Decades of flawed pay policy have left the Commonwealth public service with a dysfunctional remuneration system – and the latest round of enterprise bargaining looks unlikely to fix it.

For decades remuneration policy in the Commonwealth public service has been a wasteland of bad habits, willed ignorance and hypocrisy. A rational structure of pay and conditions of employment is the key to personnel management – that doesn’t exist in the Commonwealth’s administration. Happily a lot of people are responsible so the blame can be widely shared.

The rot began to set in when, during the high inflation of the 1970s, pay increases were linked, roughly speaking, to movements in the Consumer Price Index.

This morphed into the critically important Wage Accords under the Hawke-Keating governments that more or less mandated similar pay adjustments for all unless for certain occupations or groups that would be anomalous.

Then came enterprise bargaining in which, usually in mysterious ways, improvements in remuneration were linked to productivity improvements at the firm level.

As problematic as enterprise based productivity bargaining is in general, it was especially so for public sector organisations because for almost all of them it’s not possible to measure their productivity. Fair dinkum productivity bargaining can’t be made to work in the Department of the Treasury, for example.

To rub salt into the wound, in the Commonwealth public service, individual departments and agencies were defined as “the enterprise”, so off they all went negotiating their own pay and........

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