Suncorp CEO Steve Johnston calls for shake up in public service salaries

The boss of Queensland’s largest company has a suggestion on how to overhaul public servant fat cats’ pay, and it might not go down well in William St.

We hear there was a collective clutching of chests by the Sir Humphrey Applebys inhabiting the Tower of Power down in William St when Suncorp boss Steve Johnston suggested at a business lunch that their salaries should be tied to – shock, horror – actual performance.

Johnston told the QUT Business Leaders’ Forum on Wednesday that the pandemic had underscored the fact we have to shift top people to the pointy end of government.

Part of that could mean a move to performance-based remuneration much like the private sector.

The Courier-Mail revealed earlier this year that some of Queensland’s top public sector bosses have pocketed tens of thousands of dollars in bonuses despite Covid-19 taking a sledgehammer to the state’s economy.

Analysis of government data reveals the chief executives of Queensland’s most prominent government-owned corporations have been paid millions of dollars in take-home pay and benefits.

Johnston quoted former US President Ronald Reagan who once said “the best minds are not in government and if they were business would have to steal them away.”

“I don’t happen to agree with him as we have some very good people in the bureaucracy,” Johnston told the forum at the Hilton Hotel.

Tower of Power at 1 William St

While public servants have largely risen to the occasion during the pandemic, he says we need to prepare the bureaucracy for future crises.

“I am a supporter of a greater transfer of skills from the private to the public sector much like the system they have in the US where corporate leaders are appointed to government posts,” he says.

The former government policy advisor says he is concerned about a narrowing of the gene pool in public policy which meant there was an imbalance of skills.

Johnston added he is all for hiring top local talent in both the corporate and public sectors rather than enlisting them from overseas.

Before his move into the financial world, Johnston served as Telstra’s general manager for corporate government affairs where part of his job was briefing top US businessman Sol Trujillo on his new role as chief executive of the telecom giant.

Johnston was not sure how much due diligence Trujillo had done on Telstra noting the American seems unaware of many of its operations including the stipulation to provide telecom services across the country, not just in major cities.

To be fair, Johnston says Trujillo was a quick study and went on to be a very effective boss at Telstra.

SQUEAKY WHEELS

It used to be that small shareholders - usually little old ladies - would turn up at the annual meetings of public companies for the sausage rolls and cakes after the event.

Now those small investors are more likely to be eco-warriors eager to ask the captains of industry about their policy on carbon emissions and global warming.

Suncorp’s Johnston says that Queensland’s largest company may have 1.6bn shares but investors holding just three shares asked six questions at its recent annual meeting. Most of those revolved around issues of climate, something Johnston is well aware off given his bottom line is often impacted by natural disasters such as cyclones, bushfires and floods.

YOUTH ANGST

Johnston fears the kids are not alright with the young not only shut out of the property market but lumbered with generational debt accrued during the pandemic.

Johnston is concerned the fight against Covid-19 had been focused on protecting our elderly but it was the young who now faced having to pay the costs of that battle.

Johnston told the forum, sponsored by the Courier Mail, that was already being seen in rising housing prices that were preventing many young people from buying their first home.

“The risk is that there will be a rising intergenerational imbalance with the focus on protecting the elderly during the pandemic now impacting the young who face the debt,” says Johnston. “There also is concern that the pandemic will cause economic, social and psychological dislocations.”

Housing prices are booming pricing many out of the market

He notes that the average mortgage in Sydney had doubled in the last five years to $700,000 while in Brisbane it was approaching $450,000. “You have to ask if that is sustainable,” said Johnston, a former government policy advisor before he became a banker.

The 55-year-old, who has a son and daugher in their early 20s, says he has been left “scratching his head” at some of the surging prices of real estate around the country.

“There should be some sort of package for the young, whether that is in the form of first home buyer assistance or help with university costs,” he said.

Queensland’s top finance chief also is concerned the pandemic could make young people more insular, with missed schooling and overseas travel likely to have an impact over the long term.

“Two years is a big chunk of time for a young person and they have missed out on rites of passages like overseas travel,” he says.