The Government has signed off a 63 percent pay rise for the chair of Pharmac, the agency that decides which medicines New Zealanders can get funded, with former National deputy prime minister Paula Bennett set to see her annual fee climb from 66,000 dollars to 104,360 dollars.
The increase was approved by Associate Health Minister David Seymour, who oversees the drug buying agency, and was backdated to 1 September 2025. It is not just the chair who benefits. Deputy chair Dr Peter Bramley is in line for a 66.3 percent rise, taking his fee from 41,250 dollars to 65,250 dollars, while ordinary board members move from 33,000 dollars to 52,200 dollars a year, according to reporting by the New Zealand Herald.
Seymour has defended the decision as a simple matter of market reality. He argues that the people governing one of the country’s most important public bodies were being paid a fraction of what they would earn in the private sector, and that the gap was making it harder to attract the right people. “With this increase the Pharmac chair will be paid half as much as a similar chair of a private company,” Seymour said. He added that “it is important we get good people running critical organisations like Pharmac.”
On paper that argument has some force. Pharmac is no small operation. The board carries responsibility for roughly 1.76 billion dollars of medicine purchases each year, weighing clinical evidence, supplier negotiations and a fixed budget against a near endless queue of drugs that patients and clinicians want funded. Officials backing the rise pointed to the agency’s “sustained scale, complexity, and risk profile” as justification for fees closer to those paid elsewhere for comparable governance work.
The change does not sit in isolation either. It flows from a wider Cabinet decision late in 2025 to overhaul the Cabinet Fees Framework, the set of rules that caps what members of Crown entity boards can be paid. That overhaul lifted the ceiling on board fee increases to as much as 80 percent. Prime Minister Christopher Luxon has previously said director fees across the public sector had drifted “out of whack” with what private companies pay, and the Government has framed the reset as overdue catch up rather than largesse. Modelling at the time suggested the framework changes could add around 11 million dollars in costs across affected agencies.
Yet the politics of the timing are awkward, and that is where the story becomes more than a line item. This is an election year. The same surveys that track the mood of the country put the cost of living at the very top of voter concerns, with healthcare close behind. Against that backdrop, a near two thirds pay rise for the chair of the medicines agency, a chair who happens to be a former senior National figure, is the kind of decision that critics can hold up without needing to say very much at all.
Pharmac has spent recent years as a lightning rod for exactly the frustrations the pay rise risks inflaming. Patients have campaigned, often publicly and painfully, for the funding of cancer drugs, diabetes treatments and rare disease medicines that remain out of reach inside the agency’s fixed budget. The Government has poured additional money into Pharmac to widen access, but the wait lists and the heart rending individual cases have not gone away. To many of those families, the line between governing the budget well and being paid more to do it will be a fine one.
It is also worth being precise about what the rise is and is not. These are governance fees for part time board members, not the salary of a full time chief executive, and they remain below what Seymour says equivalent private boards command. Bennett, who has chaired Pharmac since May 2024, did not set her own pay. The minister did, under rules Cabinet agreed. None of that changes the optics, but it is the difference between a defensible administrative decision and the caricature of a politician handing a former colleague a windfall.
The deeper question the increase raises is one voters will get to weigh later this year. Should the people who govern public institutions be paid rates that track the private sector, on the theory that you get the leadership you pay for, or should public service carry a discount that reflects the fact that the money is everyone’s. There is no neutral answer, and the major parties land in different places on it. If you want to see where the parties sit on health spending, public sector pay and the cost of living before you vote, you can compare their positions using our voting tool.
For now the rises are locked in and backdated, and the Government has shown no sign of reconsidering. Pharmac itself continues the unglamorous work of deciding, within a budget that never stretches far enough, which medicines the country can afford. The board overseeing those decisions will simply be paid rather more to make them. You can read the agency’s own funding context in RNZ’s political coverage and the original fee detail via Newstalk ZB.
What do you make of it. Is this a sensible move to attract strong governance to a critical agency, or the wrong call at the wrong time while families still fight for funded medicines. Share your view in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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