Thursday, 14 May 2009
Remuneration Tribunal Determination
Motion for Disallowance
That Part 3 (clauses 3.1 to 3.3) of Determination 2009/04: Remuneration and Allowances for Holders of Public Office; and Members of Parliament – Entitlements and Office Holders Additional Salary, made pursuant to subsections 7(1), 7(3) and 7(4) of the Remuneration Tribunal Act 1973, be disapproved.
This motion is to disallow the regulation by which the members of parliament would get an extra $4,900 a year, or $90 a week, in electorate allowance. As all members of the chamber are aware, that allowance is to enable us to extend our services to our electorates. However, there is no mandating of that and it may be that members who do not spend the money on the electorate are able to use it as personal income; in which case, of course, it is taxable income. The problem with this decision by the Remuneration Tribunal is that it has apparently been taken in the absence of recognition by the tribunal—which is quite extraordinary in itself—that we are in a recession. There has been no increase in this allocation in real terms since 2002, and throughout all the boom years since then the Remuneration Tribunal made no decision to increase the amount. But it waits until we are in the middle of the worst recession, arguably, since the Great Depression and announces that members of parliament should be getting an extra $4,900 a year in electorate allowances. It is simply up to us to rectify that and we should be rejecting this proposal.
The budget that was announced the night before last had in it an increase for single pensioners of $32.49 a week, which they have been waiting for since 1993. I think it is untoward and unacceptable that we members of parliament should be getting three times that amount without any of the difficulties that pensioners find themselves in. In fact, for pensioner couples the increase is $10 a week, but MPs would be effectively getting $90 a week.
The Prime Minister had the wisdom last year to turn down the Remuneration Tribunal’s recommendation that members of parliament get quite a hike in the base salary that we receive. That was generally given a good reception—at least outside parliament. If this rise goes into the purses and wallets of MPs, it will be seen simply as a backdoor way of receiving that increase, and it has been seen in that way. I think that we have to be able to show the electorate that MPs are capable of some belt-tightening at a time when people are hurting. Hundreds of thousands of Australians are losing their jobs altogether or are having their small businesses closed down, and they are finding times very difficult indeed.
I think that the electorate at large would welcome MPs applying some restraint until this recession is over. Therefore, the Greens have decided to move for disallowance of a recommendation that, in my view, would never have come from the Remuneration Tribunal if it were living in the real world, if it had its eye on where society is and the relevant position of MPs, and, indeed, if it had any nous at all about the economic circumstances of this nation. Apparently, the three independent members of the Remuneration Tribunal live in some isolated world where news of economic events, if not other events, does not get to them. They should have taken into account the circumstances in which all Australians find themselves in a recession, and they should have made sure that their decision on this matter was commensurate with the existing circumstances in society. This rise is not commensurate with existing circumstances, and we should have the good sense that the Remuneration Tribunal did not have and reject the recommendation that electoral allowances increase by $4,900 a year. I commend this disallowance motion to the Senate.
I rise to commend Senator Brown for this motion and indicate my support for it. Senator Bob Brown is right. It is never a good time, in the public’s eyes, for an increase in the remuneration for politicians; but this is a particularly bad time, given the economic circumstances. I think it begs some broader questions about the structure and role of the Remuneration Tribunal and whether there ought to be a greater degree of transparency and accountability with respect to it. I think it is important for this to be considered as part of a broader reform, and I for one join with Senator Brown and the Greens in opposing this rise.
During my time in state parliament a survey was undertaken, which I participated in—not all members participated in it—from the state equivalent of the Remuneration Tribunal. It asked what MPs spent their electoral allowances on. I was more than happy to participate in that, and I could demonstrate back then that I spent more than my electoral allowance on matters that were properly the subject of an electoral allowance. I think that is something that should be looked at by the Remuneration Tribunal or any new body in the future. I do not think it is unreasonable for the public to expect a degree of transparency and accountability in relation to this, and I agree with Senator Brown that there is a criticism that the Remuneration Tribunal just does not live in the real world in the context of this decision. I have said, and Senator Brown has said, that this could be seen as a backdoor pay rise, because there is no obligation to spend this money for electoral allowance purposes. That is one of the flaws.
If the structure of the allowance were different, then maybe there could be different arguments in relation to it. But, having said that, my plea is that there ought to be broad bipartisan reform of the whole system of politicians’ remuneration so that there can be some community input. I think it would stand us in good stead in terms of our reputation as politicians if it were broadened out. Right now I do not think there is that level of public trust and confidence in the system. I think that the Remuneration Tribunal moves in mysterious ways, and I think that it adds to the cynicism that the public feel towards their elected representatives. I think we can do a lot to fix that, and supporting this motion is one small step. I am looking forward to further substantive reform in relation to the whole issue of politicians’ remuneration and entitlements, how they are determined and the level of community input.
