Government executives share in $12.8m of bonuses during public servant pay freeze

Government agencies have defied calls for restraint with taxpayer dollars during the coronavirus pandemic, shelling out millions in bonuses to top executives while ordinary public servants had their pay frozen.

An analysis of 142 principal government entities – including departments, statutory authorities and government businesses – that published annual reports for 2019-20 shows a quarter of them paid bonuses to their top executive teams, for a total of more than $12.8 million.

Government agencies have shelled out millions in bonuses to top executives while ordinary public servants had their pay frozen.Credit: Jessica Shaprio

Most of the taxpayer-backed organisations that paid six-figure bonuses to executives did not say whether they considered the effect of the coronavirus recession or a government request to exercise restraint when awarding them.

Australia Post chief executive Christine Holgate resigned this week after Prime Minister Scott Morrison criticised her decision to spend nearly $20,000 on luxury Cartier watches for three senior staff members in 2018. The postal service's executives this year took a 20 per cent pay cut and waived their right to bonuses.

Mr Morrison said last week it was important there were standards applied to all government business enterprises and agencies managing taxpayers' money. Labor says it's hypocritical for agencies to splash out on bonuses for highly paid executives while public servants have their wages frozen.

The analysis of annual reports shows there were 27 executives of government entities who received more than $100,000 on top of their fixed pay. They worked at NBN Co, Snowy Hydro, Future Fund, the Commonwealth Superannuation Corporation, Western Sydney Airport developer WSA Co, CSIRO, submarine builders ASC, and the Australian Nuclear Science and Technology Organisation.

But only three of those organisations - NBN Co, WSA Co and Future Fund - say in their annual reports they considered the impact of the pandemic when deciding executive pay and bonuses.

In April, Assistant Minister Ben Morton, who has responsibility for the public service, froze the pay of regular bureaucrats for six months. The Australian Public Service Commissioner wrote to other government organisations asking them to follow suit.

"How can the government freeze APS wages while allowing all these other government operations to pay bonuses to their executives? [It's] hypocrisy," Labor's shadow assistant treasurer Stephen Jones said.

Shadow Assistant Treasurer Stephen Jones says it's hypocritical for government agencies to pay big bonuses during the pandemic.Credit: Alex Ellinghausen

Australian Chamber of Commerce and Industry head James Pearson called for widespread restraint in public sector pay when the pandemic was in its early stages and he still believes it's needed.

"Public servants are part of the wider community and their outcomes should reflect that we're all in this together," he said on Thursday.

"At a time when many Australians are out of a job and many people in business are hanging on hoping for restrictions to ease and customers to come back, pay rises for public sector executives don't pass the pub test."

A spokesman for Prime Minister Scott Morrison declined to comment. Mr Morton did not respond to inquiries.

Not all agencies have heeded the request, with staff at the ABC, SBS and the Australian Securities and Investments Commission among those voting against pay freezes.

NBN Co boss Stephen Rue was the top paid government executive, taking home more than $3 million, including a $1.17 million bonus. In total, the seven NBN Co senior executives received $2.9 million in bonuses.

But its annual report also shows its board decided the pay of staff and executives will be frozen in 2020-21 in light of the pandemic.

The next biggest pool of rewards went to executives at Snowy Hydro, which paid nearly $2.8 million in bonuses. Chief executive Paul Broad received more than $1.1 million in base salary and a $934,485 bonus.

The power company's annual report made no mention of factoring COVID-19 into its remuneration decisions. It benchmarks pay levels against private companies and took extra advice from PricewaterhouseCoopers in 2019-20.

Snowy Hydro executives only receive bonuses if financial targets are met and no employees or contractors die in the relevant year.

Similarly, the Commonwealth Superannuation Corporation, ASC, ANSTO and CSIRO make no mention of the pandemic in relation to pay considerations.

At WSA Co, six executives received bonuses. CEO Graham Millett pocketed just shy of a million dollars including a $228,992 bonus.

In response to the pandemic, its board members took a 20 per cent pay cut for April, May and June. It will also freeze senior executive pay over the next financial year and cut the size of potential bonuses by 20 per cent.

The Future Fund's chief executive and chief financial officers didn't take bonuses in 2019-20 but its five other senior executives did, ranging from $171,308 to $628,940. However, it noted these were lower than in previous years because bonuses are calculated based on how well the fund's investments perform and the pandemic sent markets tumbling in the first part of 2020.

Other entities that addressed the pandemic included ASIC, which said executives didn't receive bonuses in 2019-20 because of the crisis, and the Clean Energy Finance Corporation where the CEO and CFO deferred their bonuses, although five others received amounts between $61,062 and $78,838.

The average bonus paid across all entities that used them was $96,391 - one-fifth of the base pay - and the median was $45,777.

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