Public Service workers and supporters rally under Public Service Association (PSA) banners outside the Bridge of Remembrance in Christchurch during nationwide strike action on 9 September 2026.

Nearly 10,000 public servants took strike action across New Zealand on 9 September, including more than 5,000 at the Ministry of Social Development, around 2,700 at MBIE and more than 1,300 across Internal Affairs, NEMA and the Ministry for Ethnic Communities. Their complaint is not difficult to understand. Public Service wage rates rose just 1.3% in the year to June 2026, while inflation was 4.1%. The PSA says most immigration officers involved in the MBIE action earn around $70,000.

If your pay rises by one or two percent while living costs rise much faster, eventually the supermarket checkout begins offering its own economic commentary. Public servants have a case. The Government argues that public-sector settlements must also remain fiscally sustainable as it attempts to restrain spending and reduce the size of the core Public Service.

But they are not the only people at the bargaining table. There is another participant. He seldom gets a placard or a megaphone. He does, however, bring the wallet.

The Taxpayer.

The Missing Chair

Public-sector pay negotiations are peculiar things. In a private business, workers can demand more money, but somewhere nearby sits a customer with the irritating ability to say no. Raise prices too far and customers leave. The Ministry of Social Development is unlikely to wake up tomorrow and discover its customers have defected to a rival welfare department offering faster service and a loyalty card.

Government is different because many of its services must exist and cannot sensibly be provided through ordinary competition. That does not make money free. Good public servants also cost money. Government competes for lawyers, economists, engineers, IT specialists and analysts. Let real wages fall far enough and some will discover that Australia has both sunshine and job advertisements.

Higher pay can therefore help productivity if it retains skilled staff. So this is not an argument for freezing wages until morale improves. It is an argument that taxpayers are entitled to ask:

What are we getting for the money?

Public Servants See the Problem Too

New Zealand is a developed country with a chronic productivity problem. The OECD says labour-productivity growth has weakened over the past two decades and remains below both the OECD average and comparable small advanced economies. That is not the fault of public servants alone. But government cannot reasonably declare itself a productivity-free zone.

In the 2025 Public Service Census, 49% said staffing levels and work volumes were a major barrier to performing at their best. That supports the unions. Removing three people and expecting seven to do the work of ten is not productivity. It is a staffing cut with an optimistic spreadsheet.

But the same survey found 37% blamed complicated or unnecessary processes and 34% pointed to inefficient decision-making. Public Service Commissioner Sir Brian Roche has likewise criticised fragmentation, silos, excessive process and slow adoption of technology. There, in a few numbers, is almost the entire argument. Some teams may need more people. Others may need fewer processes and faster decisions. The workers and the taxpayers may both be right.

An Expensive, Skilled Workforce

The average Public Service base salary in 2025 was $103,300, compared with an estimated $85,700 in the private sector. That looks dramatic. It also demonstrates why statistics should be allowed to finish their sentence. Around 65% of respondents to the 2025 Public Service Census had a bachelor's degree or higher, compared with 38% of the wider workforce. The figures do not prove that identical workers receive a 20% premium because one has found a government lanyard.

But $103,300 is not meaningless either. It tells us the Public Service is already an expensive, skilled workforce. Taxpayers are entitled to expect that investment to purchase capability.

Salary is only part of the package. At June 2025, 95.4% of Public Service employees were permanent, flexible working was common and average tenure for permanent employees within an organisation was 8.3 years. That does not mean public servants live in an employment paradise. Restructures and job losses are real. The point is simply that pay, security, flexibility and conditions all have value.

The Consultant in the Next Office

Then we reach one of Wellington's great renewable resources.

The Consultant.

Public Service organisations spent a combined $611.1 million on contractors and consultants in 2024/25 — $352.6 million in operating expenditure and $258.5 million in capital expenditure. To its credit, that was 35% lower than the $940 million spent the previous year. Contractors are not automatically wasteful, and government does not need to permanently employ every specialist required for a temporary project.

But $611 million still buys rather a lot of expertise. The question is whether contractors fill genuine temporary gaps, or whether departments repeatedly buy capabilities taxpayers might expect a large, highly educated permanent workforce to possess internally. If better wages help retain that expertise, higher salaries may be money well spent. If salaries rise and the same consultant invoices continue arriving, taxpayers might reasonably ask for the receipt.

The same test should apply elsewhere. Agencies spend staff time and resources on Māori-Crown capability, te reo Māori, diversity initiatives and employee networks. These are not all the same: Māori-Crown capability has an explicit statutory basis, while initiatives such as employee networks and some diversity programmes are largely policy and management choices.

The useful question is simple: Does it work? If training improves services, show the improvement. If employee networks improve retention, measure the saving. If an activity consumes taxpayer-funded hours and money without producing a defensible public benefit, ask why it continues. Government does not escape scarcity merely because its stationery has a coat of arms.

A Productivity Bargain

None of this means the Public Service is failing everywhere. The latest Kiwis Count survey found 81% of respondents were satisfied or very satisfied with their most recent government service. The job is not to assume everything public is useless and replace every bureaucrat with an app before morning tea.

Nor is cutting staff automatically productivity. If ten workers process 1,000 applications and eight later process 600, the payroll is smaller but the service is worse. If better software, simpler rules and fewer approvals allow eight workers to process 1,200, that is productivity.

The Government wants the core Public Service reduced to no more than 55,000 FTEs by July 2029, from more than 64,000 this year. Whether that produces better government or merely smaller government depends on what happens to output. The same applies to pay.

Public servants should not be expected to accept declining real wages indefinitely. If New Zealand wants capable people performing difficult work, it has to pay for them. But higher pay should come with a productivity bargain: simpler processes, less duplication, stronger internal expertise, better technology, faster decisions and a willingness to stop doing things that cannot justify the resources they consume. Public servants themselves are already complaining about much of the bureaucracy. That should make reform easier, not harder.

Fairness Runs Both Ways

The people who walked out on 9 September have a legitimate case. Their recent wage growth has fallen well behind inflation, and some are carrying workloads they believe have become unreasonable. But the people paying their salaries face the same petrol prices, electricity bills, mortgages, rents, rates and grocery costs.

Many work in businesses where losses cannot simply be covered by another appropriation from Parliament. Enough bad years mean cancelled investment, redundancies and, eventually, businesses that cease to exist. Public servants should not be punished because their employer happens to be government. Neither should public employment become a one-way bargain in which every increase in cost is treated as an entitlement while questions about output become indecent.

There are three parties at this table: the Government, the workers and The Taxpayer quietly reaching for the bill. Public servants are right that real wages matter. Taxpayers are right that productivity matters. A sustainable Public Service has to care about both.

Public servants have every right to ask whether New Zealand is paying them fairly.

The rest of New Zealand has every right to ask what it is getting in return.