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Civil servant bosses income falls to 2008 levels in 2014

Thursday 11th December 2014

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Senior New Zealand public servants' and chief executives' total collective pay is at the lowest level in six years and is expected to stay low based on the weak inflation outlook, the State Services Commission said in its annual remuneration report. 

Public service chief executives earned a total of $11.58 million in the year ended June 30, the lowest level since the June 2008 year and $500,000 less than last year, the civil service overseer said in its report, reflecting reduced numbers of chief executives, cost control and a long standing vacancy.  The average increase for a chief executive was 2.8 percent in the year, with the outlook for future rises to be between 2.6 percent and 3 percent, as a result of recent collective bargaining. 

"Chief executive remuneration requires a careful balance between ensuring we can attract and retain highly qualified and skilled leaders for New Zealand's public institutions while being prudent and restrained when spending public money," said Iain Rennie, State Services Commissioner, who was one of the highest paid public sector CEO's, at between $610,000 and $619,999.

“What we pay our public service leaders is generally less than what they would receive in a similar job in the private sector in New Zealand.  To put what they earn in perspective: the average base salary of our public service chief executives is approximately five times the average pay of the employees in their department."

The report shows the disgraced former chief executive of the Canterbury Earthquake Recovery Authority, Roger Sutton, earned between $590,000 and $599,999 in the year ended June. Last month Sutton quit the role amid reports of sexual harassment. At the time, Rennie said an investigation found that Sutton's conduct "did not always meet the standard expected of public service leaders" but he was unlikely to have dismissed him. Yesterday he apologised to public servants for holding a joint press conference with Sutton to announce the resignation, saying it denied the complainant the same opportunity. 

The highest paid chief executive in the public service is Adrian Orr, chief executive of the Guardians of the New Zealand Superannuation Fund, which invests taxpayer funds to provide pensions.  He is followed by The University of Auckland's vice-chancellor Stuart McCutcheon, who earned between $660,000 and $699,999, followed by the Treasury's head Gabriel Makhlouf, with an annual salary range of $650,000 to $659,999.

Outgoing Ministry of Foreign Affairs and Trade boss John Allen earned between $640,000 and $649,999. Allen has since announced his resignation to head up the New Zealand Racing Board, the statutory, industry funded body, which according to its annual report paid one employee between $960,000 and $970,000 in the June 2014 year. 

The New Zealand Transport Association's Geoff Dangerfield and Ministry of Business, Innovation and Employment's David Smol were both paid between $620,000 and $629,999. 

The report also covers all civil servants paid more than $100,000. The number of tax-payer funded staff earning more than $100,000, excluding chief executives, increased 11 percent, but numbers dropped in several of the most highly paid brackets.


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