The Australian Financial Review's annual Salary Review reported last Wednesday on the damage the Global Financial Crisis caused to the pay packets of Australia's best paid executives. CEO remuneration experienced an unprecedented double-digit decline over the past year. Worst hit were Macquarie Group's Nicholas Moore (down an extraordinary 99 per cent), and Rio Tinto's Tom Albanese (down 83 per cent). Bonuses were slashed, and the values of long-term incentive plans were diminished.
It's accepted by many that CEOs and workers are paid according to the importance of the industry or sector that employs them, and to their level of responsibility within it. Best-paid are bankers, mining executives, and others whose job is to ensure increased earnings for shareholders and the national economy. Teachers and welfare workers — who build non-financial wealth — are poorly paid. The clear implication is that educational and human wealth are less important than monetary wealth.
It has been repeatedly suggested that there is an important link between better results in schools and better-paid teachers, and therefore the wages of teachers should be increased substantially.
It follows that the same must be true for those in the welfare and community sector, 87 per cent of whom are women. This has in fact been recognised this month by Employment and Workplace Relations Minister Julia Gillard, who has agreed with the unions to nationally address the problem of low wages of community sector workers.
Increased remuneration for these people is not about greed. Rather it is offering them the opportunity to afford what similarly talented workers in other sectors take for granted. Among other things, this includes having the number of children they would like, and the option of sending them to a private school.
St Vincent de Paul National CEO John Falzon — who is not on the Financial Review's rich list — stresses the need for appropriate government funding for increased remuneration.
He said: 'Significant portions of the Australian population have been living in a permanent recession, cut off from opportunity and prosperity. It is a sign of a progressive democracy that we would, as a nation, seek to acknowledge those who have been there on the front line with them.'
It is gratifying that Prime Minister Kevin Rudd has been critical of the obscenely high remuneration packages of top CEOs such as Telstra's former boss Sol Trujillo. He needs to get behind the funding of increased wages for the