Some senior bureaucrats earn more than $1 million a year. How did we get here?

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^[1] 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^[2] 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^[3] 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^[4] over the last decade into legislation^[5] proposed by crossbench senators.

Most recently, Senator Jacqui Lambie introduced a bill^[6] in 2025 proposing a cap on department sectretaries’ pay based on the remuneration of the prime minister and the treasurer.

The committee recommended against^[7] 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^[8]. 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^[9] 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^[10] 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.