I have previously written on what I consider excessive remuneration of public servants. The recent review of the senior executive service by Roger Beale found that one in five deputy secretary level positions were overclassified. It is in fact worse – the Government is now appointing officers at the associate secretary level, effectively adding yet another layer in the hierarchy between the secretary of a department and the deputy secretaries.
There are thus two issues:
- the tendency to overclassify positions: having deputy secretaries doing the work previously undertaken (well) by more junior officers. This is bracket creep.
- the explosion in salaries of public servants at each level over the past decade or so.
Effectively some officers receive a double benefit: being classified at a higher level for the job they are doing, and then getting paid even more for that overclassified position.
(Why? Because ministers don’t like talking to EL2s and need to talk to deputy secretaries? That seems to be one argument being run. Should we therefore upgrade personal assistants to deputy secretary positions too?)
As I noted in my earlier blog, we should not aim to make public service positions “competitive” with the private sector – this will just encourage more people to join the public service rather than creating wealth for the country in the private sector (and especially as a risk-taking entrepreneur).
But it is more insidious than that.
Consider a report that six public servants stand to gain an extra $300 000 each. These are the Chief of the Defence Force, the Tax Commissioner, the Auditor-General, the Chief of Customs and the Australian Statistician.
Yet the comparison to the private sector neglects other non-money benefits accruing to these officers. Take the Chief of the Defence Force. He is supposed to jointly run Defence with the Defence Secretary. Yet the proposal would increase the differential between these two offices. Further, does not the Chief receive rent-free accommodation?
Then the other offices of Tax Commissioner, Auditor-General and Australian Statistician. Their various Acts provide that they may only be dismissed by the Governor-General in Council with the concurrence of both Houses of Parliament. In effect they cannot be dismissed.
Should their salary really be increased to private sector levels when they do not suffer the risks of private sector employment? And enjoy a very attractive retirement package.
No – we want these offices filled by those who have an interest in public service. The price of public service is a lower lifetime remuneration. Long may that be so.
Samuel
How hard is it to fire one of these people?
JC
28 Sep 11 at 7:50 pm
JC – as far as I’m aware, no such statutory officer has ever been fired. Maybe they have all been fine fellows? Same goes for judges who want the same pay as barristers but don’t need to worry about their next client.
Samuel J
28 Sep 11 at 7:56 pm
Please excuse me, but what does one find to do with $800,000 p.a.(less tax)?
manalive
28 Sep 11 at 8:08 pm
There are over 151,000 public ‘servants’ in the APS alone (over 163,000 including temps).
I also discovered today to my horror, that the NSW public service is the largest employer in that state – over 322,000 employees, an estimated 11% of the workforce.
If those two figures don’t give you the heebie jeebies, then nothing will.
Soviet Russia, here we come – if we’re not already there*…
*Thoughtcrime 2.011 now enabled, for even more no fun!
Rabz
28 Sep 11 at 9:02 pm
I went through a salary setting exercise when I was a pube.
Let’s say you’ve created a new public service position for Telephone Sanitisers. How much to pay them? Easy – consult a salary survey of private sector salaries.
The salary survey tells us that a Telephone Sanitiser working for the Particularly Annoying Cleaning Operation is paid between $40,000 and $80,000 per year.
The way the public servant’s brain works is that you never pitch a salary level at the lower end of the private sector band – you set the minimum at the middle of the private sector band. The idea is to attract “quality” applicants.
ie, if young Jimmy goes to work for PACO, he’ll start on $40k. If young Cheryl goes to work for the government doing the same work, she’ll start at $60k – and her salary will rapidly escalate to the top of that band.
If Cheryl is still doing that job 7 years later and is now earning $80k, her managers will think of a way to reclassify her job in order to put her into a higher salary bracket. She’ll go from being a Telephone Sanitiser to being a Telephone Sanitising Engineer – same job specs, but with a salary band that goes from say $80k to $100k.
