Nurses voted to reject the latest $500 million pay offer from New Zealand's District Health Boards (DHBs) on Monday, but the soon-to-be Acting Prime Minister says the Government can't please everyone overnight.
Deputy Prime Minister Winston Peters said he understands why nurses have rejected the latest pay offer but also understands the perspective of the Government.
"I understand both sides of the story. This is the biggest offer [nurses have] had in the last 14 years. They put up with very little under the National Party," Mr Peters told The AM Show on Tuesday.
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"The new Government's come in, and perhaps the expectations that we've given them are too high. However, this is a massive advance on what it was before and I hope some way we find our way through it, but I'm not going to gild the lily and say it's so easy to do."
Nurses rejected an offer of a nine percent pay increase over 15 months, and a $2000 one-off lump sum. Salary limits would increase for registered nurses with more than five years' experience, meaning some could get increases of about 16 percent.
The union says while the latest offer was a substantial improvement on pay, variability over pay increases has created uncertainty.
"I can see the nurses' side of the story but I do understand the Government's side of the story which I'm a part of, and that is: we have to be fiscally responsible and we've got to ensure that we do manage the country properly whilst doing all these things that were neglected," Mr Peters said.
"We've still got to keep a surplus for a rainy day down the stream, which is almost inevitable - especially if this Government goes on for two terms."
Nurses have been negotiating a pay increase for a year now. They say their pay has not kept up with other professions like police and teachers. But Mr Peters says the Government can't fix every industry's problems in one budget.
"We can't put everything aright all over the country in all sorts of areas - whether it is teaching, roads, infrastructure, police, or in this case nurses - overnight in one budget. That's all I'm saying," he said.
"Could we do better? Possibly, but we've got to work our way through it. It's no good fighting with a megaphone and negotiating through the media."
Mr Peters said he has "a lot of confidence" in Health Minister David Clark despite Mr Clark saying he is disappointed nurses rejected the offer and said the Government cannot fork out more money to increase nurses' pay.
But Mr Peters said he believes Mr Clark meant the Government can't do it all in one budget.
While the Government is disappointed nurses rejected the offer, the Greens say they should be paid more. Co-leader Marama Davidson said the party supports nurses' "call for urgent mediation".
The DHBs said they are likely to receive notice of strike action on 20 June.
Watch the full interview with Winston Peters above.
The AM Show with Duncan Garner, Amanda Gillies and Mark Richardson, weekdays 6-9am on RadioLIVE and streaming live to the rova app on Android and iPhone.