9 October 2000

Governor received 2.37 per cent pay rise

The Reserve Bank has moved to ensure clarity as to the salary package paid to Reserve Bank Governor Don Brash, given the release today of the Bank's 2000 Annual Report.

Reserve Bank Deputy Governor Rod Carr said: "For the record, Dr Brash's annual rate of total remuneration at the beginning of the Annual Report's review period (1 July 1999) was $485,000. At the end of the review period (30 June 2000) it was $496,500, giving an annual increase of 2.37 per cent.

"This was exactly the same as the average percentage increase received by Reserve Bank staff employed under the Bank's collective employment contract.

"Also for the record, when Dr Brash became Governor in 1988, his total remuneration matched that which he had previously received as Chief Executive of Trust Bank. Since then, his total remuneration has increased at an average annual rate of 4 per cent, which is close to the nation-wide average for private sector wage and salary earners over the same period at 3.7 per cent.

"The Reserve Bank has made these details public because, with the release of the Reserve Bank's 2000 Annual Report today, Dr Brash's salary will inevitably be the subject of media reports and comments.

"As well, some commentators may otherwise misread the remuneration table in the 2000 Annual Report, when comparing it with the previous year's Annual Report, and incorrectly infer that Dr Brash recently received a larger salary increase, just as other incorrect inferences about his salary have been made in the recent past.

"The apparent discrepancy stems from a one-off effect of Dr Brash's previous employment contract. As reported in earlier Annual Reports, for the duration of his second five-year term as Governor (completed 31 August 1998), Dr Brash received no salary adjustments at all. Instead, his salary was held unchanged, until a catch-up adjustment was made two months into the 1998/99 financial year, when his third five-year term began.

"Thus Dr Brash's average remuneration for the 1998/99 financial year was lower than the salary he was receiving at the end of that period. This could lead to an incorrect impression as to the scale of the increase during the following 1999/2000 year, that being the period covered by the Annual Report released today," Dr Carr concluded.

For further information contact
Paul Jackman
Corporate Affairs Manager
Ph 04 471 3671, 021 497 418, home 04 938 8177, jackmanp@rbnz.govt.nz