The Remuneration Tribunal’s review of Commonwealth departmental secretary salaries should confront the large and poorly justified gap between top bureaucrats and the senior executives beneath them.
When last year the salary of the top Commonwealth departmental secretaries tipped over the magic million mark, Senator Jacqui Lambie’s blood, usually on high simmer, boiled over.
She introduced a Bill that would have capped these salaries at $430,000 per annum.
In doing so she cursed against what she called a “culture of obscene entitlement at the top of the Commonwealth bureaucracy” and invoked the infamously unreliable “pub test” to assert that the Secretary of the Department of the Prime Minister and Cabinet “shouldn’t be earning twice the salary of the Deputy Prime Minister.”
Lambie’s Bill was referred to a parliamentary committee and was later voted down.
Yet the Bill and its associated histrionics may have jangled nerves in relevant quarters.
While it has usually increased Secretary salaries annually in June, the Remuneration Tribunal recently “notified its decision to determine no adjustment to remuneration for public offices in its jurisdiction with effect from 1 July 2026.”
Then, in lieu of that usual leg up, the Tribunal announced a “comprehensive review” of Secretary salaries and issued a “consultation paper” with an invitation for comments thereon. This is a welcome change to the Tribunal’s usual methods in which it has kept its cards close to it chest.
The consultation paper provides useful background and explanation as to how departmental Secretary salaries got to their present level of inflation.
The rot set in with 20 per cent increase in exchange for the introduction of fixed period appointments in the 1990s under the Keating government. Fifteen years later the Tribunal came up with a much bigger boost yet without adequate explanation – because there wasn’t one.
Since then the Tribunal has adjusted Secretary salaries more or less in line with increases in other parts of the public service.
Now the lowest level of Secretary remuneration is $300,000 more than the average-median rate for Band 3s in the Senior Executive Service (SES), while the highest paid Secretaries are around $500,000 up on their subordinate Band 3s.
The Tribunal is inclined to argue that these gaps are justified so that Secretaries “remain distinct in remuneration terms”. But all classification levels need to be distinct in remuneration yet boss-subordinate gaps in other levels of the public service are typically around 10 per cent, not the 60-100 per cent they are with Secretaries and SES Band 3s.
The Tribunal is right to say that the relationship between Secretary remuneration and that of the SES is important in setting Secretary salaries. Indeed, as the vast majority of Secretaries are appointed from within, this relativity should be the most important factor while remuneration in the private sector executive market is irrelevant.
Determining a proper relativity is befuddled by the disgraceful shambles departmental Secretaries and the Public Service Commission have created in classification and remuneration in the SES.
In the most recently available survey of this category (2024), the maximum recorded remuneration for a SES Band 3 was $1,222,037 and the minimum was $397,068 while the maximum of a SES Band 1 exceeded the minimum of an SES Band 3 by more than $100,000. So much for the Tribunal’s admirable principle of different levels being distinct in remuneration terms. That principle has been trashed in the SES by departmental Secretaries who have benefitted from its application by the Remuneration Tribunal.
It might therefore be right and fitting for Secretaries to have their irresponsibility with SES remuneration exorcised by a cut to their pay, especially if that would provide an incentive for them to clean up the unholy remuneration mess they’ve made.
So, a gap of 30 per cent between the average-median rate for the top of the SES and the bottom level of Secretary with gaps of $30,000 between say two further levels of Secretary remuneration, would give a structure of $650,000/$680,000/$710,000 against the current levels of $825,550/$880,340/$983,910/$1,009,790/$1,035,690.
Such a cut for Secretaries would be not much different from the unjustified increase the Tribunal gave them 15 years ago. Moreover, a range of $650-710,000 would put the Commonwealth rates more or less in line with comparable positions in State governments, a factor the Tribunal discounts but should not.
A range of $650-$710,000 would not affect recruitment of Secretaries as it provides a significant increase over the average-median SES Band 3 level. Moreover, for half a dozen or so Secretary vacancies a year there a pool of around 180 direct subordinates most of whom would find irresistible the extra power and prestige they’d gain by being lifted up.
Likewise, retention is unlikely to be a worry. Very few Secretaries have been lured into the private sector. They are creatures of the public service with experiences, habits and temperaments not ideally suited to corporate entrepreneurial life. And what’s a couple of hundred thousand dollars when you can remain part of the family and work away on things of far more community consequence than is to be found in just about any private company?
The odds of Commonwealth departmental Secretaries taking a pay haircut must be long. Still, the possibility is on the table and the Tribunal’s discussion paper talks about transitional arrangements if it were to come about. Meanwhile, the Prime Minister has said that the reasons the Tribunal is having a look at the question “speak for themselves”. Then in a disheartening display of leadership reticence, neither the Secretary of the Department of the Prime Minister and Cabinet nor the Public Service Commissioner has been prepared to defend the current levels of Secretary pay or propose alternatives by responding to the Remuneration Tribunal’s consultation paper.
So the chances of something sensible happening may be more than zero. And if Pauline were to grab the reins goodness knows craziness what she might ring in under the guidance of Gina Reinhart, Barnaby and the un-Australian diktats of monoculturalism.
Paddy Gourley is a superannuated Commonwealth public servant.