Family First support this motion to disapprove part 3 of the Remuneration Tribunal’s determination 2009/04. At the heart of this is that we have the Rudd government telling us that we need to tighten our belts and that everybody has got to do their bit. We heard that same mantra being espoused in the budget that has recently come through. But how does having an increase to the electoral allowance mean that pollies are tightening their belts? How does that go hand in hand? How could anyone in this chamber not support this motion? We are calling on Australians to do their bit, to pull in their belts a bit, and telling them we are all going to do our bit and do our part, but here we have pollies doing the reverse. They are expanding their benefits. This is sending all of the wrong signals to the Australian public. At a time when times are tough, increasing the electoral allowance does not make sense.
The Remuneration Tribunal has a job—it makes recommendations for parliamentarians to approve or disapprove—so let us not hide behind the fact that it is an independent body. It is, and it has done what we have asked it to do—that is, to make a recommendation. But it is up to the politicians in this chamber today to use their conscience, to look the Australian public in the eye and honestly ask themselves if they can sleep at night knowing that if they do not support this disallowance motion today then they are telling the Australian public that it is okay for us to spend more. We are asking the community to do their bit, but politicians are exempt.
If you look at the budget that was put forward on Tuesday night, the only people the budget did not have an impact on were pollies. The Department of the Prime Minister and Cabinet has 60 more staff, $13 million more a year, but the poor couple pensioners are doing it tough. I appeal to both sides of the chamber to think about this. Should politicians expand their electoral allowances at this point in time? We would not hide behind the argument that it has not increased for many years. That arguement can be put aside given that we are asking Australians to pull their belts in and do their bit while politicians get away with nearly murder in this regard. You cannot, if you are genuine, allow this increase to go through. I appeal to both sides of the chamber today to rethink what they are going to do on this vote. This is a very important vote. This is a telling time as to whether pollies are going to pull their own belts in and not have them expand.
The electoral allowance is all well and good, and the argument that it has not been increased for a number of years is a decent argument. But these are tough times, and as Kevin Rudd pulls the lever of the GFC—it reminds me of a bucket of KFC; every time you have a problem, it is the GFC. And here is an example: the global financial crisis means you should not be making an increase to the electoral allowance and today you should ensure that increase is not taken by politicians. I appeal to both sides of the chamber to support this motion here before us.
The government does recognise that the issue of parliamentarians’ allowances does get raised in the community. It is a strong position that has been recognised in this chamber over a long period of time—that is, that people, particularly in this chamber, should not be setting their own pay and conditions. It is recognised that there is a perennial argument about what politicians should be paid. It does get raised by both sides of the chamber and gy the minor parties and the community. In acknowledging that debate, it is a sensible proposition to say that there is and should be an independent system that operates, which sets up a system whereby decisions are made by an independent tribunal. It is a sensible position. The alternative would be that individuals themselves might set up pay and conditions, and that would lessen the position that we are in now.
This is a proposition that seeks to disallow a Remuneration Tribunal decision. The government does not support that position. The Remuneration Tribunal is an independent statutory authority and its remuneration decisions are made accordingly. The electoral allowance for federal parliamentarians has not been increased since January 2000. The Remuneration Tribunal recently completed a review of the electoral allowance for federal parliamentarians. This is the first time that a review of the electoral allowance has been conducted since late 2002. As a result of the 2009 review, the Remuneration Tribunal decided to increase the allowance by 17 per cent to approximately $32,000 per year. This increase is outlined in the determination 2009/04.
On behalf of the government, I would like to take this opportunity to assure the chamber that the purpose of this allowance is to reimburse members of parliament for costs necessarily incurred in providing services to their constituents. I recognise that Senator Bob Brown raised the issue that went to base salaries—that is, the base salaries of federal politicians are determined by the Prime Minister, who decided that they would be frozen for the 2008-09 financial year. In determining the base salary of federal parliamentarians, the Prime Minister does take the advice of the Remuneration Tribunal. The Prime Minister decided to freeze the base salaries of federal parliamentarians at $127,000 for the 2008-09 financial year.
In contrast to base salary determinations, subsections 7(1), 7(2) and 7(4) of the Remuneration Tribunal Act 1973 provide the Remuneration Tribunal with the power to determine a range of entitlements and allowances for senators and members of the federal parliament. The major allowances determined by the tribunal include travel allowances, travel allowance rates and travel related provisions, the electoral allowance, the qualifying period for a life gold pass, severance travel and certain other office facilities.