I’m too tired to explain it any more clearly than that.
boy on a bike
28 Sep 11 at 9:50 pm
Hunt out a copy of “Parkinson’s Law” (Cyril Northcote Parkinson) – it explains how and why there is a growth in the public service over time. Well worth a read.
Greg
28 Sep 11 at 10:40 pm
Average full-time adult total earnings in the public sector are over $113.90 more per week than for the private sector.
ABS link, May 2011
jrm
28 Sep 11 at 11:00 pm
Sorry.
are
over$113.90jrm
28 Sep 11 at 11:04 pm
BOAB, makes perfect sense. A system of patronage, where the loyal are rewarded.
wreckage
28 Sep 11 at 11:30 pm
I agree with Samuel that the public service salaries do not need to be on par with those in the private sector. However I do not think 800K is a salary on par with a comparable position in the private sector. It is nowhere near that level.
Generally speaking, salaries in the public sector are much lower than in the prvate sector. This is how it should be. But there have to be a reasonable abalnce, especially at the bottom of the scale. I work in academia because I love it and cannot be lured by 50% higher wage in the industry, but if they offered me 3 times more, I would think hard.
Boris
29 Sep 11 at 2:16 am
Having moved from public to private, my view is that public service salaries are on par with those in our largest private companies – the top 100 in the ASX for instance. The salary surveys target the big players.
They are way above what is paid in the SMEs. Way, way above.
Boy on a bike
29 Sep 11 at 5:36 am
Boris – I also think that public service salaries are as good or better than the private sector. It is only a very small percentage of companies that pay more.
Samuel J
29 Sep 11 at 5:38 am
“I also think that public service salaries are as good or better than the private sector. It is only a very small percentage of companies that pay more”
Samuel, last time I checked, the wages of public servants were, on average, very similar to the private sector, despite the overall level of qualifications you need being higher (the ABS has the data). So based on that they are comparatively lower. I also don’t think it’s worthwhile complaining about a tiny number of examples which are essentially idiosyncratic since they’re not the problem and they presumably need to be worked out on an individual case by case basis anyway. It also makes for a confused argument to then talk about the public service in general when using these as an example, since they’re essentially irrelevant to your issue (i.e, overall pay).
conrad
29 Sep 11 at 6:51 am
The point about private/public comparisons, if I can put it another way, is demand and supply. Private sector people may get paid more than a leader of massed troops of public servants but, in addition to the various perks like job stability, the two managerial streams have very different skills.
It is very rare for a private sector business to recruit a senior public servant (other than in lobbying etc). This is because the latter has risen not for her skills at maximising profits in a highly rivalrous world but for the art of keeping people employed, writing crisp, succinct briefings etc. There is little risk of leakage away from the public service if wage “fall behind”. Indeed, US public servants earn less than Australians and this has not led to an exodus to the private sector.
It is equally rare for a private sector person to make a successful transition to the mandarin class of public servants for the same reasons.
Many people have jobs which we might think deserve more pay – think garbage collectors, nurses – but the fact is that there are people willing to do them at the rates offered so we don’t need to reward them as much as some one may think they are worth. Actually, if we did so it would lead to a surplus of applicants for the available jobs.
Alan Moran
29 Sep 11 at 11:03 am
Although its possible to make comparisions at the lower levels its innappropriate at management levels. Private sector managers take responsibility, get blamed if things go wrong, and get sacked or eased out in takeovers etc. In the public sector its not all the same.
Mike A.
29 Sep 11 at 11:34 am
‘Boris – I also think that public service salaries are as good or better than the private sector.’
I am not sure what is the planet you live on. In my industry (oil), the starting salary for a graduate with an honours degree is close to 100K. It does not get them many years to get to the salary level of professor. And I am not talking offshore.
Obviously academia is not quite the public service. But recently we have all read about resignation of a town mayor, who failed to contest the next mayoral election because she said she cannot support her family with a salary of 48K. Are there any managers in the private sector who earn that amount? Are you suggesting town mayor is an easy job that low level manager in the private sector can do easily?
