16 June 2022

Pay rise for politicians, judges and top public servants

| Ian Bushnell
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Government building with Coat of Arms and Australian flag

The pay rise applies to senior public servants, federal judicial and related offices, parliamentarians and other part-time Commonwealth offices. Photo: Michelle Kroll.

Federal politicians, judges and senior public servants will get a 2.75 per cent pay rise from 1 July, the first since 2019.

This will take a Member of Parliament’s base salary to $217,060, and the Secretary of Prime Minister and Cabinet to $939,610.

The Remuneration Tribunal said its decision came against a background of rising inflation and wages, and it had taken into account the fact that there had not been an increase in the preceding two years due to the pandemic.

But the Tribunal said that, more importantly, there was the need to attract and retain talented and capable people to these public offices.

“The Tribunal’s primary focus is to provide competitive and equitable remuneration that is appropriate to the responsibilities and experience required of the roles, and that is sufficient to attract and retain people of calibre,” the Tribunal said.

“Many of these officeholders do not expect or require that monetary compensation for their roles in the public sector be set at private-sector levels. Rather, officeholders serve for the public good and in setting remuneration, the Tribunal has traditionally set rates below those of the private sector.

“In reaching its decision, the Tribunal was mindful of its history of restrained increases over several years, including no increases since 1 July 2019.”

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The Tribunal said new PM&C secretary Glyn Davis would receive the general increase of 2.75 per cent, the office being at Level 1, with remaining pay points set at 2.5, 5, 10, 15 and 20 per cent below that rate.

At Level 2, Treasury Secretary Steven Kennedy’s pay will rise to $916,120, with Level 3 Paypoint 1 at $892,630, Level 3 Paypoint 2 at $845,650, Level 4 Paypoint 1 at $798,670 and Level 4 Paypoint 2 at $751,690.

Level 3 Departments are Agriculture, Fisheries and Forestry; Climate Change, Energy, the Environment and Water; Defence; Education, Employment and Workplace Relations; Finance; Foreign Affairs and Trade; Health and Aged Care; Home Affairs; Industry, Science and Resources; Infrastructure, Transport, Regional Development,
Communications and the Arts; and Social Services.

Level 4 Departments are Attorney-General’s and Veterans’ Affairs.

The Tribunal said it had considered the Federal Government’s Budget outlook as well as the general economic conditions, including private and public sector pay.

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In the year to March, public sector wages grew 2.2 per cent annually, 2.4 per cent in the private sector and 2.4 per cent overall, compared with the 2021 figures of 1.5 per cent in the public sector, 1.4 per cent in the private sector and 1.5 per cent overall.

In 2020, the Morrison Government tied public servants’ pay to the private sector at a time when wage growth had tanked. Public servants also endured a six-month wage freeze during the pandemic.

That pay policy is still in place, but under the new Labor Government, it is expected to change as part of a commitment to negotiate pay and conditions in good faith.

Labor has also promised to rebuild public service capability, reduce the number of consultants and contractors and cut waste.

The ruling affects senior public servants, federal judicial and related offices, parliamentarians and other part-time Commonwealth offices.

On Wednesday (15 June), the Fair Work Commission awarded 2.7 million low-paid workers a 5.2 per cent pay rise, in line with inflation, worth around $40 a week.

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Judges truly deserve a pay rise. The work they perform is incredible.

Capital Retro2:52 pm 21 Jun 22

Are you an economist, trancex3?

If you want better performance, tie politicians and public servant’s salaries to the general state of the economy. The broader public is doing well, pay them more, the general public is doing it hard, lower their pay.

I think that would be the worst thing you could possibly do.

Considering how much the economy is impacted by global factors and how it would incentivise extremely short term thinking, rather than considering structural changes that provide long term benefits.

Not a serious suggestion, but I think you do want to find ways to align incentives in the right direction. Most problems are bad incentives.

HiddenDragon7:22 pm 16 Jun 22

The top APS salaries are comfortably above the rates for comparable jobs in Canada, the UK and the US, each of which has private sectors larger and richer than Australia competing for executive talent, so the recruitment and retention argument which is dished up by the Remuneration Tribunal is a little difficult to swallow – unless the real point is about the difficulty of recruiting and retaining the right people in Canberra (compared to Ottawa, London and Washington).

Hidden Dragon,
Have you ever considered that the pay rates in the US and UK are too low?

Considering some of the holders of top public roles in those countries in recent years, perhaps they would have attracted better talent with greater pay.

In the US in particular, these types of roles seem to attract those who are extremely well connected, already rich and who often have a drive far more about getting and maintaining power, rather than those who truly want to serve their country.

While I don’t necessarily agree with the 2.75% pay rise handed out to these people, their salaries almost pale into insignificance when you look at some of the executives in private enterprise as reported in Nov last year (https://www.afr.com/work-and-careers/leaders/revealed-australia-s-50-highest-paid-ceos-20211117-p599rf).

