The public service ‘$10m club’

A must read from Robert Gottliebsen in the Oz.  Released earlier today and likely to be in the print edition tomorrow – Counting the cost of the public service ‘$10m club’.

Gottleibsen has written on this subject before, but this time he hits it out of the park.  Here is a relevant paragraph:

Australia’s senior public servants have engineered massive benefits, including obvious rorts, that are not funded and will need to be paid from future revenues. The anomalies have been highlighted by the so called “ten million dollar club”—the public servants whose “entitlements” have a market worth of more than $10 million but who engineered massive reductions in the superannuation entitlements of ordinary Australians.

Disgraceful.  Unsurprising.

Howz that for conscious bias

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36 Responses to The public service ‘$10m club’

  1. John Brumble

    Why, that’s appalling. We’ll need another government department to monitor this sort of thing.

  2. Aussieute

    When the proverbial hit’s the fan Mum and Dad get their super gutted.
    NOT the public service.
    yet again … one rule for the politicians and bureaucrats and one for the rest.
    Time to drain the swamp.

  3. Myrddin Seren

    Whisperin’ Bob is probably about to be audited by the ATO from now until Doomsday.

  4. .

    That’s DOCTOR Martin Parkinson PSM, thank you very much?

  5. .

    Maybe they should be cashiered out of service when said entitlements hit 5 mn?

    “You’ve done well, now try your luck in the markets which have subsidised your good fortune”

  6. H B Bear

    Keating’s superannuation is one of the biggest con-jobs ever foisted on Australia. Nice work if you are a fat cat on a defined benefits plan though.

  7. Davo

    Guys, couldn’t agree more, that the Canberra fat cats and top of the trees PS in states are vastly overpaid; but don’t forget most public servants (esp in state services) are not paid extra ordinarily and don’t have massive supers, and certainly only some states have the old pensions

  8. Mother Lode

    And yet, for all the money they are paid, the service provided to the Australian people is gobsmackingly sub standard.

    That can’t innovate, they don’t ‘lead’ in anyway, they don’t inspire any loyalty or engender any trust, they never achieve their stated aims, can’t stick to a budget – the entire PS is 90% waiting room filled with people with nothing to do, and 10% disintegrating personalities whose vision over their career progressively narrows and shortens until they see nothing but each other and a bucket of money.

  9. Squirrel

    When governments are being advised by officials who are very, very comfortably insulated by incomes ten or more times the average paid to Australian workers, it is hardly surprising that our rulers have trouble seeing anything much wrong with the current state of affairs, and seem more concerned with lovely, shiny big picture stuff than with the petty concerns of the little people.

  10. Roger

    Won’t someone drain the fetid billabong that is Canberra!?

  11. .

    certainly only some states have the old pensions

    I thought this was phased out by now.

  12. miltonf

    Damaging the real economy through a combination of malice and incompetence but sacrifice is for other people.

  13. Suburban Boy

    These ‘rorts’ and the lousy policy these overpaid bureaucrats implement are not created by the public service.

    It is the endless supply of even worse politicians who decide the policy that has damaged our country and will damage it further. It is the politicians who decide how much in super the public servants get. It is the politicians who are responsible for the morass.

    By all means have a whinge about overpaid, substandard bureaucrats, but never lose sight of who is ultimately responsible for the foul stench coming from Canberra.

  14. Once I believed in the intrinsic good in every individual. And I actually think that was the case. These days however I think most people are corruptible at some level! Wonder why the change? Look at out political and business leaders – lies, deceit and rorting are the normal, in fact if you don’t engage in this type of conduct you aren’t part of what is accepted anymore.

  15. miltonf

    I suspect that most of the time that the politicians are just sock puppets of senior pubes. Morison said as much when he demanded we defer to the ‘experts’.

  16. Roger

    Once I believed in the intrinsic good in every individual. And I actually think that was the case. These days however I think most people are corruptible at some level!

    Let me introduce you to the doctrine of original sin, Garry.

    Once upon a time, the framers of Western democracies believed in it and devised our polities accordingly.

  17. .

    Let me introduce you to the doctrine of original sin, Garry.

    Once upon a time, the framers of Western democracies believed in it and devised our polities accordingly.

    WTF?

  18. Neil

    Nice work if you are a fat cat on a defined benefits plan though.

    Costello put an end to those. But they all get 15.4% Super, much higher than most. No way should Public Servants get higher wages and higher Super than people in private sector. In fact I think nobody in the PS should earn more than the PM

  19. Tezza

    Calm down, Sparticus.
    The most generous old Commonwealth Super Scheme was closed over a quarter-century ago, in 1990. Its successor, the less generous PSS defined benefit scheme, was closed over a decade ago in 2005. It’s a legacy problem, arising from governments of the day not paying liabilities as they accrued. It’s not a personal moral failing of the employees, who always paid their own contributions and their taxes. Thoughtful cats oughtn’t respond by advocating tearing up the contractural framework that governed the savings of a working lifetime of previous generations of teachers, soldiers, nurses etc.
    Public servants privileged to be members of the old schemes (and younger public servants too) were subject to the same 2017 reductions in super entitlements as ‘ordinary Australians’. In particular, the actuarial value of the old defined benefit schemes was captured within the $1.6m cap by deeming. The basis for that deeming was quite disadvantageous to retirees who were already elderly.
    I agree it is annoying that some politicians and the current crop of late-career advisers who joined the earlier schemes more than a quarter century ago walk both sides of the street on the policy issues, but the Grim Reaper will solve that annoyance in the foreseeable future. No need to let envy drive bad, Qantas-style policy responses, as Gottliebsen seems to be proposing.

