Wednesday, 8 August 2007
Principal Executive Office Classification Structure and Terms and Conditions
Motion for Disallowance
That Determination 2007/04: Principal Executive Office (PEO) Classification Structure and Terms and Conditions, made pursuant to subsections 5(2A), 7(3D) and 7(4) of the Remuneration Tribunal Act 1973, be disallowed.
This is, of course, the Greens’ motion to disallow the regulation to increase the pay of members of parliament. The two regulations before the Senate would increase the income of members of parliament by 6.7 per cent. That comes on top of a seven per cent increase this time last year. It will mean that this year the average pay of members of parliament on the back bench will rise by $8,000 to $127,000 per year—that is, if you do not take into account electoral allowances and all the other provisions for members of parliament. This 6.7 per cent would increase the Leader of the Opposition’s income by $15,000 to $235,000 per year and it would increase the Prime Minister’s salary by $21,000 to $336,000 per year.
Let’s do a comparison. The Prime Minister’s salary will go up by $21,000 per year, but the 1.2 million pensioners who made this country what it is are on a total of $13,652 per year. We are seeing an increase in the Prime Minister’s income that is almost double the total-year income for the 1.2 million pensioners of this country. That is unfair, that is unjustified, that is not right and it is no way to honour the people who have contributed so much to this country. We are proposing not simply a stopper on an unjustifiable pay rise to members of parliament but that the money go to giving a very necessary and justified lift in income to 1.2 million pensioners in this country—the Prime Minister’s 1.2 million forgotten Australians. They deserve the pay increase, not us.
When you look for justification for this 6.7 per cent increase on top of the seven per cent last year—a 14 per cent increase—there is none. The Remuneration Tribunal, which is said to be independent but is nothing of the sort in my book, gives no justification. It calls none of us before it. There is no increase in workload, greater demand on our services or productivity output improvement to justify this increase, which for all of us is $8,000 per year and for the Prime Minister is $21,000 per year. Certainly let us have an increase which keeps up with the cost of living in Australia. That is what the pensioners get. But no, that is not the case for members of parliament who represent those pensioners and, indeed, average Australians in their millions. While pensioners have had no real increase in their income during the 11 years of Prime Minister Howard’s government compared to the increase in the cost of living, the income of members of parliament has gone up by 85 per cent—pensioners, zero; members of parliament, 85 per cent. Who opposite, or indeed in the Labor ranks, is going to justify those figures? There will not be justification because there is no justification.
When we look at the measly pension—the $260 that pensioners get to make ends meet in this country—it is very easy to overlook the fact that the cost of living index does not reflect increasing costs for them in particular. As we all know, cheap imported goods—which we on higher incomes buy in great amounts—are largely beyond the reach of the people on the lowest incomes in the country, including pensioners. What is not beyond their reach—because they have to pay these costs—are the much more rapidly increasing costs of rent, food, transport and services. So in fact, when you take that factor into consideration, we see that pensioners have not only not kept up with parity but also are very probably losing ground. The pensioners I speak to, including a wonderful group of Greek Australians in Marrickville on the weekend, are finding it very tough indeed to make ends meet in this wealthy Australia of 2007. They do not like the fact that we parliamentarians get such things as gold cards when we retire for free travel. They note it but they cannot do anything about it. They feel cheated because they have worked for decades to put this country on the basis that it is on, and none of us can deny them that. Our wealth has come out of their labours. But they are not being rewarded for it; they are being overlooked and forgotten.
What we Greens are saying is, ‘Well, let’s put the parliamentarians’ pay increase towards giving the pensioners a pay increase instead. We are up 85 per cent. Let’s lift them from zero per cent and give them a break.’ If the current tax breaks for the mega-rich in this year’s Costello budget can put $3.5 billion into the pockets of people taking home more than $75,000 a year—and every member of this parliament is included in that bracket—then we have more than ample funds to give the 1.2 million pensioners, and indeed the 600,000 part-pensioners, a reasonable increase. What will it be? Will it be the $160 increase that we backbenchers are getting at the moment or the hundreds more for the Leader of the Opposition and the Prime Minister? No, it will be $30 a week for pensioners—that is, one-tenth. Surely we can forgo this one pay rise and this one tax cut to give the pensioners of this country one-tenth of the amount that will land in our pay packets if we do not do this. One-tenth is $30 a week. Is it too hard in this age of wealth in this country to give the pensioners of this country $30 a week? We Greens say, ‘No, it is not.’ It is not only not too hard; it is warranted, it is right and we should be doing it. We cannot in good conscience put our hands into the taxpayers’ pockets to line our own and turn our back on the pensioners of this country, as the Prime Minister and the Leader of the Opposition want to.
