There is someone paid more than a wharfie for doing less

Stuff.co.nz

Wonders will never cease. There are people who get paid more than a MUNZ wharfie and do less.

Kiwis were gobsmacked to learn that wharfies at Ports of Auckland cream $91,000 per annum, getting paid for 40 hours but doing just 28 hours of work per week.

Lawyers and Accountants wistfully gazed out of their windows, looking down on the Port jealous that they were slaving away for much less.

Now they have another group of fat cats to be jealous of…MFAT troughers…and handy-men:

Lucrative allowances are nearly doubling the pay of some overseas-based foreign affairs staffers – including a maintenance worker making as much as $154,000 a year.

Documents seen by The Dominion Post show it is not uncommon for overseas Ministry of Foreign Affairs and Trade staff members to collect $100,000-plus a year in allowances, and even workers on roughly the average wage are collecting six-figure sums.

Once extra costs such as rental accommodation and school fees are taken into account, a person earning $51,874 in salary – such as a maintenance worker at the New Zealand embassy in Moscow – can collect about an extra $100,000 once direct employee benefits including allowances, phones and internet are included. Rent is not included in that figure.

MFAT refused to comment on the figures yesterday but confirmed it was taking “appropriate” steps over the leak of information.

MFAT workers get more in allowances than wharfies get in wages!

This is outrageous troughing. Kiwi MFAT troughers are living it large at taxpayer expense.

the tipline

Germany makes its diplomats pay rental when they are posted abroad, knowing that (like NZers) they are renting out their homes during the postings.  And the Israelis must fly economy (including ambassadors) regardless of the flight’s duration, except in exceptional circumstances – if they’re going straight into a major meeting, for example.

Please send in more juicy titbits of MFAT troughers living large.

 


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  • DavidW

    http://www.kiwiblog.co.nz/2012/03/general_debate_27_march_2012.html

    Whale, sloppy outrage here.  I won’t repeat it here but check out my post at Kiwiblog (above – at 9:05am)
    .
    A lot of these costs are part of being there – not putting cash in people’s pockets.  I would bet you would not take a 3 or 4 year posting to Moscow without your kids school fees being covered, accomodation provided (including winter heating costs – I was burning 5000 litres a month of diesel in another Asian city in winter)  and compensation for the horrendous costs of living at a standard comparable to what you could at home.

    Too many people bleating about things they do not know anything about.  Cactus should also know better and it looks like – “where she goest, so goest thou”.  Becoming little mister echo doesn’t do you any favours.

    • johnbronkhorst

      So what you moron!!!…A handy man can be employed locally, for much less. Saving us, in this case, $100 000 per year. This job adds NO value to the overseas embassy, our trade or relations with this country. But costs us the TAXPAYER, for this persons overseas lifestyle.

      • Random Punter

        Sure you can employ a local handyman in Moscow – if you want to give access to your premises and accommodation to someone in the pay of the KGB’s successor organisation, the FSB.  Ask yourself why we need to employ NZ handymen in Russia but not in most other places, and then ask yourself who’s the moron.   

      • johnbronkhorst

        Random….most embassies in Wellington employ LOCAL staff to do the lesser jobs. Only we seem to send NZers all round the world to do these jobs!!!

      • DavidW

        Bronkhorst
        Too many people bleating …… Oh what the hell.  If you want to attack the person rather than the argument you aren’t worth the effort.

    • starboard

      Nobodies forcing them to take up the positions. Just more troughers being uncovered. Good spotting W/O.

    • ConwayCaptain

      David W

      I was friendly with the embasssy staff in Greece when I was there on a ship in 79.  They told me that Min of Foreign Affairs as it was then paid differentials.

      If you lived in NZ and rented a 3 brm apartment it cost you say $500 pw and a similar apartment in your posting was 700 pw then the Min paid 200 bucks.

      They had a sacle for cost of loiving as well so you were not out of pocket.

      Then as you say thare are other things you wouldnt pay for in NZ like heating your house in the depths of a russian winter.

      PNG is considered to be a hazardous posting and children have to be educated so I can see the parent(s) getting an ed allowance for sending kids to boarding schoolm in NZ.

      This argument is going on in the UK as the MoD wants to cut down on these education allowances.  But if the parent(s) are away for a 3year posting it is better for the child to go to boarding school and have an uninterruped education than changing schools before/during/after the posting

      • Kthxbai

        And in fact sending the kids back to NZ probably costs about the same as sending the kids to an English-language school in the city they are posted to.

