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Cabinet Secretary Arthur Sinodinos has said the Liberals are philosophically committed to performance pay for public servants Photo: Alex Ellinghausen Former Treasury secretary Ken Henry was denied a bonus in 2007 when his speech criticising water policy was leaked. Photo: Sasha Woolley
Nanjing Night Net

Australia’s top public servants have refused for almost three years a directive to pay themselves bonuses.

As Malcolm Turnbull prepares to form government, a Fairfax survey shows the bureaucracy brushed aside a Coalition promise made during the previous election campaign: to pay officials bonuses based on how much “red tape” they cut.

The pledge remains Coalition policy, though Liberal ministers would not discuss it this week.

But the Australian Public Service’s 20 largest workplaces effectively ignored it: each confirmed they don’t give executives the extra payments.

One official who works on remuneration said the policy was “bizarre … and impossible to implement. It was never going to happen,” adding it would be easy to game the scheme.

Before the 2013 election, the Coalition said it would “link remuneration of senior executive service public servants, including future pay increases and bonuses, to quantified and proven reductions in red and green tape”.

It met resistance almost immediately. In his first brief to the Abbott government, then public service commissioner Stephen Sedgwick warned of “practical challenges in implementing” the plan.

Yet ministers went on to write to all agency heads, telling them to set up the bonus system.

Bonus pay has become a partisan issue in the past decade.

Senior Liberals, including Arthur Sinodinos and Eric Abetz, have argued in favour of financial incentives for government staff, saying they help get the best out of them.

Seven in 10 senior federal bureaucrats received bonuses under the Howard government. The average payments in 2007 was $9900 for the lowest level (SES band 1) and $19,600 for SES band 3 staff.

However, Kevin Rudd abolished performance pay for department heads after he won office in 2007, saying it persuaded bureaucrats to say what ministers wanted to hear rather than what needed to be said.

Labor also began to wind back bonuses for SES staff. By the end of 2014, only one in eight senior officers were still receiving them.

Campbell Newman’s conservative government in Queensland also introduced bonuses for agency heads, but Labor Premier Annastacia Palaszczuk axed them almost immediately after taking office.

She said she valued public servants’ expertise “but I also think our most senior public servants are paid well enough that they don’t need generous bonuses on top of their salary”.

Labor’s federal employment spokesman, Brendan O’Connor, said this week the bonuses that never happened were “just another Liberal Party policy which seeks to deliver more to the haves at the expense of the have-nots”.

“The biggest issue confronting the public service isn’t bonuses to senior executives,” he said.

“It’s the massive number of workers who have had their pay frozen for three years and working conditions attacked because of the Liberal Party’s unfair bargaining framework.”

Asked why the bureaucracy had refused to implement bonus pay, the Public Service Commission said agencies had “considerable flexibility to manage their senior executive remuneration arrangements, within the boundaries of government policy”.

“For a number of senior executives, the success of deregulation initiatives would be a factor in their performance management and assessment arrangements,” a spokeswoman said.

All of the agencies surveyed said they had implemented the “cutting red tape” agenda, and many said they assessed senior staff’s commitment to deregulation in their annual performance appraisals. But each refused to pay bonuses.

Former department head Allan Hawke, who served under the Howard government, was a fierce critic of its performance bonuses, saying they were “at odds with public service culture, ignore the complexity of how the public service actually works [and are] bad for morale and teamwork”.

He said this week: “Bonuses are not the issue. What’s important is to have performance agreements that help to deliver the results required and development of each person towards realising their potential.”

One incident that encouraged Labor to ditch bonuses was the treatment of then Treasury secretary Ken Henry, who was denied a bonus in 2007. It was widely reported to be a punishment for criticising the Howard government’s water policy in a speech to staff, which was later leaked to the media.

This story Administrator ready to work first appeared on Nanjing Night Net.


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