I realise how the numbers fall, but I make an appeal here—and maybe this will be heard by the Prime Minister or the Prime Minister in waiting. It is high time that we were debating the pensioners, who have been forgotten, rather than ourselves—who get thought about too often. It is a tough job being in here. We are open to all sorts of pressures that maybe quieter citizens do not have. But that is our privilege and that is our option. They have none. They are dependent on us. The budget this year left them out altogether save for one thing. There were big tax breaks right across the board which privileged the rich much more than the poor and the middle-income earners in this country. On top of that was $3.6 billion for those earning over $75,000—which we Greens oppose. Hidden in the budget was a one-liner saying, ‘Pensioners will get a once-off $500 in the run-up to the election.’ How tawdry is that? If that is not a ‘sit quiet, take the money and vote for us’ inducement for votes from this clever Prime Minister’s backroom thinkers then what is it? I was in Burnie the other day when an aged pensioner came up to me and said, ‘Well I’ve got $500 and I want to put it into your campaign because I think it would do better if Mr Costello knew it was coming in your direction.’ That was one person’s view of how she wanted to see the country go. It is my job to see that she is not out of pocket over that, but the thought was there.
We have many elderly or incapacitated Australians on the pension. They are not highly organised. They do not have an open door to the politicians’ offices like the big corporations and the big end of town to get the mega tax breaks. It is so easy here to take them for granted, and that is what is happening here. Australia’s pensioners are being taken for granted—and, I think, taken down. We can do better. We must do better. We Greens are taking a stand here today. This is not just about blocking an unwarranted, unjustified pay rise for members of parliament in 2007; it is also about remembering those who are struggling to make ends meet in 2007. Wouldn’t it be better if some of those mega tax breaks had gone into the public health system? What about a dental care system for this country? Prime Minister Howard cut out the concession card holders’ dental care system in his first year of office. Now we have pensioners waiting two years to get a tooth looked at in mega-rich Australia 2007. Is that the legacy of the Howard government when it comes to social justice in this country? We can and we must do better than that. This motion today is a very strong statement for the Greens saying to the big parties who hold office or are in opposition in this country; ‘Think again on this pay grab. Think again about the plight of those people who cannot make ends meet in 2007. They deserve some of the wealth of this country which they are being denied.’
I rise on behalf of the Labor Party to indicate we will not be supporting the disallowance motion moved by Senator Brown. As I understand it, the disallowance motion seeks to disallow the determination by the Remuneration Tribunal which led to a 4.2 per cent increase in salaries for those people affected by the decision—essentially, the principal executive officer remuneration range upon which the parliamentary salaries are linked. It also, as I understand it, affects about 95 senior public servants. The allowance to senators and members is pegged at the reference salary of band A in the lowest of the PEO ranges. So, by moving this motion, Senator Brown seeks to deny the pay increase to politicians, but of course also denies it to a range of public servants. I understand the reason he has done it. I am sure it is not his intention to affect them in that way. I think he expects to lose it, but, in doing so, I suspect he might have lost 95 potential votes among those public servants. I am not sure how many of them vote Green, but they will not be voting Green next time, Senator Brown.
My problem with this, as I have said previously, is that Senator Brown proposes that we set our own salaries. Senator Brown says he knows better and this Senate knows better how to establish the rate of pay for senators and members. By moving this motion, he seeks to put an alternative proposition to that one determined by the independent body, the Remuneration Tribunal, which is authorised to set the salaries of members of parliament. On this occasion, Senator Brown seeks to say, ‘No, we won’t use an independent umpire’—the sort of independent umpire that Senator Brown has supported in terms of IR legislation for other workers in this country and has had a good position on over the years; allowing the right for independent determination of such things. On this occasion, he says, ‘I, Senator Bob Brown, will tell you what the salary of politicians ought to be.’ Now there may be others who want to argue a much lesser position than the total remuneration package Senator Brown proposes. But, effectively, Senator Brown says: ‘I know better. On this occasion, I will determine what the rate will be by disallowing this regulation. I will take it out of the hands of the independent umpire and I will make this parliament decide.’