As senators in this chamber will know, all Remuneration Tribunal determinations are disallowable by the parliament. In handing down its decision on electoral allowances, the Remuneration Tribunal made a statement about the nature of the electoral allowance. For the information of the Senate I might go to the content of that statement:
Federal parliamentarians (both Senators and Members of the House of Representatives) have been in receipt of an electorate allowance since 1952.
The purpose of the allowance is to provide funding to members to cover a range of expenses involved in servicing their electorates. The allowance comprises a base amount plus supplementary amounts for those Members whose electorates exceed 2000 square kilometres in size. At the end of each financial year any part of the allowance which is not expended on genuine electorate expenses to the satisfaction of the Australian Tax Office is regarded as personal income and taxed accordingly. Rates of similar allowances available to members of parliaments and assemblies around Australia vary widely.
The allowance enables members to make modest provision for expenditure at their discretion to address differing needs in their respective electorates. Previous reviews have noted that members spend the allowance in widely varying ways in servicing their electorates.
The Remuneration Tribunal determines the amount of the allowance. There is no automatic mechanism for adjusting it each year and the Tribunal has not varied the amount since January 2000. The Consumer Price Index has since increased by more than 30 per cent; that is, more than 3 per cent annually.
The tribunal has taken into account the costs to members of meeting the commitments to which their allowances are directed and has recognised that they have increased over the same period. Accordingly the tribunal made a decision to lift the base allowance to take into account the diminution of that amount for that period.
It is long established that the independence of the tribunal and its decision making in these areas should be recognised. I think the alternative is something that the government would consider—that is, politicians setting pay and conditions themselves. In this instance I recognise Senator Brown’s concern and the concern that is raised in the community about these matters. However, the use of a disallowance motion is recognised as quite a blunt instrument in this instance. I note the comments made by Senator Xenophon about transparency. The Remuneration Tribunal is a statutory office, it is transparent and is able to provide information upon request to any senator or member who wishes to seek further information. Of course in this instance the tribunal, as I have said, has come to an independent decision in respect of allowances.
Sometimes with these types of debates it is tempting to question what is principle and what is politics. Putting that to one side, there is actually a principle at stake in relation to this whole issue. The principle is—and this is the issue that the opposition has with this disallowance motion—do politicians determine their own salaries and other add-ons or do we rely on an independent umpire? By the context of this motion it might be seen that we will take over from the independent umpire. But what happens in this place in 12 months, five years or 10 years time when the nature of the place might change? We might have a group of MPs who are actually desperate to determine far higher terms of engagement for themselves.
So, if you are serious about the principle, the principle must be that we are not the ones who are best placed to determine our own terms and conditions. In fact I think it is an outrageous notion that members of parliament should be determining their own terms and conditions. The opposition has made it very, very clear that the Remuneration Tribunal is an independent umpire who makes these decisions. Whether we like the outcomes or not, and whether some members of the community like them or do not like them, is not the issue. It is the principle of the fact that we should not be determining our own terms and conditions.
Quite frankly I think we owe it to the community for them to know that there is an independent umpire and that it is not politicians making determinations about their own terms and conditions. If anything, maybe the argument should be that we increase the independence of the Remuneration Tribunal so that there is a far bigger gap between us and the independent umpire. This debate today is about who makes the determinations. We disagree with Senator Brown that politicians are the ones who should be determining their own terms and conditions and we passionately believe that should remain the domain of an independent umpire.
I thank senators for their contribution. The argument from both the government and the opposition falls flat when we remember that just last year the Prime Minister ruled out a pay increase recommended by the Remuneration Tribunal.
I do not know what that interjection means, but it did not help much. The fact is that the Prime Minister overruled the Remuneration Tribunal, and members in this place raised no debate about it. Now we have this extraordinary $4,900 recommendation coming from the tribunal and members are saying that we must not intervene on that because it is an independent tribunal.
I ask this: is there any member present who was consulted about this increase, about the burden of electorate costs on us? If you ask me, the Remuneration Tribunal is working out of thin air. I do not know how they came to their deliberation, I do not know where the inquiry was, I do not know who was called before them and I certainly do not know who made the reference. Why on earth would a tribunal wait through eight good years and make no recommendation on increasing the electorate allowance and then, in the middle of a recession when everybody is pulling their belts in and hundreds of thousands of Australians are finding themselves with no job income at all, recommend that politicians get an extra $4,900, not to be necessarily directed to the electorate but to spend as they will? That is the other point here. It is to spend as politicians will, and some do not spend it on the electorate. I do not know; I think the Remuneration Tribunal itself needs looking at. I commend this disallowance motion to the Senate.
That the motion (Senator Bob Brown’s) be agreed to.