Secret report allows SA public servant chiefs to seek large salary increases

TAXPAYERS are facing pay-rise demands of up to $200,000 from public service chiefs after a State Government-commissioned report recommended they be awarded massive increases under “special circumstances”.

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TAXPAYERS are facing pay-rise demands of up to $200,000 from public service chiefs after a State Government-commissioned report recommended they be awarded massive increases under “special circumstances”.

Bureaucrats earning more than $400,000 have been using the report to seek bigger pay rises, including five CEOs last year.

A Freedom of Information investigation by The Advertiser led to the release of a report ranking CEOs across four levels. The highest increase under “special circumstances” would go to the head of the Department of Education and Child Development.

His salary would increase from $397,351 to a maximum of $637,400, if the premier decided this was warranted under “special circumstances”.

The recommendations can also be considered when the CEOs negotiate their next pay rise, at the end of their current three-year contracts.

The report was written for the Department of Premier and Cabinet, and was paid for by the taxpayer, at a cost of more than $10,000.

Premier Jay Weatherill, who would determine the special circumstances, only receives $300,000 per year.

What the heads earn — and what they could be earning.

In December, The Advertiser reported that SA Health boss David Swan and Education and Child Development Department chief executive Tony Harrison — who run two of the “most poorly performing” State Government departments — had received pay rises of $67,000 and $51,000 earlier in the year.

Welfare groups have condemned the growing gap between the highest paid public servant — who would be paid $637,400 each year if the scheme is approved — and the lowest-paid fulltime government workers who earn $25,544, or $41,200 when they reach 20 years of age.

Uniting Communities anti-poverty campaigner Mark Henley called on the government to introduce a policy that would restrict the highest-paid government worker to a salary that is no more than 15 times the lowest-paid worker.

“The critical issue is about relativities and thinking about highest salary in an organisation as a multiple of the lowest,’’ he said.

“No public servant should be paid more than 15 times the lowest-paid worker, so that would be 15 times minimum wage for public service CEOs — and corporate CEOs too, for that matter.’’

The average public servant is granted a wage rise of around 3 per cent each year.

The Advertiser lodged an FOI application after the report, prepared by Mercer consulting last year, was used to justify pay rises for five of the 13 CEOs, to elevate them to the “mid range” of salaries identified in the report.

This has already taken the Department of Education and Child Development’s chief from $397,351 to $450,000, despite heading the most scandal-ridden area in the public service. It has also led to the Head of Treasury and Finance, increasing from $411,319 to $471,200, despite current budget savings forced on departments by treasury.

But another two CEOs — the heads of the Department of Premier and Cabinet and Department of State Development, who the Mercer report found were paid $60,000 too much in comparison to their colleagues — will not have their pay reduced.

When asked about the report, a State Government spokesman said: “Any change in salary is considered through annual performance reviews or contract renegotiations. There is no intent to change this process as a result of the Mercer report’’.

In December last year, when The Advertiser asked the State Government to explain the pay rises for the five CEOs, it was told salaries had been benchmarked against comparable roles in other Australian states and “are either equivalent to, or less than, those salary rates”.

But the Mercer report shows the known pay rates of Victorian department CEOs were less than those in SA and the lesser pay rates of Tasmanian CEOs were left out of the comparison.

A State Government spokesman maintained that “The report shows that South Australian Chief Executive salaries are either equivalent or less than those salaries in other Australian jurisdictions’’.

On the question of top rates of pay for high-achieving CEOs, the report states: “Mercer recommends that the section between the midpoint and maximum be reserved for special circumstances at the discretion of the Premier”.

Department heads fall into four rankings, depending on the size of the organisation.

The report shows:

ONE chief executive on the lowest ranking, who is currently on a midpoint salary of $277,800 each year, could boost their pay to $319,500 each year.

ON the next higher ranking, three heads on an average of $360,400 could be boosted to $414,500.

THE five heads on the second highest ranking, with an average salary of $463,500 could be paid $533,00, and four CEOs on the highest ranking with an average of $554,300 could be paid $637,400.

The formula used by Mercer to justify the pay increases was not released under the Freedom of Information application because it was commercially confidential.