The Government has agreed to fund a $4.4 billion package to settle teachers’ and principals’ agreements.

It comes after an arbitration panel recommended secondary teachers get a 14.5 per cent pay rise spread over three instalments.

Education Minister Jan Tinetti announced today the Government had accepted the recommendation and had offered to increase secondary teachers’ base salaries by 14.5 percent by December 2024.

The offer would see beginner teachers receive an annual increase of almost $10,000, in addition up to the $7210 lump sum payment.

Post Primary Teachers’ Association Te Wehengarua acting president Chris Abercrombie said they were “pleased” to see the offer and would recommend it to members to accept ahead of a vote next week.

If accepted by both parties the recommended settlement is likely to have knock-on effects for early childhood and primary school teachers.

Under pay parity rules, the Ministry of Education must offer any changes to teachers’ unified base salary scale to primary teachers and then in turn to kindergarten teachers.

Tinetti said she was “proud” of being able to make the offer which she thought would help attract and retain the best people to teach the country’s young people.

The offer provides an increase of 36 per cent for teachers at the top of the pay scale since 2017 when Labour came into Government and 23.5 per cent for beginner teachers.

Tinetti said this compared to a 10 per cent increase of the top rate under the last National Government.

“I know how disruptive the past few months have been for our students, young people and their parents. We all want our young people back in the classroom learning, and this offer reinforces our commitment to that,” she said.

The panel’s recommendation adds an extra cost of about $680 million to the $3.76 billion already set aside in the Budget to settle teachers’ and principals’ agreements, adding up to a package worth over $3.4b

This includes an increase to other education collective agreements which will flow on from this decision.

Tinetti said it was a “careful” balance given the current financial situation and the money had been found through savings from other parts of the Education Budget and Education’s Budget 2024 cost pressure allowance.

The main savings of $374m came from Ministry of Education departmental funding; forecast staffing underspend - mostly as a result of newer teachers being employed; removal of the option to “bank staffing” for all schools, excluding Kaupapa Māori and Māori Medium Education (from July 2025); and deferring the Te Ao Marama and Hobsonville Point Secondary School projects in the Public Private Partnership Schools Expansion Programme, and rephase the current operating funding.

The remaining $306m was pre-committed to the Budget 2024 allowance, specifically to the cost pressure allocation which the Minister of Finance sets at the start of the Budget process.

“This is a balanced approach to increasing the pay of an important front-line workforce, while dealing with the broader fiscal pressures that the Government faces,” said Tinetti, adding that the possible impact on inflation was also considered (the 14.5 per cent increase is more than twice the rate of inflation at 6 per cent in the year to June).

“Our Government has a proud track record of supporting teachers, who are the cornerstone of our education system,” Tinetti said.

“We’re proud of this offer and we hope the PPTA will be too.

The increase would shift starting pay for most new secondary teachers from $55,948 to $64,082 by the start of 2025, while pay rates for teachers at the top of the scale would increase from $90,000 to $103,085.

That appeared to be better than the pay scale recently agreed by primary teachers where the equivalent points on the pay scale would increase to $63,187 and $100,000.

The panel said the term of the new collective agreement should be three years, from July 3, 2022, to July 2, 2025.

The panel also recommended one-off payments of $5000 for all teachers, a further $1500 for PPTA members, and up to $710 to cover teaching practising certificate renewal.

The decision said the Post Primary Teachers Association had sought a pay rise totalling 17.9 per cent backdated to the end of the previous collective agreement on July 1, 2022, while the Ministry of Education was offering 11.1 per cent starting from July 1, 2023 to June 30, 2025.

Secondary teachers had not had a pay rise since July 1, 2021, it said.

“Undeniably, the value of their salaries has diminished significantly over that period due to annual inflation, as measured by the New Zealand Consumers Price Index (CPI) in the years to June 2022 (7.3 per cent) and June 2023 (6.0 per cent),” the panel said.