Cabinet has agreed to the mandate under which pay equity for nurses will be negotiated and to set aside funding for it, Health Minister Andrew Little has announced.
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He has also set up a working group to assess the District Health Boards' (DHBs) system for ensuring safe staffing levels.
Nurses are set to strike on Thursday after they rejected the DHBs' latest pay offer at the end of last month.
They lifted their strike notice for 29-30 July while considering the offer but said that while the DHBs had made promising moves on pay, the offer contained "too many ambiguities".
Little says the pay equity process involves several steps. The first four milestones included identifying if there is sex-based undervaluation of nurses, identifying jobs with comparable skills; evaluating those skills, responsibilities and work conditions; and identifying the equity gap.
He says it has proven complicated and taken longer than expected, but we are now at the fifth milestone - negotiation.
Cabinet yesterday approved two things: the mandate under which DHBs will negotiate, and the funding to meet the cost of the agreement, he says.
"I've said before that it's my expectation that the pay equity claim once agreed will add hundreds of millions of dollars a year to the current pay roll for nurses. This is still my expectation.
"Our resolve to reach a satisfactory agreement ... remains undiminished."
He says it is likely to be the most significant pay equity claim the country has ever seen and Cabinet now is braced for a significant fund of money that can be set aside for meeting the ambition of pay equity.
"We've known it's coming for three years .... we know have a more accurate picture which is what Cabinet looked at and has given the green light to the DHB negotiators."
He would not say how much funding has been set aside for the pay equity claim, but as he has said before it will be hundreds of millions of dollars a year extra.
"In the end, the parties are going to have to work out how they want to approach this but they now have the green light to deal properly and meaningfully with the pay equity claim."
Nurse collective agreements and safe staffing
Little says the process for negotiating the pay equity claim, and the process for continued collective agreement negotiations are separate.
In July, he told media the latest collective offer - which included a lump-sum payment, an advance on the fair pay deal and a base pay rate increase - had been proposed by the unions themselves.
It also included commitments to conduct a ministerial review of the safe staffing accord, to review inconsistent rollout of care capacity demand management, and to run a joint recruitment campaign between the ministry and NZNO.
Little today said he had set up a working group with four members to assess the Care Capacity Demand Management (CCDM) system - which is designed to ensure safe staffing levels. So far only 10 of the 20 DHBs have met their commitments under the CCDM system.
The group would look at where the system working and where it is not, will hear from nurses and assess whether the system is fit for purpose, and will report back to Little in three months.
He says he doesn't think there is such a thing as a silver bullet for ensuring nursing is an attractive career option, and there is still a job to be done in that respect.
"Without speaking for nurses, I think nurses are people who want those who have suffered harm or are unwell or are ill to be looked after and cared for ... but we've got to be sure and I think the history of nursing is that we have relied on those who go into the nursing profession to do all that, to give of that and give of themselves, and not pay them fairly for it. And that's what we've got to bring to an end through the pay equity claim."
As well as Thursday's strike, a further 24-hour strike is planned for 9 September.
Little says the government knows it has a major challenge with health funding, including in maternity, Pharmac funding and across the health system.
