Prime Minister Chris Hipkins has stressed that the Government "don't have a money tree" amid teachers and nurses strikes.
It comes as a year-long teachers dispute might be resolved — with warnings it could lead to cuts in other areas of education.
An independent review panel recommended yesterday that the Government offer secondary teachers greater pay than what has been offered by the Ministry of Education.
The recommendation is for a 6% pay increase which would be back-paid from July 3 this year, a 4% pay rise on April 3 next year and a 3.9% pay rise on December 2 2024.
Secondary teachers' base salaries would increase by 14.5% over the collective agreement period.
Asked about possible cuts in other areas to fund the move, Hipkins told Breakfast this morning: "That's a process that we're going through at the moment.
"It comes with a very big price tag, multi-billions of dollars. That's not the sort of money you find down the back of the couch."
Hipkins said the Government has approached negotiations in good faith, but the union has disputed this, arguing against taking money from another part of the education budget.
"I think every part of the public service would argue that they need more money," Hipkins said.
A pay rise of 14.5% over three years is now being recommended. (Source: 1News)
"We're not going to take the money from health in order to fund education.
"Governments have to ultimately make the books balance, we don't have a great money tree in the backyard that means we can continue to indefinitely increase government spending, we have to pay for everything somehow.
"We're working through how we would pay for this recommendation that's come out of arbitration."
Asked about Labour's tax policy, Hipkins said: "There are a whole lot of problems with a wealth tax. I'm not proposing to increase taxes.
"In fact, Labour's been pretty clear that we're opposed to tax cuts, which is what's being proposed by other parties."
Hipkins was also asked about Hawke's Bay DHB calling for volunteers to staff the hospital during an upcoming nurses strike.
Yesterday, nurses and healthcare assistants employed by Te Whatu Ora voted to accept a pay equity settlement — but strikes are still possible, as they have yet to vote on the separate collective agreement offer.
The total value of the pay equity settlement, including payments made early this year, is $4 billion.
"I haven't got details on the specific request in the Hawke's Bay, but what I do know is that where nurses are planning industrial action, contingency plans are put in place," Hipkins said.
"Whenever they've gone on strike, there has been a process of rostering on volunteers to stay and continue to work to make sure that people who are in a critical condition and who must get that health care can continue to get that health care."
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