I have a piece on Quadrant Online that addresses the proclivity of politically affiliated people to promote those of similar views to positions financed by the public purse. The ALP is better at this than the Coalition and its predisposition to create a torrent of newly minted qangos offers wonderful opportunities to discover the merits of those who offer them stout support and share the same views.
The case addressed in the Quadrant Online article examined the half a billion dollar program to create “industry precincts”. These are to coordinate universities, businesses and government departments to shepherd Australian businesses into the brave new world of the
corporate state modern industrial structure. All of these have an oversighting superstructure comprising people from government, industry, unions and those whom the Government considers have special qualities.
Eight industry precincts are planned and the first two went to a joint RMIT/La Trobe proposal and to one hosted by Monash. And they shared the same CEO whose tweets show him to be excited by President Obama’ s prospective announcement on climate change and outraged by the profits Australian banks are making.
Not only is there an apparent nest feathering going on with these “independent” coordinatory qangos but a related issue is the colossal salaries being paid to the public servants involved. This piece in the SMH reveals that the Vice Chancellors of the main universities in Australia earn around $1 million a year each. Similar remuneration goes to other public servants in top jobs, like the Chairman of the Reserve Bank.
There is nothing to wrong with successful people earning fifteen times the average wage where this entails value-adds. Nobody can begrudge the high earnings of numerous entrepreneurs whose innovations profitably attract willing customers. Nor can we oppose those in established businesses who create shareholder value by carving out unnecessary costs.
But successful people operating in the private sector, as well as being skilled, are risk takers. Their remuneration recognises the fact that the penalty for failure is firing. In the public sector the competitive environment is much diminished (indeed it is zero for the Reserve Bank) and the only chance of being terminated is if one is in charge at the time of a gross cock-up, an outcome faced by a previous VC of RMIT University.
Those on the elevated salaries will claim that they are paid at levels comparable to the private sector; and they will hire “executive remuneration” firms to prove it! But there are massively different skill sets involved, evidence of which is the almost total absence of examples of qango bosses migrating to the riskier area of private business.
In the muted competitive arenas of the public sector it is unlikely that the very high levels of remuneration presently enjoyed are required to attract the best candidates since so few have an alternative outside of the public sector; meanwhile the patronage provided such jobs and the plethora of opportunities in qangos offers serious risks of political appointees.