Tuesday, 5 September 2006
Remuneration and Allowances for Holders of Public Office and Members of Parliament
Motion for Disapproval
I want to commence my contribution to this debate by stating points of principle. Firstly, I and my party have always consistently and absolutely supported the view that an independent tribunal should determine matters of salary and allowances for parliamentarians. That means that we are very wary of a parliamentarian seeking by motion to determine an actual amount or percentage on the floor of the chamber, because that effectively means that you are not accepting the independent adjudicator’s view; you are accepting that there should be some increase and you are adjusting it accordingly.
I and my party, however, have always supported the view that these increases should be subject to tabling as a legislative instrument so that parliamentarians can express their views—and, of course, they can reject them. I think the option that should be before us is either to accept or reject an increase. It is open then for the parliament to say to the Remuneration Tribunal to think again.
I welcome this debate. I think Senator Bob Brown does us a service by bringing it on, because there is no doubt that the salary and allowances and the general conditions of employment of parliamentarians are constant issues for both the media and the public. I think it is important that parties and individuals express their point of view. There too I probably disagree with other senators from other parties in that I think that because these matters affect each senator and member individually this is the sort of issue on which there should be a conscience vote, not subject to the party whip. Frankly, it is a matter of personal belief. Some of us might think we are vastly underpaid, some of us might think we are paid just right and some of us might think we are overpaid. It is a personal opinion. I would prefer it if this were a declared conscience vote. My own party of course takes the view that every vote is a conscience vote. I am sure that they will express themselves individually on this if they so choose.
The issues put to the debate by Senator Bob Brown are a contrast with government attitudes to wage increases in other sectors of the economy. Of course, as Senator Brown is aware, the non-government senators have expressed a very strong concern and in fact have opposed the government’s Work Choices changes and the effect they may have—and we do not know how they will turn out—on individuals’ wages and conditions as determined by the new Fair Pay Commission. Frankly, this is a separate issue. This is an issue as to what parliamentarians should be paid. As Senator Evans quite rightly said, there is a debate as to whether the way in which parliamentarians are remunerated, in state and territory parliaments as well as in the federal parliament, affects the calibre, quality and type of person willing to put themselves forward for public office. It is not as easy to say that it is just a job and that if it is properly rewarded the right people will turn up, because there are all sorts of other aspects which affect public life, including very intrusive public scrutiny and media attention, a much less private life and a somewhat insecure and short-term professional life for some parliamentarians as well, with the opprobrium that can go with political life and expressing your opinion on matters politic.
I think this debate has in its background a failure of policy by the Howard federal government. I think they missed an opportunity way back in the earlier years to refer matters as a whole affecting parliamentarians’ salary packages and so on to the Remuneration Tribunal. If they had done so, I think we might have avoided some of the difficulties that we are now faced with. I refer particularly to the fact that the changed superannuation regime has resulted in new politicians—if I can describe them as such—as opposed to former politicians who were there before that change, being effectively paid a lot less as a package than those who were there before that happened. I think that if the overall circumstances of parliamentarians’ remuneration had been addressed in a holistic manner before this we might have had a more balanced package.
I want to refer the chamber to the remarks I made with respect to these issues when the Members of Parliament (Life Gold Pass) Bill 2002 was before the chamber. There was a Senate inquiry into that and I made some additional comments to that Senate report in September 2002. I will lift some of those because I think they are germane to the points I wish to make again. I said:
Over time, the Australian Democrats, along with other Senators and Members, have called for a number of major changes to parliamentarians’ entitlements. These have included calling for a reduction in parliamentarians’ superannuation to more closely match community standards, and the cessation of parliamentarians’ retirement travel benefits.
The Senate has consistently expressed reluctance to take a policy position on these matters, claiming that these are the province of the Remuneration Tribunal. There are essentially three categories of entitlements afforded to Members and Senators. These are
- their ‘salary package’
- what they need to do their job
- their ‘retirement package’
The first includes matters such as salary and fringe benefits (car and other benefits). The second includes electorate allowances, office expenses, and staff allocations. The third includes superannuation and retirement travel benefits, including entitlements available under the Life Gold Pass.
