National

Top public servants' pay bonanza

The federal government's top public servants have been given big pay rises, with some department bosses' salaries increasing by more than $60,000 a year.

Martin Parkinson: Australia's new top public servant will be paid $861,000.
Martin Parkinson: Australia's new top public servant will be paid $861,000. Photo: Alex Ellinghausen

The increase was awarded while pay disputes in many departments rumbled on. Most of the Commonwealth's rank-and-file public servants have gone without a pay rise since mid-2013.

The pay rises for the bureaucracy's top earners, which were approved quietly before Christmas, reverse the much vaunted "freezing" of top mandarins' pay requested by then treasurer Joe Hockey in May 2014.

The new pay rises mean those at the top of the public service pile, the secretaries of the Department of the Prime Minster and Cabinet and the Treasury, will be paid salaries of $861,000 and $840,000 respectively, as well as superannuation and other perks.

The annual wages of the Defence and Foreign Affairs secretaries, next in the pecking order, have had soared by $85,000 each since 2013. Dennis Richardson and Peter Varghese will now each be on base salaries of $814,000.

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Further down the food chain, Human Services boss Kathryn Campbell, whose 35,000 public servants are currently voting on a pay deal worth 2 per cent a year, has had her pay rise by just under $50,000, or 7.5 per cent, since 2013.

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The big wage boosts are the final step in a process to significantly increase the pay of 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 four years ago, but will now be $730,000 after the series of "catch-up" increases.

As well as passing on the "top-up" increase that was due to flow in July 2014, the Remuneration Tribunal decided that another increase of 2 per cent was justified.

But the tribunal stressed in its decision that Canberra mandarins were not in it for the money.

"Many of these office holders do not expect or require that monetary compensation be set at private sector levels," the tribunal reported.

"Rather, in the true sense of the phrase 'public service', office holders serve for the public good.

"This means that in setting remuneration the tribunal has traditionally set rates below those of the private sector."

The tribunal noted that the general wage increase, the 2 per cent granted on top of the secretaries' "catch-up" increases, was a little below market rates but the government's tough stance on wages for rank-and-file public servants had weighed in the decision.

"While remuneration data generally reflects a period of very moderate wage growth across the economy, the tribunal's decision today provides an increase that is below both public sector and private sector trends," the tribunal said.

"Past wage movements across both public and private sectors, including the Fair Work Commission's minimum wage decisions as outlined, would support a higher increase than the 2 per cent it has decided.

"The government policy of significant wage restraint applying to APS and non-APS agencies has also weighed on the tribunal's consideration."

Fairfax Media asked the Prime Minister's office if the government had made representations to the tribunal. In a statement, Public Service Minister Michaelia Cash said the tribunal was an independent statutory authority and its determinations were made independently of government.

"The tribunal's determination in respect of secretaries and other senior statutory offices implements earlier decisions of the tribunal taken in 2011 and 2012," she said.

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