Fundamentally, I have always opposed the proposition that people should set their own salary and conditions. We are no better at doing it than anybody else. We are totally conflicted and any ability to try and explain such decisions in a wider audience would be undermined by claims of self-interest. Whatever we do, we cannot win. But, quite frankly, we are not the appropriate body to set the salary and conditions. I think it would be totally inappropriate for the Senate to seek to establish the rates of pay and conditions for politicians. It is just not appropriate. Because of that recognition, in 1999 the government made a regulation under the Remuneration and Allowances Act to link the parliamentary base salary with reference to the tribunal’s principal executive officer structure. It basically allowed the tribunal to manage the salary structure since that time.
The difficulty for us, of course, is that every time there is a movement it comes before us by way of the determination and it gives an opportunity for someone to seek to have a debate about it. I am fine with a public debate on the issue. I am fine with a public debate about politicians’ salary and conditions, but I am not relaxed about us determining them. I am happy to have a debate, but I am not happy about making the decision because no-one will see us as independent on that subject. I just think it is totally inappropriate and wrongheaded for us to set our own salary and conditions. That has been a principle broadly accepted by parliamentarians and broadly accepted by the public. No-one, apart from Senator Brown, argues that the Senate ought to set the salary.
Senator Brown is saying he has made an independent judgement as to what the appropriate salary ought to be for a senator and member, and he is going to give effect to that by his motion today. So Senator Brown is now putting himself as the independent umpire of his and our conditions by what he seeks to do today. He says, ‘On this occasion,’ but, quite frankly, this process has been followed before. I cannot remember when—I did not bother looking up on which previous occasions Senator Brown or others have done this—but it has been quite common in other parliaments for, generally, minor party senators to use the opportunity to play some cheap politics. I think the Greens did it in Western Australia at one stage in the state parliament. It is useful in terms of publicity. I assume you get a lot of coverage from it. That is your prerogative. But the reality is that good public policy requires, in my view, that the parliament not seek to set the terms of the salary and conditions of parliamentarians. We do not have a great record on it. We are totally conflicted in doing so and there would be no public confidence in any decision-making processes that we took in that regard.
I think we are better off having all our salary and conditions set by an independent Remuneration Tribunal, as I have never been comfortable with us seeking to set some of our other conditions. I remind senators of the government’s decisions in relation to MPs’ print entitlements, where the government determined those levels and brought them before the parliament. I just do not think we are the right people to be making those decisions. The government got it wrong. It appeared highly politically motivated to increase MPs’ printing entitlements in the lead-up to a federal election. It favoured the government party because they had more members. The whole thing looked like a political stunt and the whole thing brought politicians into disrepute. As far as I am concerned, an independent Remuneration Tribunal should set all of those conditions. I am not sure that is our official party policy; I will check that. But, as far as I am concerned, hands off! We are not the right people to determine those things. There ought to be independent assessment of those things.
Senator Brown talks about public disquiet. Everywhere I go people tell me they do not think politicians are paid enough—particularly the Prime Minister and senior ministers. Maybe that is because I am moving in the resources sector these days and they are all earning a packet and anything under 500 grand looks paltry. But, to be honest, even when I had the shadow portfolio which covered FaCSIA and I was moving among the community sector, they tended to express the view that they thought, because of the hours and the responsibilities, not all politicians were paid enough.
I do not share that view. In my personal judgement, the salary is about right. I do not think paying politicians will attract better people to politics, but I guess I would say that, wouldn’t I? I do not adopt that argument. People go into public life for reasons other than salary. It ought to be of a sufficient level that people are not making a massive sacrifice, but, equally, I do not know of anyone in public life who would be motivated by a minor adjustment in pay rates. As we know, we have a fair share of millionaires in the parliament these days. They are not doing it for money—it is costing a few of them—but that is a sign that we can attract all sorts of people to the parliament and that they come in for reasons other than the salary.
