Salary spotlight
Civil service pay stoush
Aleading public servant who was knighted for services to the state has ignored State Services Commission (SSC) direction over chief executive pay for three years in a row.
Documents released under the Official Information Act show Dame Paula Rebstock, as chairman of the Accident Compensation Corporation, repeatedly ignored pressure from the commission when she and the rest of the board agreed to hike chief executive Scott Pickering’s pay.
Public sector senior pay reports published by the SSC show over the three years of the dispute, Pickering’s remuneration jumped by around $230,000 or 38 per cent.
In one year his pay leapt approximately $160,000, roughly the same as the base salary of a backbench MP.
While ultimately free to determine the pay of their chief executives, Crown entity boards are required to consult with the SSC about pay and justify salaries which are above a stipulated range, based on job size and complexity.
Where agreement cannot be reached, the issue is then argued with the responsible minister, meaning an annual showdown with then-ACC Minister Nikki Kaye.
Rebstock has repeatedly refused to be interviewed on the issue.
Her one previous statement, made when the SSC had only disclosed a single year of ACC ignoring advice, praised Pickering.
‘‘Under the chief executive, ACC has significantly reduced levies to Kiwis; privacy breaches have dropped dramatically; financial performance remains strong, public trust and confidence has been at record levels, more funding is going into injury prevention; and, significantly, the scheme has achieved full funding.’’
But Rebstock’s statement omitted any hint that the dispute was a running one, suggesting the issue was around less than 2 per cent of Pickering’s pay.
‘‘The State Services Commission supported an increase in the chief executive’s remuneration of 1 per cent. The ACC board considered this advice as well as market movement of more than 4 per cent.
‘‘Because of this – and the chief executive’s strong performance – the board approved an increase of 2.8 per cent.’’
Emails shared by SSC officials suggest ACC, rather than accept the Government’s suggested pay scale, had ‘‘made up their own remuneration range’’.
In February State Service Minister Chris Hipkins announced legislation to curb the scope of Crown entities to set executive pay and strengthen inquiry powers for the SSC.
National’s public stance has appeared tough, with then-Prime Minister Bill English chastising the Guardians of NZ Super for its handling of Adrian Orr’s salary and warning the board its tenure was in jeopardy.
Yet Rebstock remained a favourite to the end, made a dame for ‘‘public services’’ during the middle of the ACC salary standoff.
‘‘It suggests what was going on with the old National-led Government didn’t quite match the public perception,’’ Taxpayers Union Jordan Williams said.
Glenn Barclay, national
"We share the commissioner's concern about boards of Crown entities ignoring his advice ... at a time when most public servants have been subject to pay restraint." PSA's Glenn Barclay.
secretary for the Public Services Association, a union for public servants, said the commissioner
had been attempting to keep executive pay in check but some boards had ‘‘consistently ignored’’ guidance.
‘‘We share the commissioner’s concern about boards of Crown entities ignoring his advice and giving chief executives sometimes significant pay increases at a time when most public servants have been subject to pay restraint,’’ Barclay said.
In December State Services Commissioner Peter Hughes decided to name and shame the Crown entities which ignored his advice in the past year: ACC, the Guardians of the New Zealand Super Fund, and Telarc, a comparatively obscure standards
and training company based in Lower Hutt.
As he did so, Hughes hinted that some organisations had been recidivists, although New Zealand Super’s defiance of its advice was by then well known.
‘‘I do not believe increases of the magnitude given are warranted or justifiable in a public agency, especially where the increase follows previous increases over and above my advice.’’
While a number of different Crown entities have gone against the advice of the SSC over pay, only ACC and NZ Super, the nation’s largest fund managers, have done so repeatedly in recent years.