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Pay for public service chief executives decreases

20 November 2019

State Services Commissioner Peter Hughes has today published the State Services Commission’s Senior Pay Report for the 2018/19 financial year.

The Senior Pay Report discloses the total remuneration paid to State sector chief executives in the 2018/19 financial year, from 1 July 2018 to 30 June 2019. It is the fourth report published by Mr Hughes.

The average pay for public service chief executives increased 1.2% in 2018/19 compared with a 2.3% increase for chief executives in the broader public sector and 2.9% in the private sector.

Overall, however, the Commissioner’s conservative approach has resulted in the average salary package paid to public service chief executives decreasing 4.3% in 2018/19. The average salary package paid to public service chief executives in this year’s report is $478,000, compared with $500,000 in 2017/18 and down from $504,000 in 2016/17. This represents a 5.1% decrease since 2016/17.

This was achieved by:

appointing chief executives at the lower end of the salary ranges
removing performance pay for public service chief executives
taking a conservative approach to reviews.

There are also fewer (down from three to one) chief executives being paid at the top end, above $650,000.

“In the 2017 senior pay report I said the upward trajectory of public service chief executive salaries, especially at the top end, was not sustainable and this needed to change,” said Mr Hughes.

“The net result over the last three years is a 5% decrease. We now have a better balance between being fair to individual chief executives, recognising the jobs they do, and being fair to the taxpayers who pay the bill.

“The decrease in the last 12 months is largely due to the removal of performance pay, but that is a lever I can only pull once. I intend to keep applying downward pressure on the rate of increase where I can but after three years of constraint it would be unrealistic to expect another decrease. I would expect modest average increases to occur each year, which is reasonable.”

Under changes to the Crown Entities Act, which came into effect on 31 October last year, the Commissioner has more oversight over the setting of salaries for Crown entity chief executives.

Before the changes came into effect, three Crown entity Boards implemented remuneration levels the Commissioner did not support.

“That won’t happen again,” said Mr Hughes. “I am working closely with Crown entity Boards to implement a conservative approach to chief executive remuneration, similar to what is now in place for public service chief executives.”

From now on, chief executive remuneration will be published quarterly on the Commission’s website, rather than annually. And the data is presented, also for the first time, in actual dollar figures rather than $10,000 bands.

“This means the data will be more up to date and more directly comparable, which increases transparency,” said Mr Hughes.


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