State sector employees who have negotiated pay rises will get them this year but the outlook is bleak for those who haven't, Finance Minister Bill English indicated in Parliament today.
There was no pay freeze in force but chief executives had been given "a clear direction" from the Government that they should be looking at pay restraint and productivity gain, he said.
The Government would meet its obligations under agreements that had been negotiated.
"However, it will create something of a problem with fairness," he said.
"Quite large groups of state servants in this 12 months will be getting substantial pay increases.
"About half the public service will get pay increases and a good number of them increases of between 3 percent and 5 percent.
"I believe the public will not be tolerant of those groups protesting that they're not getting enough."
Mr English said the private sector was "tightening its belt" and it was not sustainable or reasonable for state service wages and salaries to continue rising at 3 percent or 4 percent a year.
"These costs are falling on taxpayers who are unlikely to be getting 3 percent or 4 percent pay rises this year," he said.
"The Government believes it is important that wage expectations in state services reflect the wider economy."
Mr English said "remuneration pressures" would not be funded through the May 28 budget and if chief executives wanted to give any pay rises that had not already been negotiated they would have to fund them through savings in their departmental budgets.
