Tuesday, 5 September 2006
Remuneration and Allowances for Holders of Public Office and Members of Parliament
Motion for Disapproval
I want to contribute to this debate as well because I think there are some wider issues that do need to be put into the mix and to be recognised in the wider community. There have been valid arguments put both for supporting this disallowance and for opposing it. I think that should be acknowledged. We should take the name-calling opportunities for either side out of it. The base issue here is the most recent determination, which this disallowance goes to, provides a seven per cent increase for federal parliamentarians plus flow-on increases for people with various positions such as committee chairs, ministries et cetera. It takes the base pay to just under $119,000 per annum. That rise is certainly significantly more than the CPI. It is a valid and understandable principle to state that the Remuneration Tribunal should set politicians wages rather than the politicians doing it. That is a very wise and sensible approach.
Nonetheless it does have to be acknowledged that we do still have the power as a parliament to reject that determination by the tribunal. Certainly, according to the research note put out by the Parliamentary Library on this topic—and it is on the internet, so I would suggest that anybody interested look it up; it gives useful background information—entitled The annual allowance for senators and members, parliament has in the past resolved to disapprove determinations by the Remuneration Tribunal, which has been in existence since 1973. The parliament disapproved the tribunal’s determination in 1974 increasing the annual allowance. According to the Remuneration Tribunal report from 1999-2001, in the 30 years of operation of the tribunal the parliament has also modified determinations, postponed increases and enacted reduced allowances previously determined by the tribunal as an exercise of wage restraint. The precedent is there, but I think it is wise for all sorts of reasons not to go dabbling around in it terribly often—and ideally not at all. There is an issue—and it is something that I think it is appropriate to clarify; it was not quite clear from the way the minister was telling it—about the flow-on effects to other positions. Certainly there is an issue that this disallowance does also affect the pay rates of people in other positions, such as those positions that the minister read out. That is a valid issue to take into account. I am not sure if Senator Brown is able to deal with that issue in his summing up remarks.
I also want to note the wider issue of current income levels of people in the general community. Obviously, it is desirable for parliamentarians not to determine our own pay rate, because it is understandable that people would assess that we cannot do so objectively. It is also worth noting the real context of pay rates for people in the general community and some of the flow-on issues, such as where the different tax levels kick in and other various allowances. It is, of course, no secret that there is a genuine and well-held belief by many people, myself included, that there is a significant prospect of many people in the Australian community having their pay rates—and that includes other flow-on allowances—being significantly reduced because of changes in the workplace relations laws in recent times.
I think there is also a need to just be more realistic about what most Australians are actually paid. I particularly wanted to speak in this debate because there is an aspect in a lot of the media commentary about pay levels that creates an impression that people who earn $70,000 or $80,000 are, pretty much, average wage earners and around about the middle of the pack. It creates an impression amongst a lot of people in the community who do earn that amount that that is where they are—around about the middle of the pack—and that most people earn that amount and it is not really all that much. I think it is important to put on the record that, according to the most recent statistics from the ABS that I was able to get, the number of people that earn over $104,000 per annum is less than four per cent. Only four per cent of people in the paid workforce earn over $104,000. Federal parliamentarians, with this pay allowance, will be on $119,000, so we are talking about being in the top two or maybe three per cent of wage earners in the community.
I am not against federal politicians being reasonably well remunerated. I think there is a reasonable principle there and I do agree with the comments that have been made that, certainly, senior ministers and the Prime Minister could merit being paid significantly more. I think there is probably a discrepancy between the work levels of your average parliamentarian as well, which makes it difficult to determine so-called merit and productivity principles and all of those sorts of things. But the simple bottom line is that it is a very small minority of people who earn a six-figure annual salary, and I do not think that is recognised adequately in community debate. I have to acknowledge that I am on record in this place in the debate regarding superannuation—I actually gave evidence on behalf of the Democrats to the Senate committee examining that legislation—and my view was that the general pay rate for federal politicians was adequate. That was even with the removal of the excessively—and some would say obscenely—generous superannuation entitlements which were then being sought to be removed. So, to have a significant leap at a time when many people, particularly those in less secure or part-time jobs or those who rely on allowances and bonuses, are at risk of significant reductions in their take-home pay is, I think, less than ideal for a whole range of reasons.
It is also worth putting on the record the actual average incomes. Personally, I believe the better measure when looking at average income is the median income of Australian wage earners rather than the mean, which is what is usually used when people talk about average weekly earnings in the mainstream media. The mean average weekly earnings for people in full-time jobs is about $55,000 a year, on the most recent statistics. For all workers, full-time and part-time—of course, many people are not able to obtain full-time work—that drops to $42,000. But the median, which is the midpoint—which means half the people earn less than that—of all people in full-time work is only $900 per week, or less than $47,000 per year. If you take that to include all people in all paid jobs, full or part-time, it drops to $36,500. So half of all Australians in paid work earn less than $36,500 a year. I think we need to be using those figures much more as reference points when we consider issues like tax scales, pay rates and pay levels. Only half of all Australians in paid work earn more than $36,500 a year, and it is about 3¼ times that to get up to the level we are talking about for federal parliamentarians. I think those sorts of discrepancies are problematic when you are looking at issues of equality in society.
Of course, statistics can always be misleading, and there are factors of dual-income households, people consciously choosing to be in part-time work and all sorts of other things. I recognise that there are always different factors you can put into play. But the bottom line is that the majority of Australians earn a lot less than is generally assumed, given the way average earnings figures are talked about in the mainstream media. The percentage of Australians who earn the level of salary that we are now talking about here is a very, very small minority. I think we should recognise that. We are talking about all of us being in the top two or perhaps three per cent of income earners in the country.
I am not into gratuitous politician-bashing for the sake of it, but I do think that we need to at least have a realistic perspective of where things sit with regard to all Australians, let alone the average Australian, when we are having debates like this.