Former state premiers, Jeff Kennett and Campbell Newman, have attacked the bloating of the public service, claiming the federal government has too many agencies, is too big and top heavy, holds too many inquiries, and is spending almost $1 billion a year on advice. From The Australian:
Analysis by The Australian shows taxpayers are funding generous travel perks, salaries and cash top-ups for 156 senior officials, who are earning an average of more than $408,000 each.
Government agency chiefs and appointments, including some who have chosen not to work in Canberra, are receiving accommodation, first or business-class travel and reunion allowances. Another $10m is paid annually to government-appointed chairs and deputy chairs of government agencies and companies, including NBN Co, Australia Post, ABC and the CSIRO, in addition to daily fees and travel allowances.
Despite efforts in recent years by the Remuneration Tribunal to maintain “economic restraint”, the pay packets for some defence and national security agency chiefs have jumped between 33 and 68 per cent in five years…
Mr Kennett, who was Victorian premier between 1992 and 1999, said there were too many public agencies and inquiries, arguing the growth had been fuelled by the reluctance of politicians to make difficult decisions.
“On top of all of those you then get the federal government spending over $200m on consultancies, and the value of those consultancies is dubious at best. They overcharge and because it is government, the people doing the consultancy just rip the public off,” he said.
“You combine those figures together with the senior people in the public service, together with consultancies, and I wouldn’t be surprised if they are almost spending $1 billion for advice”…
This is a fair critique. Back in June it was revealed that Australia’s top bureaucrats were awarded massive pay rises:
Australia’s top public servants have been given annual payrises of up to $17,000 a year, as most of the rank-and-file of the federal bureaucracy still wait for their first general wage increase in four years.
At the top of the pile, Martin Parkinson, boss of the Department of the Prime Minister and Cabinet will be taking home a pay packet worth $878,000 a year after July 1.
Treasury Secretary John Fraser’s remuneration package will soar to $856,000 while further down the food chain, Foreign Affairs boss Frances Adamson and the yet-to-appointed new Defence Secretary will now each be paid $830,000-a-year…
A secretary running a mid-tier department like Human Services, Industry or Attorney-General’s would have been earning a salary package of about about $681,000 in 2013.
After July, that figure will be more like $746,000, an increase of more than 9 per cent, after the series of general and of “catch-up” increases.
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And in July, The Canberra Times reported that public service wages had grown the fastest at senior levels:
Median salary for level SES 3 positions grew to $327,000 last year – up 64 per cent from $198,994 a decade earlier. The growth easily outstripped every other public service ranking, which averaged 34 per cent at the APS levels.
The SES 3 pay rises were 14 percentage points higher than SES 2 jobs over the period and 21 percentage points higher than graduate wage growth.
Analysis by The Canberra Times of Senate committee data and the public service commission’s latest pay report shows the APS’ graduate jobs hit a median of $62,493 in 2016, up 43 per cent since 2006, while middle band positions including APS and executive level public servants only saw increases of between 32 and 36 per cent.
Pay for SES 1 positions grew by 44 per cent in the period, from $127,945 to $184,626, while at the SES 2 grade there was a 50 per cent increase from $159,856 to $232,272.
This is a very poor look in light of the negative real growth in average employee compensation:
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As well as the huge disconnect between public and private sector wages growth:
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Senior bureaucrats are making out like bandits at the same time as ordinary workers in the private sector are suffering.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
