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Public service salary increases out of whack

Wednesday, October 26th, 2005

Public service salary increases out of whack with private sector

In recommending salary increases of 15 per cent with more to come for the heads of our Government departments, the State Services Commissioner seems to be reading different data from the rest of us, the Employers & Manufacturers Association (Northern) says.

"A lot of ceo's in the real world of market competition would dearly like to have a base salary of $400K plus with no responsibility for income generation," said Bruce Goldsworthy, EMA's Manager of Advocacy.

"That's the level of salaries reportedly paid to our top government officials.

"The basic remuneration of managing directors in the private sector went up by an average of just five per cent this year, to $156,000. (6.8 per cent in 2004).

"The data is from our Wage & Salary Survey for ceo's with 50 to 199 employees. The survey has been running nationally for 11 years.

"Business would support 15 per cent pay increases for the top Government officials if their remuneration was based on their ministries and departments financial performance.

"For example, they could be charged with cutting their departments' wages bill overall by the amount of their salary increase.

"When a government agency reduced its operating costs by 15 per cent a salary increase of that amount would be entirely reasonable. Where there is a 'poor performance' mishap no salary increase should be paid.

"Business would also recommend a significant proportion of public service salary increases should be based on performance as they often are in the private sector.

"But the wages and salary bill for the public service overall has been going up by over $600 million a year and is now well over 32 per cent more than in June 2000.

"Public servants have been getting higher pay increase than in the private sector while robbing the private sector of the skills required to grow the economy and our standard of living.

"Though many government departments employ far more staff than private businesses, in most instances their chief executives are not required to generate income from sales in highly competitive markets.

"So it's not realistic to compare a CEO in the public service world with one in a private/public company. It's not comparing apples with apples."

ENDS

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