Secret report reveals super-sized pay of road and rail executives

The Andrews government has defended the $12m combined salaries of 25 Big Build bosses, claiming it needed “to find the best people for the job” in a competitive labour market.

The state government has defended the super-sized salaries of Victoria’s leading public sector road and rail executives revealed in a secret report.

The inflated wages, which have been blamed on “supply and demand” issues, that has pushed the combined salaries of 25 Big Build bosses beyond $12m a year.

Some executives are being paid double the salary caps in place for public servants in equivalent roles in other departments – and up to 70 per cent more than Premier Daniel Andrews.

But Acting Victorian minister for Environment, Lily D’Ambrosio, said the government had to compete in the labour market in order “to find the best people for the job”, citing the mounting pressure from the private sector to invest in the state’s big infrastructure projects.

“This is a market for people with highly sought after skills and capability,” Ms D’Ambrosio said.

Acting Environment MP Lily D’Ambrosio said the government had to compete in the labour market. Picture: David Geraghty

“They are able to go from one project to another and we have to compete in that market.”

She said the Victorian Government’s ambitious set of projects were in direct competition with other state government projects and they needed to attract those with the right skills for senior big build roles.

“Victoria has the most ambitious build of massive infrastructure in the country,” she said.

“Of course because of that, and because other states across the country are also having significant big builds, this does put pressure on labour availability skills and skills shortages.”

Ms D’Ambrosio said there was “no bubble” in terms of the skills and supply chain shortages in Victoria, so the government, in competition with other states and territories, had to attract skilled people to get projects done.

Herald Sun previously revealed a secret report laid bare the super-sized pay of Victoria’s leading public sector road and rail executives, including one who earned more than $814,000 last year.

The leaked report includes a letter from Government Services Minister Danny Pearson to the state’s remuneration tribunal in 2021, asking it to provide advice on salaries for transport infrastructure chiefs due to competition with the private construction sector.

Government Services Minister Danny Pearson wrote to the state’s remuneration tribunal. Picture: Luis Ascui

“It is important that the state is able to compete with industry to secure high skilled senior project and technical resources, which, at times, may require matching high-quality candidates’ market salaries,” Mr Pearson’s letter says.

The tribunal’s advice – obtained exclusively by the Sunday Herald Sun – was provided to the government last year, but has never been released publicly.

It shows that at June 30 last year, 16 of 25 executives in roles assessed were already paid more than the maximum packages the tribunal recommends for those roles.

The highest earner was the chief executive of Rail Projects Victoria – which oversees mega projects such as the $14bn Metro Tunnel – who had a total remuneration worth $814,251.

That role was held by now-retired Evan Tattersall when the report was written by the pay-setting body, which recommends the RPV CEO be paid a maximum of $768,000 a year.

Former Rail Projects Victoria chief executive Evan Tattersall. Picture: Nicki Connolly

Current Rail Projects Victoria chief executive Nicole Stoddart. Picture: Alex Coppel

The current RPV chief is another experienced engineer, Nicole Stoddart, who at the time the report was written was executive general manager of rail and infrastructure delivery at the Suburban Rail Loop – the first stage of which will be built between Cheltenham and Box Hill for $35bn.

The document says that SRL role should command a package of up to $511,862 a year, but that last year the government was paying $680,000 a year.

The document shows that the chief executive of the $18bn North East Link, Duncan Elliott, was a bargain appointment at $493,991 a year – especially considering the documents say the project’s chief operating officer, which was last year Jim Waller, takes home $748,755.

A recent shake-up of transport infrastructure agencies in Victoria has occurred since the report was sent to government, with Mr Elliott now heading up Major Road Projects Victoria to oversee all major road builds, including the NE Link.

Last year the MRPV chief executive role; which was held by Allen Garner, who now heads up the Office of the 2026 Commonwealth Games; was being paid $713,307, according to the leaked report.

North East Link Project chief executive Duncan Elliott.

Former Major Road Projects Victoria chief executive Allen Garner. Picture: Alison Wynd

The shake-up of transport infrastructure bodies this year was part of an effort to rein in skyrocketing costs across the State Budget, and came as the government pledged to cull thousands of public sector jobs to get Victoria’s finances in better shape.

Major blowouts on mega projects, such as the $10.8bn West Gate Tunnel and the $14bn Metro Tunnel, have added to the state’s soaring debt.

The tribunal report shows it was concerned about “spillover effects” if it approved astronomical executive pay in one sector of the public service, and that it had considered even higher pay bands that were benchmarks in the private sector.

It says that once executives on current supercharged salaries came off contracts in Victoria, their remuneration should be reviewed because Covid-19 labour problems and east-coast market competition may have eased.

“Notwithstanding the factors likely to dampen labour market demand in relation to major transport infrastructure and increase its supply in the future, the tribunal considers there will remain sufficient continuing demand and supply pressures to warrant payment above the relevant SES remuneration band for some major transport infrastructure executive roles,” it says.

Shadow treasurer, Brad Rowswell, said while Victorians struggled to make ends meet amid worsening cost of living pressures, inflated executive salaries failed to align with community expectation.

“Victorians are being punished for the financial mismanagement of the Andrews Labor Government and their addiction to waste; now totalling more than $30 billion in major project cost blowouts,” he said.

“And at the same time, those fat cats executives charged with executing these projects are getting paid more than ever.

“Victorians want bang for their taxpayer buck, not fat cats executives being paid massive salaries while major project costs continue to blow out.”

A spokesman for the Andrews Government defended the massive executive wages bill but refused to say what the roles identified currently paid.

“Victoria has the most ambitious infrastructure agenda in the country with Metro Tunnel, West Gate Tunnel, North East Link and Suburban Rail Loop and we need the best people to deliver it,” he said.

“Given major projects are being undertaken at the same time across the country, and we’re dealing with skills shortages, competition with the private sector and supply and demand issues, we must attract the best talent and remuneration for these roles.

“The report demonstrates the need to pay specialist and senior transport roles above the current public service bands.”