Boris
30 Sep 11 at 1:07 am
Oil and gas is probably the highest paid industry going. Most of private industry isn’t paying like that, as I’m sure you know.
Michael Sutcliffe
30 Sep 11 at 1:27 am
‘ Most of private industry isn’t paying like that, as I’m sure you know.’
Well to some extent, correct. Yet if the difference were big, we would have hundreds of applicants to our course like in law, medicine etc. But it seems there are many other opportunities that pay not so much less, and thus students are spread across many courses.
It seems that engineering graduates in particular have smaller but comparable salaries.
At least in WA.
Boris
30 Sep 11 at 1:50 am
Gosh! Let’s call for pay cuts and mass sackings!
Of course, as a pube, I agree salaries are too high for some.
But not for me. I deserve my 200k. Every fucking cent. And anyone who disagrees can go take a flying fuck at a rolling donut.
APS haters, suck my hairy nut sack!
Abu Chowdah
30 Sep 11 at 7:41 am
No entitlement mentality on display here. Much.
No Worries
30 Sep 11 at 8:14 am
I agree with your arguments here, but I would say that one of chronic problems of government is keeping good people. My gut feeling is that departments needs far fewer, but far better staff.
Just exactly how one achieves this I am not sure.
Cameron Murray
30 Sep 11 at 11:21 am
Job of mayor is part time. Even clover Moore in Sydney has two jobs.
Boy on a bike
30 Sep 11 at 2:12 pm
Suck it, no worries!
Abu Chowdah
30 Sep 11 at 4:37 pm
justify it Abu
No Worries
30 Sep 11 at 5:26 pm
Knocked off early today did you ?
No Worries
30 Sep 11 at 5:27 pm
Pucker up, toots.
I’m not justifying it to anyone. Keep paying those taxes, I need a new deck out back.
Abu Chowdah
1 Oct 11 at 1:53 am
Fine Abu. We’ll keep you on and fire 90%. I’m happy with the deal.
JC
1 Oct 11 at 1:57 am
You are a prince amongst men, JC.
Abu Chowdah
1 Oct 11 at 2:15 am
Abu
Where the fuck are you. Still in the desert?
JC
1 Oct 11 at 2:21 am
Still a million miles from Oz…
Abu Chowdah
1 Oct 11 at 2:46 am
$200k, Abu? What are you, an Ambassador? In the APS working overseas, that’s the kind of money only an Ambassador would get, or maybe DCM at a big embassy.
If that’s what you are, then the next time you speak to Kevvie, please give him the love and best wishes of everyone here at the Cat, and ask him when he intends to regain the public office which was so cruelly taken from him.
Piett
1 Oct 11 at 5:02 am
I may have exaggerated somewhat to get a rise out of No Worries.
Abu Chowdah
1 Oct 11 at 5:09 am
Manning the desk at Centrelink is a thankless task, so permit me some minor diversions…
Abu Chowdah
1 Oct 11 at 5:10 am
Which kind of proves the point the non-APS haters are making. In law or medicine or business in general, people on $200k plus are a dime a dozen — particularly in Sydney — whereas only a very small minority of APS people will ever approach those heights.
At which point the APS haters will chime in about tenure and other benefits.
To which I respond: fine, I agree, abolish permanency and the other benefits — and then pay market rates, as determined by independent remuneration consultants, and not a cent less.
Piett
1 Oct 11 at 5:27 am
Oright guv’nor. Can I stable yer ‘orse?
Abu Chowdah
1 Oct 11 at 5:44 am
An excellent idea. Will you campaign for it?
ken n
1 Oct 11 at 6:36 am
There ought to be mass sackings for useless departments and made up, low productivity jobs like the DCC and Office for the Status of Women.
If we got rid of victimless crimes and halved the police force, I’d gladly double their pay and toughen up the entrance requirements.
.
1 Oct 11 at 7:47 am