New Zealand Prime Minister Jacinda Ardern said Wednesday that she and other top officials will take a 20 percent pay cut for the next six months in a display of solidarity with people who are losing income because of the pandemic.
“We feel acutely the struggle that many New Zealanders are facing,” Ardern, who is up for reelection in September, said in a news briefing that was live-streamed on Facebook. “If there was ever a time to close the gap between groups of people across New Zealand in different positions, it is now.”
Ardern’s annual salary is 459,739 New Zealand dollars (about US$279,000), meaning she would lose 45,573 New Zealand dollars over a six-month period, the New Zealand Herald reported. Government ministers in Ardern’s cabinet and public service chief executives will also see an equivalent pay reduction, effective immediately.
Though the amount of money saved on their salaries won’t have much of an impact on the government’s overall fiscal health, “it’s about leadership,” Ardern said. “This was always just going to be an acknowledgment of the hit that many New Zealanders will be taking at the moment.”
New Zealand has been under strict shelter-in-place orders for three weeks, and is expected to weather a crushing economic blow from the pandemic. The International Monetary Fund predicts that the country’s economy will shrink by 7.2 percent this year, the largest contraction expected outside of Europe and Venezuela.
If tough lockdown measures remain in place past the end of this month, New Zealand’s Treasury anticipates that one in four residents could be left jobless. Ardern has indicated that her government will make a decision about whether to extend the shutdown by April 20. “We are very aware of the need to get our economy running as soon as possible,” she said on Monday.