IRD, Education chiefs get top state sector pay hikes

Inland Revenue Commissioner Robert Russell. Photo / Mark Mitchell

Public sector chief executives' pay was held steady in the last year in what State Services Commissioner Ian Rennie says is a good example to their employees in financially tight times.

However he warned executives in the tertiary education sector, where the number of employees earning more than $100,000 continued to rise sharply, that their pay hikes must stop.

Mr Rennie said the Government had capped his budget for chief executive's pay for the June 2010 year, but the total salary bill in the core public sector where he sets remuneration levels had fallen by $434,000.

"I think it's important to maintain trust in the public service particularly at tough times like these. I think people are looking for their leaders to be modelling the behaviour that they are asking from others."

Of the 24 chief executives whose performance over the year had been reviewed, 13 had seen no change to their pay, five saw their pay go down and six were paid more.

The highest increases were Ministry of Education chief executive Karen Sewell (up from $480,000-$489,999 to $500,000-$509,999) and IRD boss Robert Russell (up from $440,000-$449,999 to $460,000-$469,999).

Other increases went to the heads of the Ministry of Agriculture, Ministry of Justice, Department of Conservation and Department of Corrections.

The Ministry of Transport's CEO also received a rise (up from $350,000-$359,999 to $360,000-$369,999).

Mr Rennie said that among the handful of chief executives whose pay had increased, that was generally because they had done well against the performance expectations set by him.

Mr Russell enjoyed a $20,000 pay increase, one of the largest. Mr Rennie said that was in recognition of Mr Russell's work in successfully recovering more than $1 billion in tax from the banks last year.

With three chief executive roles being disestablished Mr Rennie said the budget for the current year would be reduced.

The number of public servants paid more than $100,000 rose by 4 per cent compared to an increase of 26 per cent the year before and now about 10 per cent of public servants were paid more than that.

However among public servants who work in the tertiary education sector including managers and some academic staff, whose pay is not set by Mr Rennie, there was a 21 per cent increase in the number earning above $100,000 after an increase of 28 per cent the year before.

"I think that sector needs to reflect about whether those decisions are consistent with the degree of financial constraint that's applying across the wider state sector."

State Services Minister Tony Ryall said the Government had made it very clear to Mr Rennie and his department the Government expected restraint.

"We're asking a lot of public servants to tighten their belts and its quite appropriate that we expect that to flow across those people at the top level too... we're not going to have a lolly scramble at the top end of the public service.

"The State Services Commissioner has done a good job for New Zealand in that the overall bill is down on what it was last year."

- with NZPA