But the fundamental principle that this parliament has endorsed and the community broadly accepts is that we should not set our own pay and conditions. Senator Brown’s motion has the effect of seeking to get the parliament to set them again by virtue of the disallowance opportunity of the regulation. It is a bit opportunistic of Senator Brown to seek to do this. I understand why, but I have seen these stunts before about rejecting this pay rise or that pay rise. Every time it comes up it is an opportunity, but I think we ought to be more systematic in the way we approach it. We ought to say: ‘What are the principles? How should these be determined? What is the process?’ Establish that and leave it alone; do not seek to interfere when one thinks there is political advantage in running one case or the other. That is a principle this Senate ought to endorse.
The issue that Senator Brown was right to raise, and which is an important issue, is the level of the age pension. He expresses concern, rightly, about the level of the aged-care pension. I, frankly, do not understand how people live on that income. I never have. It is interesting: I was chatting to my father the other day, who is an independent retiree as a result of his employment, and he was expressing the view of how well off he was in comparison to pensioners and how he was appreciative that he had joined a super scheme late. He was espousing his support for superannuation, that it had made his retirement far more comfortable than it would have been if he had been on the pension. He mentioned that a couple of his drinking mates down at the Wembley Hotel were surviving on pensions and that they were finding it very hard to afford the occasional beer. Senator Brown makes a good point about that; it is an issue we ought to focus much more on.
His point about the CPI increases is also right. I have had no end of representations from pensioners about the basket of goods which is used to calculate the changes in pensions—that things like cheap imported electrical goods are in the basket and that the price of plasma TVs coming down subdues the total value of the CPI index. They quite rightly say to me, ‘I’m flat out paying for my groceries, without buying plasma TVs, and I’m still operating on the old black-and-white we’ve had since 1963.’ Those are legitimate arguments, and the parliament ought to have more debate about them and focus on the conditions that so many tens of thousands of pensioners live in in this country. It is right to focus on that. I know that inside the Labor Party we have focused on those issues and on how we can afford to improve the lot of pensioners. So that part of the debate is right, but linking the issues to try to say, ‘If we stop the pollies getting a pay rise, somehow this is going to favour pensioners,’—it is easy politics. It gets you a headline and you get a run in the paper, but you do not do anything to improve public policy in this country. In the end you do not do anything to assist the pensioners. It is unhelpful and, quite frankly, it does not do the reputation of politicians and the political process any good.
As I said, it is easier to do the stunt, but there are serious issues at stake. I know it is harder for Senator Brown and the Greens to get noticed in the current climate. The focus on the prime ministerial race between Mr Rudd and Mr Howard is consuming a lot of oxygen in the political debate. The reality of the Senate becoming less relevant since the balance of power changed and our inability to get any focus on the role of the Senate and the accountability mechanisms must make it much harder for minor parties. That might be difficult, but I do not think pulling stunts like this is the answer to those pressures. I am sure the Greens and the Democrats and Family First are finding this. The parliament ought to reiterate its support for salary and conditions being set by an independent Remuneration Tribunal. We ought to, as much as possible, move down that path in relation to most politicians’ and parliamentarians’ conditions. The government’s move on the postage and printing allowances was a classic sign of why we should not be put in charge of our own conditions. Proper decision-making process was corrupted by the political panic of the government to try to ensure their incumbents had the best opportunity to be re-elected. That is not the proper basis on which you decide postage or printing allowances for parliamentarians.
Labor will be opposing Senator Brown’s disallowance motion. The decision of the Remuneration Tribunal, whether one agrees with the quantum or not, has been determined by the appropriate body, not by parliamentarians seeking to set their own wages, and we ought to accept that that process serves our democracy much better than this attempt to pick and choose on which occasions and under which conditions we accept or reject it. It is not a sustainable process, and I do not think it is in the interests of confidence in the political system more generally.
In most years, Senator Bob Brown seeks to run this sort of argument after a Remuneration Tribunal review. We have come to expect this rhetoric and shallow grandstanding from Senator Brown. As the Leader of the Opposition in the Senate indicated, it is about Senator Brown getting publicity and attempting to stay at the forefront of people’s minds. It is a bit shallow, really. Since 1999, the base parliamentary salary for all senators and members has been linked by regulation to a salary determined by the Remuneration Tribunal, an independent statutory body that determines remuneration and related matters for key Australian government officers, not just parliamentarians. As a result of this legislative link, the base salary is adjusted automatically in line with the relevant Remuneration Tribunal decision, usually on 1 July each year.