        Frankly, if my kids couldn’t be educated in English, I wouldn’t go.  One posting might be ok, but changing languages every few years would have a negative impact on schooling.

    • johnbronkhorst

      I don’t know you David…so on here we can ONLY attack the arguement you put forward, on here. So you point is rediculous!

      • DavidW

        So you referring to me as a moron had no foundation in reality or personal experience.  Pleased about that.

    • Cactus Kate

      Expats take those jobs all the time. Why should your rent be paid? Allowances given?

      • DavidW

        Which is why more of the admin jobs at Embassies, Tradenz and Immigration offices offshore have been converted to “local hire” in the past 10 years.  There are simply some jobs that you could not expect to fill with an itinerant expat who may just be passing through.  I’m talking jobs requireing specialist knowledge in international trade negotiations and pacts, jobs requiring very high levels of security clearance and most of all jobs requiring the incumbent to credibly speak to other Governments on behalf of the Government of New Zealand.  Otherwise we should fill our embassies with people like Robyn Malcolm and Lucy Lawless and just give them the occasional script to read.
        Why pay allowances?
        When you ask someone to go and do a job, it makes sense to try and neutralise major negative effects of the particular place you are sending them.  It is one thing for a single to speak from the relative comfort of Hong Kong (where I am sure you would not choose to live and work if you were paid NZ wages) but to select horses for courses (language and particular trade knowledge included) and expect people to uproot themselves for relatively short terms, move family, disrupt spouses career etc you just gotta be a bit more pragmatic about doing what it takes.

      • Tim

        Honestly Kate, how well would you fare in Hong Kong with a salary of NZD45-90k, if you had to pay rent there? Would you be able to eat?

        That’s what you’re proposing, effectively, for diplomats of up to about 10 years experience. You posted on your blog some time ago that NZ lawyers were poorly paid – I can assure you that figures for diplomats (excluding allowances) are about 25% lower than your average, non big 4 lawyers in NZ.

        And while it might please you and some of the others on this site to think of NZ diplomats living on the bones of their arses offshore, in the eyes of the often hierarchical societies in which they work, this will make them not worth talking to. Note this is not a complaint about the current allowances, which can be generous – but they have to be, to make up for the crap salaries and the higher costs of living offshore.

        For the record I have absolutely no problem paying rent offshore, up to a point. Where I live and work the rent on my apartment – because of security needing to be higher, among other things – would be roughly the same as my pre tax income in NZ, though. I understand from your previous comments that you are unlikely to be convinced that I am worth sending offshore, but that doesn’t really matter; what matters is that no good people would elect to be posted under conditions whereby they displaced their entire families in order to take a massive financial loss. Foreign services can’t really operate without people being prepared to staff embassies. (note I said no “good people” – I suspect you could get plenty of muppets to take up the job for a lot less.)

  • DavidW

    sorry, my COMMENT at 9:05am

    • DavidW

      starboard – so you are happy to accept second rate trade negotiators and diplomats for the sake of not being willing to pay a realistic package? – “Only single people or childless couples need apply.  Must be averse to representing New Zealand socially and be willing to live in squalid thirld world conditions.  No experience needed.”  Bah Humbug

      ConwayCaptain
      I have observed at close hand how an Embassy operates and have seen the commitment made by expat staff.  Available to be dragged out without notice 24/7 because of some yobbo drunken Kiwi backpacker treads on a local’s toes, having to build networks among host country government employees (usually through socialising with them) which involves entertaining or being entertained several nights per week, needing to maintain links with staff at other Embassies invariably requiring socialising most other nights each week and not offending anyone by turning them down, operating in a time zone which means that Head Office in Wellington is likely to call you at 5:00am or 11:50 pm to check on some minor detail, holding down the day job because Mr Bronkhorst is likely to turn up unnanounced and whinge if you are not there, make and listen to interminable speeches without nodding off even once.
      The NZ tax system demands that you are taxed in NZ on worldwide income as long as you maintain a “permanent establishment” such as a home, mortgage and bank accounts here.  It is possible to be declared a non-resident for tax if you are paid offshore and are away for (I think 180 days)which means that withholding tax on interest income is set at 15% (well it used to be anyway).  Diplomats posted out of NZ (ie not “local hires”) will be taxed in NZ and I am sure that some of the reimbursing allowances such as school fees and housing  are grossed up for tax reporting purposes so that the net effect on teh employee is neutral.  This of course makes the quantum of these allowances larger again and exacerbates the apparent largesse.

