PM earns twice the salary of Boris Johnson – but is he worth that much?

PM earns twice the salary of Boris Johnson – but is he worth that much? By Adam Creighton.

A bigger and higher-paid public sector is a double whammy, shifting workers into less productive work, by and large, while sapping the incentive to work and hire in the private sector — the ultimate source of our prosperity. …

Wages will increase when prod­uctivity increases, not when government decrees it so. The federal­ government had almost 241,000 staff in June last year, the states 1.56 million, and local governme­nts 188,000. …

Our public servants are well paid, especially at the top, where pay is frequently double — in some cases almost triple — their British counterparts. Our Treas­ury secretary, on more than $893,000, receives 170 per cent more than his British equivalent, who presides over a considerably bigger department and a G8 economy almost three times the size.

Scott Morrison earns more than twice that of Boris Johnson (who makes do with less than £150,000 or $265,500), who argu­ably has a more difficult job, especially now as he walks the political tightrope to extricate Britain from the EU. Our chiefs of the army, navy and air force, on about $580,000, earn 90 per cent more than their British equivalents, who oversee a nuclear arsenal.

Our chief statistician, on more than $700,000, earns 90 per cent more than his British equal. And London is much more expensive than Canberra.

There’s a deeper problem with these sky-high salaries beyond the cost and public contempt they generate. They align the top echel­ons of government not with the public, who earn vastly less, but with that sliver of private sector interests whose outlandish pay is used to justify ever higher public sector pay at the top. Thus, reforms that might boost competition or curb rent-seeking will not be favoured by the bureauc­racy in a way they once would have. …

Even if they can, many would prefer a public sector job paying $85,000 than a private sector one paying $95,000. Conditions in the public sector are extraordinarily generous, including 15.4 per cent superannuation, and generous dollops of “personal”, maternity, and annual­ leave unavailable in all but the biggest businesses.

How about setting ministerial salaries as multiples of the average wage, like say five times the median wage? Might produce some better incentives.