The salary for members of parliament has been set at the A level, which happens to be the lowest level of the principal executive officer salary band. Obviously, being a parliamentarian is not about the money. To the best of my knowledge and understanding, nobody aspires to parliament because ‘the money is so good’; they do it for other reasons. As I said, level A is the lowest level of the principal executive officer salary band—and this is the salary band for senior public servants. The new base salary will be $127,060. The pay rise comprises two elements: firstly, an increase of 2.5 per cent as a result of the restructure of the principal executive officer salary band outlined in determination 2007/04; and a further increase of 4.2 per cent as a result of the annual remuneration adjustment outlined in determination 2007/08. The first component is a catch-up clause which reflects a disparity between the benchmark and actual wage movements in the senior ranks of the Public Service. The second component is the annual review of salary.
In undertaking its annual review and deciding on appropriate adjustments, the Remuneration Tribunal takes into account a range of factors—none of which are the views of parliamentarians! More seriously, I am advised that, if this disallowance motion were to be passed today, it would have a flow-on effect to all public servants at the principal executive officer salary band. This would deny a wage increase to the following people: the General Manager of Aboriginal Hostels Ltd; the General Manager of the Aged Care Standards and Accreditation Agency; the Managing Director of the Australian Broadcasting Corporation; the General Manager of the Australia Council for the Arts; the Chief Executive Officer of the Australian Film Commission; the Director of the Australian Film, Television and Radio School; the Principal of the Australian Institute of Aboriginal and Torres Strait Islander Studies; the Director of the Australian Institute of Marine Science; the Chief Executive Officer of Cancer Australia; the Chief Executive of the Commonwealth Scientific and Industrial Research Organisation; the Director of the Equal Opportunity for Women in the Workplace Agency; the Chair of the Great Barrier Reef Marine Park Authority; the General Manager of Indigenous Business Australia; the General Manager of the Indigenous Land Corporation; the Director-General of the National Library of Australia; the Director of National Parks Australia; the Renewable Energy Regulator; the Managing Director of the Special Broadcasting Service; and the General Manager of the Torres Strait Regional Authority—to name but a few. Obviously, the government will oppose this motion.
I rise to speak on Senator Bob Brown’s disallowance motion because I want to put my personal views on record. This motion, if successful, would disallow the 4.2 per cent increase that applied to members’ and senators’ salaries from 1 July this year. I note that this motion no longer disallows determination 2007/04, which allows for the 2.5 per cent increase—and, of course, these two determinations are usually considered together as annual adjustments to wages. I understand Senator Brown’s position and the intent of his motion. Like Senator Evans, I too feel very strongly and passionately about the issues to which Senator Brown referred, particularly in relation to pensioners and the inadequacy of pensions in this country. But I want to place on record that I am unhappy about the precedent set by this disallowance motion.
By pursuing this motion, Senator Brown, as he would appreciate, places his parliamentary colleagues in a unique but awkward position. He is essentially demanding that we take responsibility for determining our own salaries when, at the same time, we are directly responsible to the Australian people. Avoiding this situation is the very reason why we have our salaries set by the independent Remuneration Tribunal. The Remuneration Tribunal is empowered under the Remuneration Tribunal Act 1973 to inquire into the salary of public officials, and it is standard practice for it to do so every year. In doing so, the tribunal considers a range of economic indicators, including the wage cost index; salary outcomes in the public sector and, to a lesser degree, the private sector; and the principles of wage determination and decisions of the Australian Industrial Relations Commission. Senator Brown implied in his remarks that it is a bad thing that politicians are not consulted in that process, while Senator Johnston implied in his remarks that it is a good thing that politicians are not referred to in that process. Obviously, we all have different views on what matters should be considered and what should be taken into account, but, again, it should be done in an independent way.
As Senator Johnston and Senator Evans have both pointed out, if successful this motion would have an impact on salaries other than ours. It would alter the salaries of some state and territory politicians and a large number of Commonwealth public positions, some of which were referred to by Senator Johnston, including the director of the Australian Institute of Marine Science, the CEO of the Australian Film Commission, the CEO of Cancer Australia, the chair of the Great Barrier Reef Marine Park Authority and the General Manager of the National Blood Authority, to name a few. More than 90 non-elected official positions are also covered by this determination, and I am not comfortable with the fact that this motion affects their pay; therefore, I am not comfortable with voting for this motion. I also understand that there is an argument for some salary adjustment for some of those post 2004 politicians, but it is not my role to determine that.
