As the country heads towards a nurses strike, this Thursday talks between the nurses and the District Health Boards were continuing in Wellington last night under the supervision of an Employment Relations Authority facilitator.

But the talks are taking place against a background of division within the Nurses’ Organisation and the refusal of the government to budge on any more funding for the hospitals so they could increase their offer to the nurses.

This is shaping up into a real test of the Labour-led coalition and its Budget Responsibility Rules.

Labour has actually committed to running only a slightly smaller surplus  (as a percentage of GDP) than National had proposed in its 2017  Pre-Election Economic and Fiscal Update.

There is widespread opposition to this among unions and from the left more generally.

In a statement yesterday the acting Prime Minister, Winston Peters, pointed out that the current pay offer to the nurses was the highest pay increase they had seen in 14 years.

(That was a reference to the so-called pay jolt in 2004 which saw nurses’ pay rise by 20 per cent over four years.)

“Our nurses are caring, and dedicated professionals and this Government values them,” the statement said.

“We are focused on trying to establish a social contract with nurses and other people doing vital work in the public service to address their concerns.”

On Monday, at the post Cabinet press conference, Peters made a plea for patience from the nurses.

“What I do intend to talk to the unions about is that you have got a Government that does give a damn but give us a chance to demonstrate it and run a sound economy at the same time.

“Otherwise you will have the prospect of having a different Government in three years time, and you will be back worse off than you ever were and 12 years of struggle to show for it.”

The problem Peters has got is that the Government has a contingency fund in this year’s Budget which Budget documents say relates to “negotiations that have yet to take place such as wage negotiations” but it is only $619 million.

Across the public sector (including the health sector) this year’s Budget assumed that wages and salaries would move by about two per cent.

The DHBs offer to the nurses includes 3 per cent pay increases in June and  August this Budget year and then again in August 2019, as well as a $2000 lump sum payment and an increase to on-call rates.

The Government have already doubled the offer to the nurses adding an additional $270 million from the contingency fund – but that fund will also have to deal with big pay claims from teachers and the police.

“We haven’t been joking when we told the nurses via the media that this is our best offer,” Peters said in a news conference yesterday.

“It’s not that we’re not willing to – we haven’t got the money.”

The Nurses Organisation appears to recognise that they have got as much out of the DHBs as they are likely to get and that facilitation, in effect a compulsory conference, was unlikely to get anywhere.

In a statement yesterday NZNO negotiator, Lesley Harry said: “ given the clear statements by the DHB’s and the Minister concerning the unavailability of additional funding to support an improved offer – it is not clear to NZNO that Facilitation is the appropriate forum in which to address the current difficulties in concluding the (agreement)  at this time.”

A part-time nurse Danni Wilkinson told Radio Live that many NZNO members weren’t happy with the way negotiations were being handled.

She said there were questions about the union’s negotiators who were recommending that the DHB offer be accepted but yesterday’s electronic vote  which rejected it showed what the mood of the members was

She said the union should take up an offer from former Alliance MP, Laila Harre, to help.

Thus the dispute appears to be at a stalemate with the Government unwilling to move; the DHBs bound by the Government; the Nurses Organisation negotiators sympathising with that position but their members wanting more.