Public service Defence pay backlash grows

The Australian Defence Force has enjoyed greater pay rises than their civilian colleagues over the past two decades, departmental figures reveal.

Close observers have told Fairfax that the Abbott government's latest policy surprise on defence pay puts at risk ...
Close observers have told Fairfax that the Abbott government's latest policy surprise on defence pay puts at risk decades of painstaking effort to build an equitable, rational and durable defence remuneration system.  Photo: Andrew Meares

The data undermines claims made this week by Prime Minister Tony Abbott and Public Service Minister Eric Abetz, as criticism grows that their handling of the pay dispute is destroying decades of work building a fair system for setting soldiers' pay.

The cave-in to political pressure on ADF wages also puts Mr Abbott at odds with his most experienced official, Defence Department secretary Dennis Richardson, who says pay equity between the civilian and military arms of Australia's defence establishment is a crucial principle.

Department of Defence secretary Dennis Richardson appears before Senate estimates last week.
Department of Defence secretary Dennis Richardson appears before Senate estimates last week. Photo: Alex Ellinghausen

Mr Abbott and Senator Abetz defended the fairness of Wednesday's backdown on military pay, citing figures showing median wage rises in the Australian Public Service had outstripped annual ADF pay increases by 4 percentage points between 2004 and 2013.

But the Defence Department confirmed that pay increases for the ADF since 1992 have totalled 78.14 per cent while public servants working in the department received pay rises totalling 76.14 per cent.


The decision to offer 2 per cent a year to sailors, soldiers and air force personnel sparked fury on Wednesday among defence's 20,000 public servants, who have been offered just 1.05 per cent a year conditional upon losing time off, conditions and entitlements.

The government, through Defence Minister Kevin Andrews, denied using misleading data to support its claim that civilian bureaucrats had received higher wage increases than their uniformed counterparts.

The Prime Minister's move also blind-sided senior officials, who were already scrambling to keep up with some frantic policymaking from Mr Abbott and his closest cabinet supporters.

Former Defence Department secretary Paul Barratt said: "It's clearly decision-making on the run. It's another captain's call. It departs from the policy that all these things are decided by the Defence Force Remuneration Tribunal, at arm's length."

Mr Abbott's rationale for intervening personally to increase the government's base salary offer clashes with the logic laid out last week by his straight-talking defence secretary, Mr Richardson.

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Mr Abbott said through a spokesman that "the decision reflects the unique and crucial service of Defence Force personnel".

But Mr Richardson explained to a Senate committee that the "unique nature of military service" was already built into a series of special benefits, including tax-free treatment and a $150 daily allowance while serving overseas.

Mr Richardson said the base salary was calibrated to ensure equity and good relations between the ADF and the Australian Public Service, whose staff frequently report to each other and work side by side.

"The greater the differential you have, between base salaries in the ADF and base salaries in the defence APS, the greater are the difficulties we are going to run into in terms of an integrated workforce," Mr Richardson said.

"The defence leadership, both ADF and APS, have worked very hard over the years to develop a sense of being together and a sense of working together.

"We are still on that journey."

Close observers say this latest policy surprise puts at risk decades of painstaking effort to build an equitable defence remuneration system.

A former senior defence bureaucrat, Paddy Gourley, who was responsible for remuneration in the 1990s, said: "This looks to me to be a complete political fix that is unlikely to mollify the discontents and has nothing to do with rational remuneration policy. A blind eye has been turned to the market."

Mr Gourley said the remuneration system had helped facilitate an exceptional degree of integration between uniformed and civilian personnel, which was one of the Australian military's great strengths.

When announcing the pay deal on Wednesday, Mr Abbott said that while public service workers had enjoyed wage increases of 26 per cent in recent years, defence pay went up just 21 per cent.

The public service statistic included all of the incremental pay rises received by individuals who were promoted or moved up a pay grade.

By contrast, the ADF amount was only the aggregate of pay deals awarded to the uniformed force as a whole and did not include promotions and other individual increases.

Asked on Thursday whether those statistics were misleading, Mr Andrews said they had been provided by the Australian Public Service Commission, which said they were the closest figures available.

"What we're advised is that the APS [Australian Public Service] data … was the most comparable data and that advice was provided by the Australian Public Service Commission, so we're relying upon that advice," Mr Andrews said.

Senator Abetz's office said it had used the best data set available, despite the Defence Department being able to provide The Canberra Times with tables of all ADF and Defence Department pay rises since December 1992.

Mr Abbott also selectively compared the new pay deals for uniformed and civilian defence staff, saying bureaucrats would receive about a 2 per cent pay rise in the first year under their latest pay offer.

He acknowledged these were offset by "productivity trade-offs" for bureaucrats, which include working longer days and losing two days leave a year.

But he did not mention that the bureaucrats' raise drops to just over 1 per cent in the second year, with no rise at all in the third year of the deal.

At last week's Senate committee hearing, Mr Richardson noted that the civilian side of his department, including about 2000 intelligence personnel, had lost 10 per cent of its 22,000 personnel in the space of three years, before last year's further budget cuts were taken into account.

Earlier, he wrote to staff to express his "regret" about a 3 per cent pay increase that they had been awarded over three years, in exchange for forgoing entitlements and working considerably longer hours.

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