H.—l4.

General Quinquennial Regrading. Section 17 of the Public Service Act, 1912, provided that the Service should be regraded at intervals of not more than five years. In the ordinary course a general regrading of officers of the Public Service was due as at the Ist April, 1934. It was felt, however, that the economic conditions which then existed made it difficult to establish values likely to remain reasonably constant over a period of years, and it was considered that the only practicable course was to postpone the regrading as was done previously during the war period, when the 1918 general regrading was deferred until 1919. Legislative provision was made, vide section 27 of the Finance Act (No. 2), 1933, postponing the general regrading until a date to be fixed by the GovernorGeneral by Order in Council. The provision reads as follows : — " (1) The Governor-General may by Order in Council fix a date on which the first general regrading of officers employed in the Public Service, the Post and Telegraph Department, or the Department constituted under the Government Railways Act, 1926, shall be made after the passing of this Act, and may by the same or a subsequent Order in Council fix the date on which the several regradings shall take effect. Such last-mentioned date may be the date fixed for the making of the several regradings, or may be a date earlier or later than that date. " (2) Every Order in Council under this section shall take effect according to its tenor, anything to the contrary in any other Act notwithstanding." Although it must be remembered that there is provision in the Public Service Act for special regrading where the duties or responsibilities of a particular position have materially increased, a general regrading at regular intervals is in the nature of a periodic stock-taking and is very necessary to ensure that all officers are graded respectively according to fitness and to the character and importance of the work performed by or assigned to each officer and grade. It is also desirable in order that the Service may, as far as is practicable, be brought into line with conditions and rates of pay prevailing outside the Service. It should not be assumed, however, that a regrading necessarily means a general raising of salary standards. The main purpose is to ensure that officers are placed in the grade or class which will provide a salary relatively commensurate with the responsibilities and duties performed. It is hoped that if economic conditions continue to improve it may be practicable to fix a date next year. Salaries of Administrative Officers. Heads of Departments are included in the Administrative Division. The Public Service Act provides that officers in the Administrative Division, except in the case of those whose salaries are paid by virtue of any Act—e.g., the Controller and Auditor-General —shall be paid such emoluments, salaries, and allowances as may be provided in the annual estimates and authorized by Parliament. The Public Service Commissioner, therefore, has no statutory power to determine the salaries of Heads of Departments, and they are not classified as regards salary as are other officers of the Service. Nevertheless, the Commissioner has on occasion pointed out that in his opinion the salaries paid to Heads of Government Departments do not compare favourably with what is paid to the occupants of no more important positions in the commercial world. If the Public Service is to be made attractive to men of capacity it is all important that the remuneration of officers exercising important administrative functions should be adequate and commensurate with the importance of their duties. The only method by which an administrative officer can obtain a review of his salary is by application to his Minister for consideration when the estimates are being framed. In previous reports it has been pointed out that there should be a definite grading of administrative positions according to the duties, importance, and responsibilities of the positions. The position now is that some officers are receiving less remuneration for important administrative positions than is paid to other administrative officers carrying out less important duties. In my opinion, these salaries, generally, call for considerable alteration.

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