      Message to the critics : 
      By all means if there is excess lets root it out but for god’s sake find out what is reasonable and what is excessive before turning on the whine button.

      • Tim

        Spot on DavidW. Absolutely right on all of it – of particular relevance to this article, that allowances are grossed up for reporting purposes and taxed according to FBT or PAYE in NZ.

        Basically if anyone thinks working for MFAT is going to make them rich, they’re not smart enough to work there. 

      • Sarrs

        By and large the payment of allowances is taxed, either directly as part of salary sacrifice or indirectly through FBT so you are correct. 
        However, if those allowances are taxed indirectly through FBT then the employer (in this case MFAT) usually picks up the tab so the gross allowance is enjoyed by the recipient. I would consider that to be the behaviour of a generous employer and, in tough economic times, I would also expect that employer to be able to amend their policies to tax said allowances through salary sacrifice. 

        There are also some tax free allowances.
        http://www.ird.govt.nz/news-updates/like-to-know-tax-rules-payments-to-employees.html 
        http://www.ird.govt.nz/technical-tax/determinations/other/determinations-other-relocation-0904.html 

      • Tim

        In reply to Sarrs: MFAT allowances are grossed up which means that the figures quoted in the article are pre-tax. I can’t speak for the position involved, but at least some – I would guess around half – of the $100k figure will be taxed at 49.5% for FBT. The rest would be subject to PAYE.

        Formerly, MFAT allowances weren’t taxed but a decision was made with IRD a few years back that they should be subject to FBT or PAYE depending on the exact component. The new amounts were calibrated so that no employee gained or lost anything with that decision. Crazily I believe MFAT’s budget was increased to take this into account… So they could pay the money back to Treasury through the IRD. Yes I know that sounds stupid, but there you go.

        As for salary sacrifice – MFAT salary bands haven’t moved since 2008, as befitting the current economic climate.

      • DavidW

        Re FBT, I’m not sure if this is chargeable on offshore costs.  I would need to check the tax act but someone else might know if it applies.

  • phronesis

    I would like to know if they pay PAYE on their income. I very much doubt they pay tax on their allowances so that is in the hand.

    • DavidW

      phronesis – refer my reply to Conway Captain.  Most “allowances are only of the amount required to meet the cost of a specific item.  There is no “in-the-hand” about it unlike oh say the POAL watersider’s shift allowance.

  • Dutyfree

    I suspect that if I was posted from Germany (one of the richest countries in the world) I would probably be renting my house out for more than the rental in most places I would be sent.  What if your rent does not cover your mortgage in NZ?  What if renting a similar house etc is twice as much in the country you are sent to?  It is not as simple as it seems and I have had two offshore postings from the private sector. There are less allowances etc today than ten years ago and they were less than ten years prior.  I know I was not forced to go, but if any of you think up rooting your family, moving to a different country, potentially culture etc is easy then you are nuts.  There should be some additional compensation, other than just career advancement!  Schooling is a bloody hard choice to make for your kid while overseas.  In many places you cant even get what vaguely passes for a NZ education without going to a private or expat school.

    As to tax, as a private company posting my company pays taxes in the country I am based, not in NZ.  That is how tax laws work.

    As for MFAT, I don’t think anyone has been stopping anyone for applying for jobs there, some decisions might be stupid but a lot of this sounds like penis envy to me.

  • Apolonia

    Surely list MPs get paid more for doing less!

  • Peter Wilson

    It’s high time Fringe Benefit Tax was extended into a host of different areas.

    A MFAT employee posted overseas would be a prime example, renting out their property back home, effectively creating income as a result of their employment. And what about all the entertaining and shows they “have to” attend. Surely there’s some private benefit there too?

    • grumpy

      Found that reference yet???

    • DavidW

      The entertaining wears very thin in year three I can tell you so there is negative personal utility in being socially active. There is no doubting though that the most effective diplomats when the shit hits the fan are usually those who get involved the most.  The worst part from a management point of view I would think is that you have to keep cycling these people through on 3 or 4 year rotations so it is never ending. 

    • Cactus Kate

      Renting property back home and effectively double dipping is a great example.

