Former public service commissioner warns against capping senior salaries
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Former public service commissioner warns against capping senior salaries

There should be no cap on senior public servants' salaries, but parity with the top of the private sector shouldn't be the way forward, a former departmental secretary has warned.

Control of senior executive' pay needs to be "strengthened", Australian National University Professor Andrew Podger says, but he refrained from directly saying that the bureaucracy's top brass are overpaid.

Department of the Prime Minister and Cabinet secretary Martin Parkinson is the highest paid secretary in Canberra, receiving an annual salary of $878,940.

Department of the Prime Minister and Cabinet secretary Martin Parkinson is the highest paid secretary in Canberra, receiving an annual salary of $878,940.

Photo: Rohan Thomson

Professor Podger, who was public service commissioner from 2002 to 2004 and secretary of the Health Department for six years, made the recommendations in a submission to a Senate committee considering a bill to cap the salaries of senior public servants.

Greens senator Peter Whish-Wilson proposed the cap, alongside a pay rise for more junior public servants.

Department heads receive remuneration packages worth between $692,500 and $878,940, but the Greens want to cap their pay at five times the average earnings of full-time adult workers. Current levels are between nine and 10 times average earnings, according to Professor Podger's submission.

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A cap is a "blunt instrument" that would politicise the remuneration of public servants, the submission argues.

"It is possible" some top public servants are overpaid, Professor Podger told Fairfax Media, because too much weight was given to finding parity with private sector wages over other areas of public service, such as at state or territory level.

Linking public service salaries to those earned by private sector chief executives didn't reflect the reality of the working environment, he said.

"[The Remuneration Tribunal] refers to the 'prestige' of high public service, but not to the much broader and widely researched notion of 'public service motivation' and a culture that inevitably emphasises service, public goods and equity," he said.

"These all may moderate the need for remuneration to follow private sector practice, albeit that it is essential to attract and retain the best and the brightest."

Variations in remuneration across departments also create problems, the submission argues.

"Much firmer action is required to control the way SES remuneration is set, and to ensure a consistent 'one-APS' approach," Professor Podger said.

"The tribunal's approach has also led to pay differentiations that are not consistent with the way the public sector operates and how senior executives are allocated to their offices.

"In part, this is the result of successive governments inappropriately applying private sector practices to the appointment of secretaries."

Professor Podger also called for a change of membership of the Remuneration Tribunal to include members with public service experience.

"The tribunal's limited understanding of the public sector suggests the need for change in its membership. For many years now, members have had an almost exclusively private sector background. Surely some public sector experience and expertise is required," he said.

The top paid secretary is Department of the Prime Minister and Cabinet chief Martin Parkinson, whose total remuneration, including salary, superannuation and other benefits, is $878,940.

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He's followed by Treasury boss John Fraser on $857,630. Other secretary' pay is organised by tier, with the heads of Defence, Finance, Foreign Affairs and Trade, Health, Human Services, Industry and Social Services making up tier one.

Attorney-General's, Communications and the Arts, Agriculture and Employment are among the second-tier departments.

Sally Whyte

Sally Whyte is a reporter for The Canberra Times covering the public service.

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