City of Melbourne spending big on executives

The City of Melbourne has revealed why its spending on “executive services” has surged in the past two years.

City of Melbourne’s spending on ‘executive services’ has quadrupled in two years. Picture: David Crosling

The City of Melbourne’s spending on “executive services” has quadrupled in two years.

The city’s annual ­report shows that spending on executive services surged from $11.1m in 2019 to $46m in 2021.

But the council insists the year-on-year figure is not an “apples with ­apples” comparison” because the pandemic forced structural changes and generated new operating costs.

It is believed some staff and operating costs were transferred into the executive services division from other areas of the organisation, which partly explained the higher costs.

The executive services division ­incorporates the chief executive and Lord Mayor’s office, as well as departments such as councillor liaison, strategic communications and marketing.

Lord Mayor Sally Capp pictured outside Melbourne Town Hall Picture: Mark Stewart

The council stressed that overall staffing costs had reduced – from $169.7m in 2020 to $167.1m in 2021.

However, a breakdown of senior officers at the council, available through annual reports, revealed the number of employees on wages from $150,000 to $160,000 increased from 14 in 2020 to 51 last year.

Fifty-five employees were paid $170,000-$180,000 in 2020, but that figure dropped to just five people a year later. The number of higher-paid staff who fell within the $230,000-$240,000 bracket increased by three – to eight – while four people were promoted to roles that paid up to $260,000.

Sources close to Town Hall said that while the overall wage costs were down slightly, the cost of senior staff had increased significantly.

They said that may indicate people in lower-paid roles were leaving the organisation – reducing the overall wages bill.

Ratepayer Victoria spokeswoman Verity Webb said the apparent executive pay blowout was an “excellent ­example” of the “contempt for ratepayers” of local councils.

“Expenses for council wages and contractors are rising around Victoria much faster than household income but council CEOs don’t care what residents think – because our state MPs gave CEOs free rein with rates when they passed the new Local Government Act in 2000,” she said.

Melbourne City council CEO Justin Hanney said overall staffing costs have gone down since the pandemic began. Picture: Aaron Francis

“Legally, CEOs can spend whatever they like on contractors and ­executives. They can spend money on rainbow roads and banana statues at the same time as they cut basic services like rubbish collection and footpath maintenance.

“Not even the minister can prevent stupid spending decisions by council CEOs. This is all because of inept legislation passed by thoughtless MPs.”

City of Melbourne chief executive Justin Hanney said overall staffing costs had reduced by $2.6m since 2020, which allowed the council to reinvest in critical initiatives.

“We are acutely aware of the economic circumstances continuing to face many Melburnians as a result of the pandemic, which is why we have embarked on the most ambitious four-year plan in council history – to reignite our city and support residents and businesses,” he said.