I believe and I am happy to put on record that this determination, especially when combined with determination 2007/04, rounds out, Senator Brown, to an annual increase of 6.8 per cent. I know that we keep doing the math and it is 6.7 per cent, but I have been told that when you round it up it is about 6.8 per cent. I believe it is excessive; I believe it is too much, especially when you look at inflation at 2.1 per cent for 2006-07, so I am in a quandary. But I want to point out to the chamber that my decision today is not to support this motion. I do not think it is my role; I do not think it is our role. I think we should be kept from decisions about the raising or lowering of our own salaries. I have made a personal choice: I am happy to pledge, and have done so, the above CPI increase in my salary to charity. I am comfortable with that, but it is my personal choice. I am not going to make a choice on behalf of the rest of my colleagues in this place or, more importantly, some of those public officials whose salaries are affected by the motion today.
Through you, Mr Acting Deputy President, I hope Senator Brown understands my position. It may be an increase that some consider warranted. I have made a personal decision, but I am not going to get into a debate today as to whether or not I as a politician should be responsible for determining other politicians’ salaries.
I will also not be voting for this disallowance motion for the reasons that have already been well expressed today, but there are a couple of other points that I want to add. It would be easy to vote for this motion of disallowance because it is not going to get up—so we know there would be no harm done—but I agree that it is the tribunal which makes these determinations. Perhaps we should have made a submission to the tribunal saying, ‘Please do not bring down an increase which is higher than community standards and which is higher than CPI,’ because, for some reason, that is why they did it. I understand that the combined superannuation and salary increase has come to represent a grossly enlarged increase on CPI.
This leads me to another point that needs to be made today: we are dealing with an increase which is about the unequal treatment of senators and members in this place. It stems from the decision made a couple of years ago to change the superannuation entitlements for people who were coming into this place. That is, we were making decisions—and a lot of us objected very strongly and voted against the changes for this reason—for those who came after us, and so we have a mix at the present time of people who are entitled to generous superannuation pensions and entitlements and those who are in an accumulation scheme with far less generous entitlements. I can only assume that part of the reason for the Remuneration Tribunal’s decision is to make up for that disparity.
Of course, it does not make up for the disparity; it just increases the entitlements of those who were here prior to the decision being made. It is salutary that this should not occur again. In other words, if a decision is made about entitlements like superannuation in this place, it ought to apply to everyone, not just to the chosen few who happen to be here to make the decision. I see this as a probable reason for the difference between the increase and what the community can rightly expect. Like others, I think we have to leave these decision to the Remuneration Tribunal. I am reminded that perhaps next time round we need to make a submission to the tribunal and say, ‘Please do not increase our salary beyond what is reasonable in terms of community expectations.’
I thank those who have contributed to this debate and I beg to disagree. The motion as I have put it from the Greens would see that MPs got a 2.5 per cent increase, not the 6.7 per cent. The Fair Pay Commission just a few weeks ago determined that Australian workers get a two per cent increase. The Greens are saying: let that be an indication that MPs should get the same. We have put this to the Senate, and it appears that all parties are rejecting it. We do not. What is more, the Remuneration Tribunal does not give reasons and it has not given reasons. We cannot debate reasons that are not given. There is no justification for this pay rise. I submit and put here again that the Remuneration Tribunal, which is appointed by the government, is a politically charged organisation which is not able to make a dispassionate assessment, and we would not be in this position were it able to.
If it is good enough for workers in this country to have their pay increases determined by the Fair Pay Commission set up by Mr Howard, the Prime Minister, and the government, then it is good enough for members of parliament to have our pay increase set by the Fair Pay Commission as well. It should be two per cent; it should not be seven per cent. We should not be sailing 85 per cent above the consumer price index while pensioners languish with no increase at all. I thank members for their point of view. I reject it; it is not logical; it does not stand up to scrutiny. We are doing the right thing here and we stand by this disallowance motion, which would make our pay increases the same as those for the rest of the Australian community.
That the motion (Senator Bob Brown’s) be agreed to.