:
http://www.abc.net.au/science/articles/2013/10/01/3859819.htm

I have thought that the corporate tax rate could reflect this ratio as a way of encouraing restraint in executive wages.

What is shaved off the top earners could be distributed between the lower wage earners (a living wage = $20 per hour/41K per year) Everybody wins because not everyone wants that much responsiblity or to start out with so much student debt (now days) - I say 150K - 200K is a great salary for 40 hours a week. The chances of the actual hours being 40? Salary is a flat rate.

@davidwong I also was for using the ratio within a company rather than the minimum wage but then that would just allow the company to break into smaller dependant companies with those on low wage in one and a management one with high wages

@fredlook not sure how prevalent this would be, but I would say it would be a small percentage.

@davidwong the infamous 1%. :)

@williamasiata I think for this proposal to work you would need other incentives other than monetary to attract good people. This could be less buracracy, flat management structures, give people a say in how company works, workers agree pay for management etc.

@davidwong yes yes !

@marcwhinery I apologize that you mistake my dislike for greedy people as a hatred for those that earn more than me. I apologize that I find the vice chancellor of Auckland Universities salary for example, taking a cap could cause taxes to rise and services to be cut.

A majority of these public/state sectors lack resources and quality customer /public services.. or more so, just good old customer services. A cap off the high earners would be distributed within that dept and services would improve.

Those who work and study hard to gain university degrees/masters in order to land high salary paid jobs, know that yes the degree and masters help however, like many jobs whether min waged or salary of a king, it comes down to who you know not what you know.

In regards to the lazy incompetent aiming for a cut..read Draco's @colinengland post.

@davidwong

This could be less buracracy, flat management structures, give people a say in how company works, workers agree pay for management etc.

Something like this perhaps?
http://www.mixprize.org/story/collaborative-funding-dissolve-authority-empower-everyone-and-crowdsource-smarter-transparent

@theworkingpoor " I apologize that I find the vice chancellor of Auckland Universities salary for example, taking a cap could cause taxes to rise and services to be cut."

We can get the general idea of what you mean, but any nuance is lost when your edited sentences fail to be sentences.

"A majority of these public/state sectors lack resources and quality customer /public services.. or more so, just good old customer services. A cap off the high earners would be distributed within that dept and services would improve."

Of those who see their salary capped would move on, and the lack of experience and direction in management would result in poorer services, and inefficiencies that drive greater cost.

"Those who work and study hard to gain university degrees/masters in order to land high salary paid jobs, know that yes the degree and masters help however, like many jobs whether min waged or salary of a king, it comes down to who you know not what you know."

That's the good ol' boys club, not salary/salary caps. I got my masters, and have 20+ years experience doing some interesting things, but I usually see that those I report to do a worse job than I would. Usually it's luck of knowing the right person, who takes them with them to a new job, getting them a new job for who they know, not what they know.

Of course, none of that matters for senior management. Almost all of them come from rich families. They get experience starting small companies and running them into the ground. I could name a few I've seen run into the ground by trust-fund babies, only to leave the company dead, with redundant employees, while the CEO/MD runs off to another top management position.

They are the ones that get on boards of directors and vote their fellow CEOs raises, knowing they'll get the same later, as CEOs/members of the board are an inbred group.

The fix for that is that nobody should serve on a board who has any pay for any other activity that is determined by a board. But that'd never happen. As the people that would affect have enough money to buy whoever they need to prevent that.