Large pay rises for top public servants

Photo / Kenny Rodger

Most top public servants received substantial pay rises ahead of the world recession bringing down a veil of austerity, State Services Commissioner Iain Rennie said today.

There was also a large rise in the number of civil servants earning more than $100,000 with 4771 on that figure by the end of June, compared with 3782 the previous year. There was an almost 600 per cent increase in the number of senior civil servants earning more than $300,000.

The State Services Commission's annual report for the year ended June records a salary increase of 5 per cent in the overall budget for all government department chief executives for the year.

It shows the number of civil servants earning more than $100,000 also swelled by more than 20 per cent, which means more than 10 per cent of the 45,000-strong public service are earning more than that.

Of the 4771, more than 3000 were earning less than $150,000, but there was large increases at the top end.

Last year the highest earning non-chief executive civil servant received between $360,000 and $369,999, but this year's report showed the highest was on $490,000-$499,999.

Last year five civil servants earned more than $300,000, but this year 34 earned more than that - an almost six-fold increase.

Mr Rennie said the latest data - after the recession and since the end of the financial year - showed there had been widespread pay restraint lately.

A number of civil servants bosses also received substantial hikes, while most of those filling chief executive vacancies took pay cuts in comparisons to their predecessors.

Treasury Secretary John Whitehead received a large pay increase moving from $510,000-$519,999 to $550,000-$559,999, while Ministry of Health head Stephen McKernan moved to that band, from $500,000-$509,999.

Also in the $550,000-$559,999 band was the Ministry of Social Development chief executive Peter Hughes, who moved up $530,000 to $539,999.

The first non-diplomat to run the Ministry of Foreign Affairs, John Allen, received between $540,000 to $549,999. Last year's annual report said his predecessor Simon Murdoch had been on between $510,000 to $519,999, though the since-retired Mr Murdoch received a final payout of more than $600,000.

Most chief executives received a pay rise though three of them filling vacant positions did start on lower salaries than those they replaced.

The Ministry for the Environment package dropped from $330,000-$339,999 to $280,000 to $290,999, the Ministry of Economic Development dropped even further from $510,000-$519,999 to $420,000-$429,999, while the Ministry of Transport fell from $370,000-$379,999 to $330,000-$339,999.

Mr Rennie said the pay rises flowed through from a decision in 2005 to increase the overall funding for chief executives by 5 per cent a year for five years.

After the global credit crisis sparked a world wide recession the order had gone out to rein in spending.

Mr Rennie said this year's budget had seen him hand back more than $600,000 he had been previously allocated to lift chief executives' salaries in the current financial year.

There had been no resistance to this from top civil servants and many had asked for no pay rises as they were trying to manage their wage budgets.

Mr Rennie said there could be some pay rises for chief executives in the current year, but it would be within the $12.5 million cap.

Increases and decreases in pay would be more closely tied to performance, he said.

Many chief executives and senior appointments who had their salaries set by the Remuneration Authority also received increases with the Solicitor-General moving from $460,000-$469,999 up to $510,000-$519,999 and the Police Commissioner from $440,000-$449,999 to $490,000-$499,999.

- NZPA