Nobody here seems to care about their exhorbitant salaries, while thier workers struggle to get any pay rise whatsoever.
As an example, “… National Australia Bank’s Ross McEwan saw his remuneration rise $2.98 million …”. That’s a RISE in his salary in the 12 months to 30 June 2021 of $2.98m.

He has to work for his salary

So what? if you think his job’s so easy you be the CEO of NAB. There are reasons poor people are poor and rich rich. Much more to do with intelligence, work ethic and experience than plain dumb luck.

Oh please, Sam Oak. So running NAB is harder than running the country by a factor of 10 or more? Furthermore, are you suggesting that ScoMo became PM through dumb luck?

JS I said politicians are grossly underpaid and the NAB CEO is paid appropriately according to market wage determination. I also said the minimum wage and Jobseeker rates are fair if not too generous.

Clearly said by someone who has zero experience trying to live on minimum wage or dear goodness jobseeker rates…… but hey – as long as your okay buddy, then stuff anyone else hey?

Well, Sam Oak, I suppose those who are on the minimum wage and Jobseeker can use the generous government tax concessions they receive from their investment properties to supplement their welfare/wages

Have a look around the globe, there are billions living in poverty in a far worse situation that the “poor” in Australia living on social welfare. I got to where I am due to my skills, hard work and business acumen. It’s on others to earn money and be of use to society. If Jobseeker was too generous nobody to work!

While I have no time for the parasitic ‘dole bludgers’, there are many people who are on JobSeeker through no fault of their own and are (because of age or lack of experience) unable to find work. The unemployment rate is much higher than reported – due to the clever number crunching and misleading ’employed’ definition applied by those who put the figures together. It would be a far different story if the relevant statisticians were allowed to report on under employment instead. I have no idea how anyone can actually survive on $44.00 a day – to house, clothe and feed themselves, yet you think it’s generous!
Then there are those hard working people on minimum or a relatively low wage, who are working their butts off and still struggling to make ends meet. Your solution seems to be that they should just work harder.
Like you, I am in the fortunate position of not having to decide which bill I will put off paying this month due to limited financial resources. However, unlike you I’m not so conceited as to think that those who are worse off than I, are in that position through circumstances totally within their control.

Scum, bottom dwelling pollies should have a $50k reduction in pay

I agree with you, Futureproof – but I think you’ll find they don’t remain pollies for long and a lot of the pollies you have described have actually ended up in jail.

Well JustSaying, we agree on something. I think politician salaries should be aligned with the APS. Back bencher gets a EL1 wage (and allowances), committee member gets EL2 wage and allowances), Minister gets Band 1 wage (and allowances), Speaker gets Band 2 wage (and allowances), Deputy PM gets Band 3 (and allowances) and PM gets whatever a Secretary of a Department gets (and allowances)

Well, FutureProof, it’s such a shame that your myopic view of politicians is outweighed by your lack of knowledge of what they actually do. I assume that huge chip on your shoulder has been fitted by a professional tradesman as you, as you seem to have no issue perpetually carrying it around.

No chip on my shoulder. I just cannot stand politicians. They’re the residue on your shoe after walking through a dog park

Interesting perspective you have, Futureproof. Those politicians, who you would deny a reasonable salary for thir work effort, are the very people who represent the democracy that allows you to sprout your ill-informed, malcontent vitriole.

Amanda Kiley8:32 am 16 Jun 22

If you can’t keep up with cost of living increases on a salary at between $300k and $900k, then you have a huge problem. Those on mich, much lower wages have to deal with them without at $100k payrise, which is roughly what the head of PM&C received.

What, you’d deny them a wage to pay for their Ski Chalets?

Yet Amanda Kiley, you have no problem with the $2.98m pay rise the hesd of NAB receIved last year – while the general NAB employees

So, FutureProof, are you jealous of anyone who has a ski chalet, or just politicians and senior public servants who may own one?

JustSaying, I’m not jealous of anyone who is rich. I just can’t stand politicians – they cause all of the problems. I wouldn’t waste a bucket of water if they were on fire

Capital Retro2:15 pm 18 Jun 22

I started my first job with the NAB (NBA as it was called then) in 1963. I was one of the slaves, no such thing as a “general employee”.

My wage was $9 a week plus $1.50 living away from home allowance. I doubt if the whole capitalized value of the bank would have been worth $3m then.

Interesting that there is no “productivity gain” attached to their pay rises – unlike in the APS where pay rises negotiated through Enterprise Agreements are required to have such an offsetting productivity gain.

Politicians’ salaries are disgustingly low I agree. Imagine being a leader of a country and only earning $200k! They may as well get second jobs on the minimum wage to supplement their pay.

Amanda Kiley8:35 am 16 Jun 22

You know it going in, but I agree. If we paid them more we’d definitely have better quality politicians.

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