Department changes made by PM Scott Morrison resulted in nearly $4.5 million in executive termination payouts

Prime Minister Scott Morrison announced the department shake-up in December last year, consolidating eight departments into four and bringing the new total to 14.

"Australians should be able to access simple and reliable services, designed around their needs," Mr Morrison said at the time in a media release.

"Having fewer departments will allow us to bust bureaucratic congestion, improve decision-making and ultimately deliver better services for the Australian people."

The former education and employment departments merged to become the Department of Education, Skills and Employment, while Agriculture absorbed environment functions, Industry brought small business and energy roles into the mix and Infrastructure took on communications and the arts.

Five department secretaries were also told they would not continue in their roles.

The executive staffing cost of those changes is now reflected in department annual reports, which reveal that taxpayers were left with a bill for $3.05 million in termination payouts.

The largest of those went to former industry secretary Heather Smith, who received a $692,267 termination payout. Former Services Australia secretary Renée Leon received a dollar less than Ms Smith.

Following shortly behind were the former secretaries of infrastructure and employment, Michael Mrdak and Kerri Hartland, who received $667,553 and $667,552 respectively.

The former agriculture department secretary, Daryl Quinlivan, received a $333,776 payout for his departure.

When the payouts are combined with salaries and other benefits paid to the former heads, that figure increases to a $5.3 million cost across the five roles.

But it wasn't just those five secretaries who received termination benefits during the 2019-20 period.

A further four key management positions (KMPs) were terminated across Services Australia, Infrastructure and the former employment department.

Together the four employees received more than $1.4 million in termination payouts alone.

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According to the Remuneration Tribunal Determination, the instrument used to determine secretary pay and terms, secretaries are entitled to 12 months of pay upon termination if their term was not expected to end for more than a year.

Secretary terms typically last five years, with only Mr Quinlivan, who first became secretary in June 2015, expected to complete his term in 2020. If a secretary is terminated within a year of their scheduled end, they receive pay for each remaining month, according to the determination.

When asked whether suitable alternative employment was offered to the secretaries, a spokesperson for the Department of Prime Minister and Cabinet declined to address the question.

"Like many jobs, there are standing arrangements in place for secretaries whose jobs become redundant," the spokesperson said.

"It would not be appropriate to comment on the individual arrangements for, or negotiations with, affected secretaries."

None of the five sacked secretaries remain in the federal public service.

"This is not a savings measure," the spokesperson said.

"Nevertheless, in the long term, the remuneration costs for 14 secretaries will be less than the costs associated with 18 secretaries."