PSA: Scrapping pay equity cost New Zealand $13.5 billion in growth

The New Zealand government’s decision to cancel pay equity claims in May 2025 cost the country 13,000 jobs and $13.5 billion in economic growth, according to a new analysis from the Public Service Association (PSA).

The PSA’s analysis was based on the Treasury’s own MATAI macro-economic model, which the union said shows that reinstating pay equity settlements would grow GDP by 0.6% over four years and generate an additional $5 billion in tax revenue. 

“Our analysis shows the Government had a genuine opportunity to grow the economy, create jobs, and boost tax revenue by continuing with pay equity settlements, and it walked away from it,” said Fleur Fitzsimons, national secretary of the PSA.