Jacinda Ardern and ministers take pay cut in solidarity with those hit by Covid-19

New Zealand’s prime minister has said she and other ministers will take a 20% pay cut lasting six months to show solidarity with those affected by the coronavirus outbreak, as the death toll continues to rise.

Jacinda Ardern said it was important the government’s most highly paid politicians show “leadership and solidarity” with workers on the frontline and those who had lost their livelihoods. Ardern, government ministers and public service chief executives will take the cut for six months, effective immediately.

The pay cut will reduce Ardern’s salary by $47,104. Cabinet ministers would take a cut of NZ$26,900 each, while deputy prime minister Winston Peters’ salary would be cut by $33,473.

Dr Ashley Bloomfield, the director-general of health who has led the elimination response to the crisis, confirmed he would “definitely” take a pay cut too, as would opposition leader Simon Bridges.

Ardern said: “If there was ever a time to close the gap between groups of people across New Zealand in different positions, it is now. I am responsible for the executive branch and this is where we can take action … it is about showing solidarity in New Zealand’s time of need.”

Ardern accepted the cut would not influence the government’s overall fiscal position: “This was always just going to be an acknowledgement of the hit that many New Zealanders will be taking at the moment.”

New Zealand has been in full lockdown for three weeks, meaning no one is allowed to leave their homes except for necessities or a brief respite of fresh air. More than 1,300 people have been infected with the virus, and there have been nine deaths, all older people with pre-existing health conditions.

A total of 1.5 million people have claimed the government’s wage subsidy to help them weather a temporary loss of income. Modelling from Treasury has suggested that a prolonged and strict lockdown could see one in four New Zealanders out of work in the worst-case scenario. A swift end to the lockdown along with a further government stimulus package could reduce joblessness to 8.5%. Currently, unemployment stands at 4%.

The International Monetary Fund is forecasting that the New Zealand economy will shrink by 7.2% this year. In its World Economic Outlook, it says New Zealand will see the biggest economic contraction outside Europe, except for Venezuela.

Also on Wednesday, the epidemic response committee heard from major media players about the challenges they were facing under lockdown, which had seen Stuff and NZME lose more than 50% of their advertising revenue, and NZME lay off 200 staff and order those remaining to take a 15% pay cut for three months.

Stuff chief executive Sinead Boucher told the committee that 2 million New Zealanders visited its website every day, and it and other domestic news media were playing a “crucial” role in providing quality news throughout the crisis, and debunking fake news that had mushroomed online.

“There is an immediate need to survive these next few months,” Boucher said, adding she was unable to rule out redundancies. “There needs to be some kind of ongoing government support for a commercial media industry in New Zealand.”

A government rescue package for the media is expected this week.