Payrise for politicians

By Gemma Jones

Australians have never judged their prime ministers by pay packets drawn in previous employment. If they had, Federation would have gone very differently.

The nation’s first prime minister, Edmund Barton, entered Australian parliament in NSW, where MPs went without salary in the 1870s and 1880s. Billy Hughes, meanwhile, was the son of a Welsh carpenter who found himself living in poverty after two years spent doing odd jobs as a new Australian migrant in the 1880s.

He settled in Balmain as a small business owner when the suburb was struggle town and a world away from the millionaires’ row of today.

Ben Chifley was a Bathurst train driver and James Scullin was initially a greengrocer.

Even today, if someone in those occupations became an MP and was elected prime minister, his or her pay packet would balloon overnight.

Running Australia attracts pay of $351,000 a year, eclipsing UK Prime Minister David Cameron’s $220,000 salary. The figure is just shy of President Barack Obama’s $390,000 wage.

But those comparisons are about to be rewritten, spelling an end to when MPs’ salaries paled in relation to corporate fat cats and even heads of government departments, some of whom earned more than twice the PM’s wage.

The authors are three corporate high-flyers appointed by the government to the Remuneration Tribunal.

In May, John Conde, John Prescott and Jillian Segal were given unprecedented responsibility for setting MPs’ wages.

Earlier this week, a spokeswoman for the tribunal said no one would participate in interviews about the development, but comments in annual reports offer some insight into the inclination to lift MPs’ salaries.

“The tribunal has, for some time, been of the view that the remuneration of parliamentarians, especially ministers, is less than it should be,” Conde wrote in the 2009-10 annual report.

Between them, Conde, Prescott and Segal would have earned millions in their careers, and their current roles and appointments are listed on the tribunal website.

Conde is chairman of Energy Australia, now Ausgrid, the health insurer Bupa, Whitehaven Coal Ltd, the Sydney Symphony and Events NSW, and he also holds numerous other positions.

Prescott is chairman of QR National Limited and a director of Newmount Mining Corporation. He is also a former managing director and CEO of BHP. Segal is a director of the NAB, ASX Limited, the Garvan Institute for Medical Research and is deputy chancellor of NSW University.

Their newly acquired autonomy on the Remuneration Tribunal has the backing of parliament. Where previously tribunal members acted as advisers to government, Labor and Coalition MPs voted unanimously to hand complete control to the trio.

The results have already been extraordinary.

This week it was revealed redundancy packages of $70,455 would be given to MPs who lost their jobs, up from $35,000, which the tribunal labelled “inadequate”.

Last month the Tax Commissioner, Defence Force chief and Auditor-General were given salary boosts of $300,000 a year.

A restructure of MPs’ pay is likely to see lowly backbenchers pocket $250,000 — up from $140,000, with much of the increase to be the result of rolling existing entitlements into the base wage for better transparency.

Former NSW Independent Ted Mack has slammed the tribunal’s recent decisions, claiming increasing MPs wages will lead to corporate animals turning political contests into expensive US-style campaigns which, had they been held in the past, would have seen many of our past PMs eliminated well before they reached office.

“What a joke,” he says. “The Remuneration Tribunal is there to make sure the salaries keep rising. Why should (MPs) be paid more money? Tell me any other job that requires no experience and no qualifications, that has pay well and truly over $200,000 a year?”

“A reasonable wage would be tied to the average wage.”

Mack himself is entitled to a $70,000-a-year pension for life for serving 13 years, but he has foregone the entitlement and instead takes part of an aged pension, as well as living on money from his investments.

But some, like Nationals Senator Barnaby Joyce, argue that high salaries are the way to attract new MPs.

“My view is if you’re paying $1 million to the coach of the St George rugby league side, and you pay that because you want them to win the grand final, being the prime minister of Australia is more important,” he says.