UPDATED AT 3:06PM:

The government isn't ruling out putting a cap on chief executive pay scales as it looks for ways to curb "quite rampant" public service salary increases.

Prime Minister Jacinda Ardern says "something has to change" and State Services Minister Chris Hipkins has given a commitment to do something about it."

I'm not convinced the current regulatory or legal regimes around chief executive pay is sufficient to allow us to constrain what has been quite rampant growth," Mr Hipkins said on Wednesday.

Asked whether he would legislate for a cap, he said he was wasn't ruling that out.
"I'm not ruling any options out," he said.

"I'm not saying we would necessarily do a cap but the government does want to look at more levers for how we can ensure this very significant growth at the top of the public sector is dealt to."

Opposition leader Bill English said the previous government had been addressing the problem.
"The next step should be that the boards don't propose pay rises that won't be agreed to, and don't follow through against the wishes of the government."

Earlier, State Services Commissioner Peter Hughes released a report which is highly critical of Crown entities that chose to lift their chief executive's pay significantly in the past year, against the advice of the SSC and ministers.

"The upward trajectory of chief executive salaries in the state sector, in particular some Crown entities, is not sustainable and it's time for change," he said.

"While the board has the right to make these decisions, I do not believe increases of the magnitude given are warranted or justifiable in a public agency, especially where the increase follows previous increases over and above my advice."

His report specifically points to the chiefs of Guardians of NZ Superannuation, ACC and Telarc.
The superannuation fund's boss, Adrian Orr - who has since been named the Reserve Bank's next governor - already copped flak from the commission this year over his $1.2 million pay packet, an increase of 14.7 per cent in 2016-17.

ACC chief Scott Pickering received about $830,000 for the year while Telarc boss Philip Cryer was paid about $250,000, up from between $210,000 to $219,000 the year prior, according to the Senior Pay Report.

Mr Hughes said he had been asked by the State Services Minister to come up with a set of regulatory options to manage the issue, and was also developing a new remuneration policy.
But he warned it could take up to three years for the changes to take effect.

"Pay levels at the top end of the State sector are too high, and I've believed that for a number of years," he said.

"There has always been, and should be, a differential between the pay of senior executives in the public and private sector."

The average remuneration increase for public service chief executives in the 2016-17 year was 2.0 per cent, the report found.