Hefty pay deals for public sector bosses raise hackles

John Allen. Photo / Mark Mitchell

Chief executives across the state and public service sectors have received hefty pay increases with some pay packets more than doubling.

The top pay packets were revealed yesterday, with the head of the Ministry of Foreign Affairs and Trade John Allen getting a a $40,000 pay rise despite drastic cutbacks at the ministry.

Mr Allen received $620,000-$630,000 this year, up from $580,000-$590,000 last year.

There has been a major shake-up at the ministry, where 79 jobs have been lost, the entitlements of some diplomats have been cut and embassies closed in a bid to save $24 million.

Labour's foreign affairs spokesman Phil Goff said Mr Allen's pay rise was a blatant double standard.

"If the Government is so broke that it has to sack hundreds of staff and cut their incomes, then surely it should be leading by example and restraining salary increases at the top end."

Minister of Foreign Affairs and Trade Murray McCully would not comment, saying: "... today is absolutely the first I have heard of it".

State Services Commissioner Iain Rennie said average rates of increase across chief executives was 2.7 per cent, while the rest of the public service was 3 per cent.

Public Services Association national secretary Richard Wagstaff rejected the 3 per cent figure and called for limits on increases for chief executives.

"I can tell you collective bargaining settlements for the rest of the public sector were 1.5 per cent, it's a pretty typical settlement at the moment."

Inflation sits at around 1 per cent.

Mr Wagstaff said staff at District Health Boards received a 2.5 per cent increase over two years, while the new chief executive of Capital and Coast DHB was paid $430,000- $439,999, 79 per cent more than the previous chief executive.

He said public sector chief executives generally earned less than their counterparts in the private sector when the size of their organisations and their responsibilities were taken into account. He said it was still disheartening for public servants to see how much their chief executives were earning.

Mr Rennie said entitlements paid to chief executives on the last day of duty may include retiring leave, annual leave not taken, employer superannuation payments owing on end of term entitlements and salary in lieu of a notice period.

"Our policy is that chief executive remuneration should be flexible, transparent, with modest increases that are performance-related, and take account of business issues such as recruitment, retention, and affordability. We want to attract, retain, and motivate suitable, highly competent chief executives."

Top earners

$730k to $740k

Adrian Orr, Guardians of NZ Superannuation

$630k to $640k

Stuart McCutcheon, University of Auckland Vice-Chancellor

$620k to $630k

John Allen, Ministry of Foreign Affairs and Trade

$600k to $640k

Geoff Dangerfield, New Zealand Transport Agency

$580k to $590k

Sir Maarten Wevers, Dept of PM & Cabinet (until Jun), David Smol, Ministry of Economic Development

$540k to $550k

Gabriel Makhlouf, Treasury