Malcolm Turnbull might be railing specifically against the pay packet of Australia Post boss Ahmed Fahour and more generally on the CEOs of ASX-listed companies, but if he’s going to actually do something about it, the place to start is his own backyard.
Public sector pay disclosure in Australia is all over the place. The federal government is 20 years behind ASX-listed companies, which have been comprehensively disclosing since the mid-1990s.
How Australia Post could even think it could keep Ahmed Fahour’s $5.6 million 2015-16 pay packet secret in its 2015-16 annual report is an indictment on the federal laws that gave the board that option. It should be compulsory — just like with public companies.
A few years back at the City of Manningham in Melbourne’s eastern suburbs, there was negligible pay disclosure.
It took more than three years of persuading councillors and overcoming objections from some of the senior officers to finally get a notice of motion over the line in May 2012 to voluntarily disclose the full contractual arrangements of the five most senior executives. Five years later, they are still voluntarily doing it, as you can see on page 90 of the 2015-16 annual report.
The same thing happened at City of Melbourne in 2012-13, where some senior officers at first argued it was illegal to make such disclosures. Voluntary full disclosure has now been going for four years, as you can see on page 87 of the 2015-16 annual report. The sky hasn’t fallen in as a result.
However, do you think there’s any support for this sort of voluntary pay transparency in other government bodies across Australia, or does everyone just slavishly follow the letter of the law?
When a motion was put up to the Municipal Association of Victoria state council in October 2014 for the five most senior MAV executives to have their pay disclosed, it was defeated 28-36, and you can see how individual councils voted on page 15 of this report. The lead opponent on the floor of the conference was none other than the state-appointed administrator of the notorious City of Brimbank, John Watson, a former departmental boss of Local Government Victoria. He claimed senior executive pay disclosure was a breach of privacy.
The same thing happened at the National General Assembly of the Australian Local Government Association in 2015 as was explained in this Crikey story at the time.
State and federal governments aren’t much better. Let’s go around the grounds with a quick survey to see where practices actually sit on public sector pay disclosure.
Forestry Tasmania: An important state-owned enterprise in the Apple Isle. It is buried on page 132 of a 142-page annual report, but at least you get the annual cash payments to the individual directors and the top six executives. It would be nice to also have start and finish dates for current contracts, but this isn’t too bad.
Sydney Water: The biggest government-owned water utility in Australia, and they are still using the hopeless bands system with no specific individual disclosure of executive pay. See page 115 of the 2015-16 annual report.
Reserve Bank: Buried in the fine print on page 167 of the 201-page 2015-16 annual report is the disclosure that the governor collected $1.03 million and the deputy governor $771,000. There is no breakdown of director payments, just a collective figure of $794,975 and no granularity on any other senior executive payments, let alone details on contract terms.
Queensland Investment Corporation: Page 17 of the 28-page annual report gives lots of reassuring words on executive and board pay but absolutely no financial information. However, the separate 46-page financial statements give individual board and senior executive pay details, plus expiry dates for terms, which is excellent.
ASIC: The 2015-16 annual report runs for 222 pages and gives all sorts of detailed information but nothing meaningful on the pay or contractual arrangements of commissioners and senior executives. Why not?
Western Power: The biggest Western Australian state-owned corporation gives good individual disclosure of the director board fees and total packages of the five most senior executives on pages 23 and 24 of the 2015-16 annual report.
South Australian Government Finance Authority (SAFA): The board fees are still stuck in the old no names band system, and the 2015-16 annual report says the senior executive pay disclosure is handled in the Treasury Department’s annual report. As a standalone statutory authority, the executive pay should be broken out here.
Icon Water: An integrated utility owned by the ACT government. Excellent comprehensive CV and pay disclosure of board and management near the front of the 2015-16 annual report.
Transport Accident Commission: Victoria’s monopoly third-party insurer delivered an eye-watering $933 million operating loss in 2015-16. The latest annual report only has incomplete band disclosure for the “responsible persons” involved in this performance on pages 62-64.
This is not comprehensive, but these survey results would suggest that the Commonwealth, South Australia and the two largest states, NSW and Victoria, have the weakest pay disclosure practices.
If Malcolm Turnbull, Daniel Andrews, Jay Weatherill and Gladys Berejiklian want to build some community trust through transparency reform, this is an obvious place to move before all the 2016-17 annual reports are released.
* Stephen Mayne is a former councillor at the cities of Manningham and Melbourne.