A significant pay disparity between a local council chief and the state's top political leader has ignited a fierce debate among Newcastle ratepayers, with many questioning how such salaries are justified.
CEO Pay Packet Exceeds Premier's
The controversy centres on the remuneration package for the Chief Executive Officer of Newcastle City Council. The CEO receives a base salary of $528,366 per year, with an additional $80,000 for serving on the board of Newcastle Airport, bringing the total annual package to $608,366. This figure notably surpasses the salary of the NSW Premier.
In a letter to the Newcastle Herald, ratepayer Peter Mullins of Rankin Park expressed the shared frustration of many residents. "The majority of the ratepayers who are responsible for this generous salary are struggling to meet quarterly rate charges," he wrote, highlighting a perceived disconnect between executive pay and community services.
Mullins and other concerned citizens are calling for greater transparency, asking: who sets these wage structures, and what tangible value does the CEO's role add to the council's operations? They argue that while suburban improvement and safety requests are often declined due to funding shortages, the executive pay packet continues to grow.
The 'Relativity' Spiral Triggered by Coal Mines
Providing historical context to the issue, former Maitland councillor and mayor Ray Fairweather explained the systemic cause behind rising local government salaries. He pointed to a long-standing internal practice known as 'relativity', which dictates salary hierarchies within an organisation.
"You cannot have an employee receiving a larger salary than the head of the organisation," Fairweather stated, recalling that traditionally, the difference between the top manager and the chief engineer might have been a mere ten cents.
The critical trigger, however, was the booming Hunter Valley coal mining industry over a decade ago. Mines desperately needed engineers and offered vastly higher salaries to attract them quickly. This created a talent drain from local councils, who were forced to make counter-offers to retain their own engineering staff.
"The relativity thing then kicked in," Fairweather explained. Once engineers received raises to match mining offers, the salaries of all managerial positions above them had to be increased to maintain the hierarchy. This created a domino effect that inflated wage bills across councils. He recounted a specific instance where Maitland City Council poached an engineer from Cessnock, only for the employee to return the next day after Cessnock made a higher counter-offer.
Fairweather noted that Maitland City Council budgeted a substantial $62 million for wages in the 2025/2026 financial year, a cost partly attributable to this historical salary spiral.
Calls for Accountability and Transparency
The revelations have strengthened calls for a thorough review of council remuneration policies. Ratepayers like Peter Mullins are demanding that full details of executive payments and pet project funds be made publicly available to ensure accountability.
The debate extends beyond Newcastle, touching on the broader sustainability of local government finance and the expectations of communities funding these salaries through their rates. With many households under financial pressure, the justification for six-figure executive packages in the public sector is facing unprecedented scrutiny.
The issue underscores a persistent tension in governance: attracting and retaining skilled leadership for complex organisations like city councils, while ensuring public funds are spent in a way that reflects community priorities and demonstrates clear value for money.
