Officials' pay secrecy encourages contempt Frozen dough ... ACT Deputy Chief Minister Andrew Barr (left) and Chief Minister Katy Gallagher (right). MLAs asked the territory's Remuneration Tribunal not to increase their salaries over the coming year. Photo: Jay Cronan In 1667, the great English public servant, Samuel Pepys, wrote in his diary that "it is pretty to see what money will do." He's right but it's not always so. For example, when the remuneration of public officials intersects with public sentiment, prejudice and an ingrained unwillingness of some citizens to pay enough for the things they want from governments can make an ugly brew. The policy's pretence that pay rises are being offset by productivity improvements above those required by efficiency dividends is laughable. Ignorance plays its part, especially ignorance about the reasons why politicians and their servants are paid as they are. The Public Service Commission's report last month on remuneration in the Australian Public Service tries to dispel some of this ignorance, while the ACT Remuneration Tribunal makes no serious attempt to explain the reasons for its decisions. The commission's report contains a host of information on: base salaries; salaries plus benefits; and salaries, benefits and bonuses (yes, bonuses still exist apparently: about 21,000 staff got one in 2012). The data is divided up by agency (anonymously though), classification and sex, and provides information on superannuation and the provision of cars. It's reported that 711 staff, including 150 or so below senior executive service levels, have aspects of their remuneration governed by common law agreements. This is a novel and unusual arrangement especially given constitutional provisions on the employment of public servants and Parliament's pretensions to have legislated an exclusive code for it. It's to be hoped that the commission has rock solid legal advice on this point; it's not prepared to say if it has and, if it has, it's not prepared to release it. Anyway, the commission's report is impressive and helpful, though in many respects it's unsatisfying. Mind you, you can feel sorry for the commission. The Howard, Rudd and Gillard governments turned remuneration policy and practice in the APS into such a shambles that reporting on it would make Hercules wobble at his knees. Still, the commission doesn't make things easy for itself. It says that, in 2012, median base salaries across non-SES classifications increased overall by 5.9 per cent. How could this be when the government has imposed a 3 per cent ceiling on increases in base rates in certified agreements, and the corresponding figure in 2011 was 2.4 per cent? Well, the commission has changed its methodology so that increases in base rates of pay take into account the extent to which individuals have climbed up incremental salary scales. Thus, it is not possible to line up the commission's reporting with the government's policy limit. Moreover, the commission says it has not calculated the average increase in base rates of pay specified in agency certified agreements. It's important for the public to be satisfied that agencies are abiding by the government's policy limit - the commission's report does not do that. There's an escape clause in the current policy allowing agencies to agree to pay increases above 3 per cent a year. Some have done so but the commission will not identify them, even though the great bulk of this information is on the public record but obscurely tucked away, and can be discovered by scouring through the 100 or so separate agency certified agreements. The commission's unwillingness to bring this information together and provide it in an accessible form is not good enough. The public needs to be reassured that government policy is being met; at the moment, the means for it doing so are being made as difficult as possible. Government policy also requires that "improvements in remuneration [in the APS] are offset by genuine, quantifiable productivity improvements." The commission says it "does not monitor agency initiatives in this regard." That is to say, the body responsible for administering the policy is unable to tell the government or the public that it is being implemented as intended. Of course, the policy is absurd so, in a sense, it's little wonder that its effects are not being reported on or apparently measured in a concerted way. But in another sense this is a serious matter because the public is being duped. The policy's pretense that increases in pay are being offset by productivity improvements above those required by high efficiency dividends is laughable. The core of APS remuneration policy is a fraud that mocks high-sounding public service values or honesty and integrity. A proper pay policy would aim to place remuneration in the public service in a reasonably competitive position with rates paid by other employers in the wider labour market. But for expensive and perverse ideological reasons the government won't do that, because such a policy's logic would destroy the rationale for agency-based bargaining and would require remuneration in the service to be centrally determined. There would be no point in the 100 or so individual agencies all trying to match the outside labour market. So to a final point on which we are being kept in the dark on remuneration in the APS: that is, where its rates stand in relation to those for comparable work in the rest of the community. Some previous remuneration reports have compared public service rates with those of other employers. The most recent one does not. It should. Other employers, employees and taxpayers deserve the assurance that rates of remuneration in public sector organisations are in a reasonable position in relation to the market - neither leading nor lagging. The commission's report provides no satisfaction on this point. Let's turn to the ACT Remuneration Tribunal. In the past few months, it has made decisions on members of the Legislative Assembly and senior officials in the local administration. Its economical "accompanying statements" on these decisions look like pro forma documents drawn up from a word processor. It's as if the tribunal is just going through the motions. For example: Its "accompanying statements" list factors it is "most interested in" and then says "having balanced these considerations, the tribunal decided to ..." This trite formula is repeated endlessly. It provides no rationale or justification for its decisions. Its decision on directors-general and other senior staff says it was "most interested in national economic indicators ... and the government submission." "National economic indicators" are not relevant to fixing these salaries and conditions; they are significant only as background. Then, to rub it in, the tribunal has apparently ignored the most pertinent evidence: the excessive increases in the pay of secretaries and other senior officials in the Commonwealth granted by its Remuneration Tribunal in 2012, and the levels of remuneration of comparable officials in state government administrations. On members of the Assembly, after listing factors it "was most interested in" and "having balanced these considerations," the tribunal said it had decided "not to make any changes to salary, allowances and other entitlements for members pending an independent review to be held in 2013." This Delphic pronouncement was clarified in The Canberra Times last month, where the tribunal's chairwoman, Anne Cahill Lambert, was reported as saying the "freeze" on Assembly salaries "was a short-term measure to allow an independent consultant to do a root-and-branch review of MLAs' salaries, allowances and entitlements." But hang on. The tribunal is paid to conduct independent reviews of such matters and it should not be outsourcing its functions to consultants. Indeed, it is of concern that a quasi-judicial body would think of doing so. Last year, the federal Remuneration Tribunal brought consultants in. They undertook, of all things, a "work value" review of federal members of Parliament. Their report showed little sensitivity or understanding about public sector remuneration, made false assumptions about the work of MPs, lined up inappropriate benchmark comparisons and then pulled a figure out of the hat. It was very funny and farcical. The ACT tribunal should steer clear of bad practice, not try to emulate it. It should do the work it is paid to do; it can't be all that hard. It should examine the remuneration and circumstances of other members of Parliament in the country (it should have this on tap), conduct open, public hearings to allow locals to express their views if they wish, decide what members of the Assembly should be paid and produce a fully reasoned statement justifying their decision. Not a cent should be wasted on external consultants; indeed, they should be kept at the greatest possible distance. If the tribunal wants to splurge on private sector consultants, the ACT Chief Minister should write to it, suggesting in the nicest possible way that it think again. There will always be a good dose of jaundice in community views about politicians and public servants' pay. There's probably not a government in history that has escaped these hard-hearted feelings. They can be mitigated, however, if responsible government authorities take the trouble to explain their decisions and the overall results of their work. The Public Service Commission is having a go, but it could do a lot better. The ACT Remuneration Tribunal has not yet reached first base. Paddy Gourley is a former senior public servant.