Bureaucrats Paid Like CEOs While Politicians Watch in Fury

Australian department heads are pulling over $1 million annually (far more than the prime minister's $622,000), and the independent tribunal that sets their pay is finally facing a reckoning. After a decade of Senate grilling and crossbench fury, the Remuneration Tribunal just announced it's reviewing these eye watering salaries, with downward adjustments explicitly on the table.

The numbers are grotesque by any public sector standard. Some Australian Public Service (APS) department secretaries now earn more than $1 million a year. That's over nine times the average weekly earnings, and for the heads of Treasury and the Department of Prime Minister and Cabinet, it's over ten times. The prime minister himself only pulls $622,000. The Remuneration Tribunal, the independent body responsible for this mess, just released a consultation paper admitting it might need to dial things back. The rot started between 2011 and 2014, when the tribunal commissioned a report from consultants Egan Associates that explicitly used private sector CEO salaries as benchmarks. The tribunal calls that report a "touchstone" (a fancy word for "we copied their homework"). They've since tried to distance themselves from private sector comparisons, claiming in their recent Senate testimony that they "do not use private sector positions as comparators." That's revisionist history at its finest. The 2011 Egan report is sitting right there in their own archives, and it's dripping with CEO salary data. Senator Jacqui Lambie introduced a bill in 2025 to cap secretary pay at the prime minister's salary, which the Senate committee rejected as too blunt. But the committee hearings exposed bipartisan unease. Coalition senators Dave Sharma and Jessica Collins essentially told the tribunal to read the room, questioning whether million dollar salaries are even necessary to attract talent and demanding more transparency about how public sentiment factors into their decisions. Lambie went further, calling for a performance audit of the tribunal itself by the Australian National Audit Office (ANAO). The tribunal's defense centers on comparing secretaries to heads of economic regulators like the Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC). But here's the kicker: the tribunal sets those salaries too. It's circular reasoning dressed up as benchmarking. They're also pointing to wild variations in Senior Executive Service (SES) pay (the deputy secretaries and direct reports who sometimes earn nearly as much as their bosses). But those variations exist because central pay controls were devolved in the 1990s and 2000s, creating a fragmented mess the tribunal then used to justify boosting the top. What's missing from this entire discussion is tenure. Australian department secretaries can be terminated at any time for any reason. They're effectively employed at pleasure. When that system was introduced under the Keating government in 1994, pay increased significantly to compensate for lost job security. But now we've got both insecure employment AND CEO level salaries. Research on public sector motivation (the idea that people join government to serve the common good rather than chase dollars) suggests Australia has over indexed on financial incentives compared to other democracies. The question isn't whether these roles are important. It's whether we're paying for talent or just inflating egos.

My Take

The Remuneration Tribunal is in full damage control mode, and they should be. They spent years quietly jacking up bureaucrat pay using private sector CEO salaries as cover, and now that politicians across the spectrum are calling them out, they're suddenly discovering the virtues of "public sentiment" and "non financial rewards." The consultation paper's language about potential downward adjustments is the bureaucratic equivalent of a hostage video. They know the political winds have shifted and they're scrambling to avoid getting their powers stripped. Here's what really galls: the tribunal is still trying to have it both ways. They want to claim they don't use private sector comparisons anymore, but they're defending salaries that were explicitly set using those comparisons a decade ago and have only gone up since. And their fallback (comparing secretaries to RBA and ASIC heads) is laughable when they set those salaries too. This is a closed loop of self justification. The real scandal isn't just the dollar amounts. It's that an unelected tribunal has been operating like a private sector compensation committee while ordinary Australians watch their real wages stagnate. Public Service Minister Katy Gallagher is probably grinding her teeth over this. She earns less than the people she nominally oversees, and that's a political powder keg waiting for a spark.

What Happens Next

The Remuneration Tribunal's consultation period runs through mid 2026, with final decisions expected before the 2027 annual adjustments kick in. Watch for a strategic retreat. They'll probably freeze or modestly cut the top tier salaries while claiming they're being "responsive to community concerns," but they won't roll back the fundamental 2011 to 2014 increases that created this mess. The real battle will be over SES pay compression. If they can argue that deputy secretaries are earning too close to secretaries, they'll use that to justify keeping secretary pay high rather than fixing the underlying SES chaos. Lambie won't let this die quietly. She's already called for an ANAO audit, and if the tribunal's adjustments look like window dressing, expect her to reintroduce legislation with sharper teeth (possibly tying secretary pay to a multiple of median public service wages rather than prime ministerial salary, which would be much harder to wiggle around). The wildcard is whether Labor's caucus starts making noise. Gallagher is in an impossible position. She can't publicly undermine the tribunal without looking like she's interfering with an independent body, but backbenchers facing cost of living concerns in their electorates might not be so restrained. If even a handful start echoing Lambie's talking points, the tribunal's independence argument evaporates and this becomes a full blown political crisis.

What History Tells Us

The 1994 reforms under the Keating government that introduced contract based employment for department secretaries were supposed to create a performance oriented public service modeled on New Zealand's radical restructuring in the late 1980s. New Zealand had abolished tenure and moved to fixed term contracts with significant pay increases as compensation. But New Zealand also built in performance measures and accountability mechanisms that Australia never fully replicated. What we got was the pay bump without the discipline. This mirrors a broader pattern across Westminster democracies in the 1990s and 2000s: the "New Public Management" movement that tried to import private sector practices into government. Britain under Tony Blair, Canada under Jean Chrétien, and Australia under both Keating and later Howard all experimented with these models. Most have since walked them back after discovering that private sector incentives don't translate cleanly to public service, where success is harder to measure and motivations are fundamentally different. Australia is late to that reckoning, still clinging to a hybrid model that delivers neither true public service ethos nor genuine private sector accountability.