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Time to rethink 'astronomical' public salaries

Who's the highest paid public sector CEO?

According to State Services Commissioner Iain Rennie's annual report into the remuneration of state sector bosses, the honour goes to Ministry of Foreign Affairs and Trade chief, John Allen, with a package of between $620,000 to $629,999.

Other top salaries were also revealed, among them Housing New Zealand chief executive Lesley McTurk's ($480,000 to $489,999) and the Ministry for Culture and Heritage's Lewis Holden's ($330,000 to $339,999).

PSA national secretary Richard Wagstaff said public sector chief executives generally earn less than their counterparts in the private sector, but “it’s still disheartening for public servants to see how much their chief executives are earning and the increases they are getting at a time when the government is pushing its austerity budget, putting the squeeze on the pay and conditions of average workers and asking them to do more with less".

He disputed the State Services Commission's claim that the average base salary for staff in the public service increased by 3 percent.

“We know through negotiating with government employers that workers across the public service are generally getting pay settlements of between 0-2 percent. There are also significant entitlements and benefits which chief executives receive on top of their base salaries which the wider public service does not. Those extra payments certainly tip the balance even further.”

He added: “Pay increases are generally seen as performance-based and it’s fair to say that in the case of some chief executives, there are some pretty big questions around that which deserve an answer."

It's led to calls for a review of the salaries paid to public sector chief executives.

According to Green Party MP Dr Kennedy Graham: "The rationale for such astronomical salaries is invalid."

He said a lower salary would be a "healthy litmus test" of commitment to the public good.

“I have heard it said of the MFAT chief that, based on performance, he should be receiving nothing – his ministry is in structural disarray, his staff leaving in droves, and there is deep discontent over the ministry’s change proposals,” said Graham.

“New Zealand society is out of kilter when we have a $620,000 public sector salary while our youth are offered $10.80 an hour."