Big salaries skew perspective

THE sacking of a provincial health chief in Canada might seem far removed from Western Australia’s public service, but the news that gained global attention shows bureaucrat salaries are a big issue around the world.

Stephen Duckett was dismissed as head of the Alberta’s health service after an odd confrontation with the media in which he chose to eat a biscuit rather than answer questions.

Dr Duckett was headhunted from Australia to the role in 2009 and is widely regarded as the architect of Victoria’s case management system, which is being adopted by many states and is a central plank in the federal government’s attempt to take over the sector.

His salary, reportedly $C575,000 with a bonus of up to 25 per cent for performance, was a big part of his undoing.

Alberta is often cited as a very innovative place when it comes to government reform, but clearly even the politicians there have their limits.

While the ‘Cookie Monster’ headlines might have made his exit more colourful than most, it is just another example of a government faced with the difficult reform process being undone by the pay packet of the bureaucrat they have specifically brought in to do the hard job.

In WA, a good example is Neale Fong, who became the centre of controversy due to his installation as the head of health reforms. In attracting Dr Fong from the private sector, the then Labor state government agreed to pay the country’s highest bureaucratic salary. It appears that decision backfired for all.

State agency and department executives’ high salaries have stayed in the news since the Liberals took over. Last year, the salary of government employee superannuation fund CEO Michele Dolin became a controversial issue.

Ms Dolin remains the state’s fifth highest paid public servant.

Part of that controversy last year was the revelation that, in providing many government-trading enterprises with board independence and autonomy, the state government had lost the ability to control executive remuneration.

The CEOs of government trading enterprises dominated the bureaucratic salary rankings, holding the top six spots this year.

The top three were energy utilities, all relatively new positions that have been created since the break-up of the previous state power monopoly.

In another signal that the boards of these organisations are acting more like those from the private sector, all three of these energy utility bosses received bonuses in the year ending June 30 2010, the highest being Verve Energy chief Shirley In’t Veld, whose $550,000 reported remuneration included a $127,000 bonus.

That executive pay will be topped up this year by fees paid by national logistics and transport group Asciano. Ms In’t Veld was recently appointed to that board, where the minimum annual fee for membership was $150,000 last financial year.

Premier Colin Barnett raised the issue of agency executive salaries last week, reportedly telling state parliament he wants to see this area governed by the Salaries and Allowances Tribunal.

The tribunal governs most salaries in the government, including the premier’s own $312,101 annual pay packet and that of a minister, being $242,147 per annum.

Mr Barnett may be taking his lead from last year’s Economic Audit Committee recommendations.

The committee said a transparent and independent process would make it easier for ministers to satisfy their public accountability for these decisions while ensuring salaries remained competitive with those in the private sector.

After all, the EAC said, the state is ultimately footing the bill.

“It is therefore not unreasonable to expect a level of transparency in remuneration matters that is commensurate with that applying to other public officers who are independent from government (for example, the judiciary),’’ the report said.

“As recent examples have highlighted, ministers are held accountable for the remuneration of GTE executives but have little if any influence over these decisions.’’