  20. .

    So the US Constitution is because of original sin?

  21. Roger

    “It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”

    James Madison

  22. .

    You mean free will. Maybe you’re right.

  23. Roger

    The free will of fallen man tends to corrupt (self-serving) ends.

    It was not meant to be so, but it is.

    The founding fathers of America built checks and balances into their system of government on account of this belief.

    The devisers of the English system going back to the Magna Carta did likewise, although they never had such a clean canvas to work on as the Americans did.

  24. duncanm

    name and shame.

    how many does $10M cover?

    Surely its not > $10M pp ? Gobsmacking, if so.

  25. egg_

    DOCTOR Martin Parkinson PSM

    Is this blog jerkoff angling for a Parliamentary career?

  26. .

    Well, he had to remind the Senators that they were lowly Senators and not to call him “Mr”.

    Quite frankly I’d strip his Ph D for being associated with Rudd and Gillard, but I am an extraordinarily fair and reasonable man.

  27. The work force has been politicized with benefits for public servants and union that the private sector trying to sell their goods and services cannot compete with. At the moment there is a massive shift of preference to be employed by govt . The budget deficit can be fixed , super is at 9 .5pe ceNt rather than 14.5 per cent and tax the super contributions of “constitutional protected funds” (cpf). These funds do not pay tax on contributions received nor on ther earnings while the employees are working. The advantage to these people at retirement is huge.

  28. Mundi

    The $10m is per person. Think about those retiring at 65 who then get to pass on the life pension to a wife.

    Not surprisingly many seem to marry a young bimbo in the latter years, now she gets 60% of the pension for life.

    If you add up all the money paid, and work out what normal super account would have to be to pay it all, it comes to over $10m. This is easy to reach when pensions can be 80%+ of final salary.

  29. EvilElvis

    Guys, couldn’t agree more, that the Canberra fat cats and top of the trees PS in states are vastly overpaid; but don’t forget most public servants (esp in state services) are not paid extra ordinarily and don’t have massive supers, and certainly only some states have the old pensions

    This shit isn’t going to fly for much longer. Those lowpaid super benefits are still more than a private sector employee and are attached to irrelevant, administrative, progressively more oppressive positions that produce nothing. They vote for this crap, the lot can burn.

  30. Petros

    Is the $1.6M super cap indexed to inflation or is this another bracket creep type shafting?

  31. John Bayley

    Contrary to what several posters above seem to think, the old defined benefit public sector super plans have not been shut down. They were only closed to new members, however the existing ones have been allowed to run their course till the member (or his/her spouse) dies.
    They are also largely unfunded; from memory only the Queensland Qsuper defined benefit is fully funded – thanks to some guy called Joh.
    This is why the PSS/CSS (federal) plans have future unfunded liabilities in the tens of billions. Because their members have by now all been there for decades, many are in senior positions, so the generous formulas determining their expected individual retirement benefits are showing numbers well into the six figures.
    And let us not forget the benefit typically passes to the spouse should the primary beneficiary die.
    IIRC, funding this hole was Costello’s reason behind setting up the Future Fund with the proceeds of the sale of Telstra.
    Alas, as with all such things, it will be the old, reliable Jim and Jane Taxpayer picking up the bill.
    And on another note: While many public servants do not earn huge money, they do, on average, now earn more than their private sector counterparts. Yes – that would be Jim & Jane Taxpayer again, who have had no real pay increases for at least 3 years now but still get to fund the public sector, with its ‘AWOTE’ scheduled payrises, in its entirety.

  32. John Bayley

    Is the $1.6M super cap indexed to inflation or is this another bracket creep type shafting?

    Supposedly so, but then again, when Costello brought in the ‘new’ superannuation system back in 2007, the ‘concessional’ (i.e. tax deductible cap) was $100,000 p.a. and the non-concessional was $150,000. Both were supposed to be regularly indexed.
    Plus of course there was no $1.6M limit.
    Now here we are, 11 years later, and the former is $25,000 while the latter is $100,000, and if that’s not enough, three-step taxation (entry, earnings, exit) is back.
    And not to forget – if you happen to be lucky enough to pay tax in the 47% personal bracket, your super contributions are now taxed at double the usual rate (30% – thanks, Mr Morrisswan!)
    So what do you think will happen with the indexation of the $1.6M under a Shorten/Plibersek/Bowen government?
    I expect it will be ‘indexed down’ to the ‘fair and equitable’ level of around $800K, to bring it into line with the upper limit for Age Pension asset testing.
    That’s what the comrades want, and what they want they will get.

  33. Des Deskperson

    ‘I suspect that most of the time that the politicians are just sock puppets of senior pubes. Morison said as much when he demanded we defer to the ‘experts’.’

    Maybe forty years ago; these days, Portfolio Secretaries are political appointments, chosen by the Minister without the need for a merit based selection process. If they fall out of favour with their Minister – if they don’t or can’t do what the Minister wants – they can be sacked at any time for any reason, as former Secretaries Paul Barrett and Paul Grimes found out.

    I haven’t done the math, I would be surprised if there were many APS Portfolio Secretaries who have been in their jobs for more than 5 years or even previously worked in the same department for that long.

    Please be clear that I’m not justifying their super arrangements. I haven’t read the Gottliebsen article, which is paywall protected, and I can’t find it in the print addition of my Oz this morning.

  34. PoliticoNT

    Not in today’s print edition. Has anyone got a full copy of the text?

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