Government "mission support" or admin staff work under regulatory and operational constraints that our private sector counterparts do not. I was on TV overseas once explaining the U.S. electoral college - in a foreign language - and that was a cakewalk compared to the effort I have to put into making USG procurement and HR policies comprehensible to my program colleagues.
Government program staff may be more qualified than their private sector peers, but not in every professional field and under every circumstance. Very few of the program people I know could get the same combination of salary and work-life balance in the private sector that they get in the government.
We don't pay a differential to people in the 301 series (general staff) to keep them in government. We do pay a differential to the people in the 2210 series (IT) to keep them in government. If relative staff turn-over and competitiveness in the private sector are measures of relative qualification, then your senior government official has it backwards.