      • DavidW

        Yeah, like NZ rentals are a pot of gold.  They are taxed you know, if you are fortunate enough to run a surplus over costs.  Others with University aged kids back in NZ receive no rental incomes at all (or just choose no to have some P cooking deadbeats living in their home) and therefore no benefit.  Getting a bit desperate on that one Cathy, the net income off a house in NZ wouldn’t pay your champagne bill. 

      • john1jack

        You know that you’re talking nonsense: whatever I could get for my home here wouldn’t begin to pay for a bedroom in Hong Kong.

    • In Vino Veritas

      Peter, FBT is paid by the employer, so you are proposing that the Government tax itself. Utterly brilliant. I cannot see why the Minister of Revenue hasn’t thought of that before. Collect tax revenue and, and…………….. tax it as revenue!

      In fact, I vote Peter Wilson for Minister of Revenue! Socialism at its very best.

  • AnonWgtn

    This MFAT is all cheap stuff.
    Having just been to my Dentist for a couple of fillings I know who are the richest people in New zealand.

    • Blokeintakapuna

      Probably not as you think – Dentists have at least 6 years of training before they’re fully trained, then there’s the cost of their medical equipment – and if you thought anything “marine” was expensive compared to normal prices, “medical” is an entirely different league altogether – so after at least 6 years of University and training on a student benefit/wage – their charges reflect the cost of the premises, wages, power, telephone, equipment, training and expertise.. and once those factors are considered, it’s probably about right… Still hurts the pocket – but not as much as on-going raging tooth-ache…

    • anon

      And they all have the cheek to call themselves “Doctors”!

  • Tim

    Just for the record (phronesis) allowances and salaries of MFAT staff are taxed. It’s all paid as income in New Zealand and subject to either PAYE or FBT, depending on whether it’s an allowance or the salary itself. 

    @7c294ff9f4121e360e2c97cc48f1004e:disqus
      – honestly, when you have worked a 12 hour day and haven’t seen your kids for a week, how much would you feel like going to some meaningless cocktail party? All that entertaining that diplomats get to “enjoy” for “private benefit” is in addition to regular (long) hours, and I can tell you after the first couple of events gets to be a huge pain in the arse. 

    As to this overhyped piece of repeater trash (the article on stuff, I mean) you might ask yourself a couple of questions: 1) would you go to Moscow, the 4th most expensive city in the world, if you kept your NZ salary of $51k? and 2) what does a “maintenance man” in Russia do? Do you think he’s sweeping floors and putting up shelves? Honestly? Random Punter has it right. 

  • Yeah, we could pay them at NZ domestic levels and let them contract services such as wire tapping, rubbish removal etc other diplomatic missions or the host country itself might well pay our overseas based staff well for this. 

  • Bunswalla

    If MUNZ was negotiating these contracts they would insist on being flown home every weekend, have free Lion Red, buzz bars and chocolate fish in the fridge and they’d go on strike whenever NZ presence was required on some important occasion.

  • Natalie

    I had a Government overseas posting 20 years ago (not MFAT) and my allowances were tied to what MFAT paid its staff in the country. My rent, gas, electricity and phone were paid for by the Government and my salary increased by about 33%, apparently to take account of the higher cost of living in the country I was posted. I wasn’t a diplomat so I was not eligible to buy a cheap duty free BMW and bring it back to NZ, or to buy duty-free alcohol.

    Meanwhile my house in Wellington was rented out and that income covered my mortgage. Also all my household goods were placed in secure storage in Wellington, paid for by the Government for the entire time I was away. Back then you could takeabout 5 cu metres of possession overseas with you (plus extra allowance for children) and the Government paid for that. On return the shipping allowance about doubled for all the furniture and other stuff bought whilst overseas. My shipping bill coming back was well over $15,000 (and that was 20 years ago)

    Really, my only expenses whilst overseas were food and travel and in three years I had saved enough to pay off my mortgage back home. My posting was a once only and I was very junior but I did very well financially out of it and I could see how career MFAT staff would really be making a killing with the allowance. My understanding now is that there are quite a number of very senior MFAT staff who have had sufficent postings (perhaps 10 or more years on various overseas assignments) to have actually become millionaires because of the generous allowances.

    15 years ago MFAT went on cost cutting exercise whereby non-diplomatic support staff were no longer drawn from MFAT, but instead the jobs were advertised in NZ newspapers (say a a chef needed in Paris, etc) and the successful applicant had to pay their own way there and back, find and pay for their own accommodation, and there were no allowances. Perhaps its time this was extended to the diplomatic staff?

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