There has long been a great public clamour for parliamentarians’ entitlements to more closely match community expectations and standards. This has been a key feature of the inquiry into the proposed Bill, with submitters overwhelmingly opposed to travel entitlements as ‘perks’ that have no place in modern Australia.
Later on in my remarks I said:
As for any employee, the salary package of a parliamentarian should be assessed, first, in terms of the work a parliamentarian does (‘work value’), and, second, in terms of each member’s specific personal responsibilities.
Other factors bear consideration. A few come to mind. There is risk—for instance, the risk of not getting re-elected, or the risk of having greater difficulties in securing employment post-politics. There are community standards and expectations, and how to assess or determine them. In assessing an appropriate salary package, what are the community standards and expectations? Then there is comparative analysis—should entitlements be affected by international or federal benchmarking?
It does seem certain that the community will not judge the appropriateness of a parliamentarian’s salary package in isolation from other entitlements. The three categories outlined above do intertwine in the public mind. The public (and many parliamentarians) do seem to have the view that when the present superannuation entitlements are taken into account, overall, parliamentarians are well paid. This is probably true for long serving backbench parliamentarians, but it is less the case for parliamentarians serving a shorter term.
The public seem less convinced that members of the Executive are paid appropriately, taking the Prime Minister and the Treasurer as obvious examples. It is striking that the salaries of ministers are far below the salaries of senior executives in the private sector, (and even some in the public sector). Service as a Minister of the Crown is a great privilege and honour, and one expects it to be accompanied by a lower salary package than commensurate work in the private sector. However, if the objective of parliamentary entitlements is to reflect community standards, the point must be made that ministerial salaries are way out of touch with salaries paid to executives with far less responsibility than ministers.
This inquiry provided support for this view. The Department of Finance and Administration advised the Committee that federal members’ salaries were lower than might be expected. It referred to Parliament’s rejection of the recommendation by the Remuneration Tribunal to increase the salaries of federal members and the consequent introduction of the Parliamentary Remuneration and Allowances Act.
Mr Brian Moore referred to the results of work value studies undertaken for both federal and state members of parliament that found that rates of remuneration for members of parliament were not equivalent to their respective levels of responsibility.
Mr Moore and the W.A. Salaries and Allowances Tribunal advised the Committee that that body had undertaken a review of the overall remuneration of state members of parliament in that state. They advised that the Tribunal had taken the view that it was more appropriate for a person to be remunerated appropriately while giving service, rather than afterwards. It had, therefore, on the basis of work value studies, awarded a salary increase to state members in return for reducing and, finally, phasing out the retirement travel benefits to which former members had previously been entitled.
Later on in the remarks that I made to that Senate report I stated:
The Australian Democrats consider that, instead of providing for compensation post service members of parliament should be paid an appropriate salary for the work they do while in office. Except for transitional arrangements on leaving office, retirement benefits should be confined to superannuation at levels in accordance with community standards.
The introduction of this Bill provides an opportunity to address more than the excessively generous retirement package available to some former members through the Life Gold Pass. I agree with the Committee that it also provides an opportunity for an holistic re-examination of parliamentarians’ salary packages and entitlements on an objective basis. Crucially, this should provide an opportunity to bring superannuation entitlements into line with community standards.
I have gone at some length through those comments because that opportunity was missed. The Howard government saw it as the remarks of a minor party senator and wandered on without doing that job. We are still in a situation where a holistic review of the total package is not available.
It does seem, however, that the message has got through, largely because large numbers of parliamentarians under the new parliamentary superannuation rules are now rewarded less as a package than politicians who were in office prior to that occurring are. Though I would not know for sure—perhaps the minister would—I have seen estimates that it can amount to a difference overall of as much as $50,000 a year. That seems a vast sum of money for people who are essentially employed on the same basis.
One of the problems we have as parliamentarians is that many members of the public are simply not aware of what we do. It is quite common for me to meet perfectly intelligent, able, capable members of the community who think that when parliament is not sitting, I am on holiday.