Media release

Media release: Otago Regional Council decides to fund new living wage for bus drivers

Wednesday 24 August 2022

Otago Regional Council today agreed to pay an increase in the wage rate for Orbus drivers to match the difference between their current pay and the 2022 Living Wage rate.

“We’re pleased we can support bus drivers with today’s decision,” says Doug Rodgers, Transport Manager.

“We recognise that driving buses is a challenging and at times stressful job. We would like to publicly thank our drivers for their effort and hard work during what has been at times a difficult period.”

Now council has endorsed the decision, ORC will set aside an extra amount of funding to pay bus operators so they can top up the bus driver's wages to the new living wage amount.

The current Living Wage rate of $22.75 per hour would rise by 90c, or 3.95%, to $23.65. The ORC has estimated the cost at almost $500,000.

“The national and regional shortage of bus drivers, in conjunction with the impacts of Covid-19 and seasonal influenza, has resulted in a reduced bus service timetable Queenstown and Dunedin bus services and we hope this move will contribute to resolving part of this issue,” says Mr Rodgers.

ORC is separately investigating options to address the issues of bus driver recruitment and retention and the results will be considered as part of formulating the Draft 2023/34 Annual Plan next year. An interim step of this work was today’s resolution to lift bus driver wages to match the 2022 Living Wage which takes effect on 1 September this year.

Until recently, bus driver wages were set by operators and reflected in their tenders for bus contracts.

ORC's recent role in regard to wages has been to fund an increase from the current market wage rates to match the 2021 and now the 2022 living wage. Now council has made that decision, it will set aside an extra amount of funding to pay to the bus operators so they can top up the bus driver's wages to match the new 2022 living wage.

Waka Kotahi has agreed to co-fund its share to match the 2021 Living Wage and is working on how that is adjusted to match future increases in the Living Wage. It is also developing processes and templates to enable regional councils to claim a share of an additional $61m funding from central government to further top up bus driver wages. The timeline for accessing this funding is not yet established. Regional councils will also need to provide matching local share.