Some senior bureaucrats earn more than $1 million a year. How did we get here?
- Written by Andrew Podger, Honorary Professor of Public Policy, Australian National University
The public service isn’t often considered highly newsworthy, but when it comes to how much senior heads get paid, it ignites public discussion.
Depending on the department, some heads now earn more than A$1 million a year. That’s far more than the prime minister, who earns around $622,000 annually.
The independent body that oversees the pay of top officials, the Remuneration Tribunal, recently announced it will review remuneration arrangements for Australian Public Service (APS) departmental secretaries and full-time public officers. This will happen ahead of annual adjustment decisions in 2027.
The tribunal has released a consultation paper on secretaries’ remuneration and foreshadowed one later in the financial year on public offices.
Interestingly, the consultation paper refers explicitly to the possibility of downward as well as upward ones.
So how did we get to this point? And what needs to be considered when deciding how much to pay the most senior bureaucrats?
Building political momentum
The announcement follows a series of Senate committee inquiries over the last decade into legislation proposed by crossbench senators.
Most recently, Senator Jacqui Lambie introduced a bill in 2025 proposing a cap on department sectretaries’ pay based on the remuneration of the prime minister and the treasurer.
The committee recommended against passage of the bill. But this inquiry was more extensive than those previous. It was clear other senators shared Lambie’s concerns, if not her overly blunt proposal.
In additional comments appended to the report, Coalition senators Dave Sharma and Jessica Collins called on the Remuneration Tribunal “to ensure its decisions enjoy a degree of public support and are responsive to public sentiment”. They said “it is arguable whether such high salaries need to be paid to attract the requisite talent”.
They also called on the tribunal to “be more transparent about the weight that community sentiment plays in its deliberations”.
Lambie went further, recommending a performance audit of the tribunal be conducted by the Australian National Audit Office.
It would not be surprising if Albanese government ministers, including Public Service Minister Katy Gallagher, are also uncomfortable with the level of secretaries’ pay, including compared to their own.
Years of pay rises
An underlying concern is whether the large increases determined by the Remuneration Tribunal between 2011 and 2014 went too far.
My own submissions to the Senate committee inquiries in 2018 and 2025 showed how those determinations increased pay for department heads from around seven times the average weekly earnings to more than nine times. For those in treasury and the department of prime minister and cabinet, it increased to more than ten times.
Those higher levels have been maintained by the tribunal ever since.
Secretaries’ remuneration was also increased significantly back in 1994. But that was related directly to the loss of tenure associated with the new “contract” system introduced under the Keating government.
The tribunal’s consultation paper reiterated the evidence it provided to the Senate committee inquiry that:
The Tribunal does not use private sector positions as comparators for Secretary roles.
That is disingenuous. The tribunal’s December 2011 report that guided its subsequent pay decisions refers to a report it commissioned from consultants Egan Associates. The tribunal referred to this Egan report as a “touchstone” for its assessments.
The Egan Associates report explicitly used a mix of top CEO and other private sector executive salaries as yardsticks for setting the remuneration of secretaries. The tribunal’s assessment closely followed the Egan proposals.
The tribunal is right now, however, to imply private sector pay should not be a factor in setting secretaries’ remuneration.
A complicated calculus
The current consultation paper lays out factors the tribunal says it weighs up when deciding on pay.
One thing it rightly considers is how department head salaries compare to those running key economic regulators, such as the Reserve Bank and the Australian Securities and Investment Commission (ASIC).
But the tribunal itself sets the regulators’ remuneration. We don’t know if they’ve used private sector comparisons to determine those or whether public sentiment was considered.
What about senior executive pay?
The tribunal also rightly highlights the relevance of the remuneration of secretaries’ direct reports. These are deputy secretaries and other Senior Executive Service (SES) employees.
But these salaries vary wildly across departments. While on average, salaries have increased in line with average national earnings, some have increased much more.
This came about because central controls on public service pay were devolved in the 1990s and 2000s. Most people on Senior Executive Service wages were placed on individual employment agreements. While such individual agreements have since disappeared, the wide variations in pay continue.
To solve this, the tribunal needs to work with the Australian Public Service Commission (which oversees Senior Executive Service pay). This should have been the priority, rather not boosting department heads’ pay to account for some of their direct reports earning high salaries.
High-status jobs
The other factors the tribunal considers largely make sense. They include the powers, responsibilities and accountabilities of secretaries; the characteristics, skills, experience or qualifications required; and the remuneration of similar offices.
Missing is any consideration of tenure. That requires government attention, but a sensible shift away from allowing termination at any time for any reason could lead to a lower rate of pay in return for greater job security. Most secretaries would probably support such a move.
The last factor listed, “the non-financial rewards associated with the office, including the status, profile, influence and professional standing conferred by Secretary roles” is key. This goes to the heart of why people join the public service in the first place.
Burgeoning research since the early 1990s has questioned an emphasis on financial incentives in the public sector. It instead stresses the importance of “public sector motivation”: that people join the public service for the common good, or to make a positive difference.
Judgements about how much to rely on public sector motivation rather than remuneration vary. Australia currently gives much more weight to remuneration than most of our counterparts.
The question is whether we are right to do so, and whether that judgement has community acceptance, including among our political representatives.
Authors: Andrew Podger, Honorary Professor of Public Policy, Australian National University
