Senior public servants to escape Prime Minister's pay freeze

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The vast majority of senior public servants will escape the Abbott's government's decision to freeze the pay of top bureaucrats.

Treasurer Joe Hockey said on Sunday that "MPs and senior public servants" would not receive salary rises, so as to help the government save money.

He said Prime Minister Tony Abbott had written to the Remuneration Tribunal to request the freeze, and he expected the tribunal to agree "in due course".

However, the proposal will only affect several hundred office holders, some of whom recently received their largest-ever pay rise.

The bureaucracy's 2750 senior executives will be exempt from the freeze, as the tribunal has no authority to set their salaries.


Mr Hockey's spokeswoman said the freeze was limited to departmental secretaries, other agency heads, the five Defence Force chiefs, Public Service Commissioner Stephen Sedgwick and other statutory office holders.

The tribunal recently awarded what it described as "significant increases" in pay to top-ranking public servants and military officers, after independent reviews found they were drastically underpaid compared with executives with similar responsibilities in the private sector.

The typical departmental secretary's total salary package was $539,580 two years ago, but will reach $716,800 in July this year after a series of "catch-up" increases.

Similarly, the head of the Defence Force's remuneration package was $539,580 at the beginning of 2012 and will reach $798,720 in July.

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While the proposed pay freeze will have a negligible effect on the budget, the Treasurer indicated it was symbolically important.

"I think we have got to send a clear message to the electorate that, whatever we are asking the electorate to contribute to the budget repair task, we are going to contribute ourselves as well," Mr Hockey said.

He did not say how long the freeze on politicians and top public servants' pay would last.

Meanwhile, the tribunal's latest annual report suggests a freeze that exempts senior executives may exacerbate a problem that it has regularly warned the government about.

President John Conde said that, while the tribunal had ensured that statutory office holders' salaries generally rose slowly, government agencies had not similarly restrained the pay of SES officers.

"SES employees are frequently the direct reports of office holders and increases in SES pay relative to office holder pay over the years have resulted in the collapsing of pay differentials in many agencies," Mr Conde wrote.

The government is presently negotiating a new wage deal for about 165,000 public servants. It has warned them to expect a salary rise of as low as 1.5 per cent a year, and only then if they can find savings to pay for it.

Clarification: An earlier version of this article reported that Mr Hockey's office said the freeze would only affect 24 senior government and military officials. The Treasurer's office has since corrected its response, saying the freeze would "apply to everyone who has their remuneration determined by the Remuneration Tribunal".