NZ PM Jacinda Ardern, Cabinet slash own salaries by 20% as COVID-19 hits economy

WELLINGTON: Setting precedent for leaders around the world, New Zealand Prime Minister Jacinda Ardern said Wednesday she and her Cabinet members, as well as top public servants, would be taking "a 20% pay cut for the next six months" in an act of solidarity as the coronavirus pandemic hit global economies and brought a wave of unemployment.

"We acknowledge New Zealanders who are reliant on wage subsidies, taking pay cuts, and losing their jobs as a result of COVID-19's global pandemic," Ardern told the media. She would bear a loss of about NZD47,000 (Rs4,706,000) over the six months.

"We feel acutely the struggle that many New Zealanders are facing and so, too, do the people that I work with on a daily basis. And while it in itself won't shift the government's overall fiscal position, it is about leadership," the centre-left leader said.

She acknowledged that this was a great time "to close the gap between groups of people" in her country but emphasised that the pay cuts would not be implemented across the board in the public sector.

"Of course, many people in our public sector are our frontline essential workers, nurses, police, healthcare professionals. We are not suggesting pay cuts [for them]," she added.

The country has imposed a four-week lockdown to combat the deadly COVID-19 but the closure has paralysed the economy, with thousands of jobs losses already announced.

Economic modelling released by the Treasury department this week predicted unemployment — currently about 4% — could soar to almost 26% in a worst-case scenario.

"I'm responsible for the executive branch, myself and ministers, this is where we can take action and that is why we have," Ardern noted.

(NZD1 = Rs100.13)

—Additional input from AFP