Breaking news – MPs $40,000 payrise

Today’s news revealed that Federal MPs are set for substantial pay rise in the foreseeable future. The timing is unfortunate, coming just two days after spending cuts, such as slashing the baby bonus and reducing public service spending, were announced. But the Remuneration Tribunal has been working on this pay rise issue for more than six months.

The Remuneration Tribunal is an independent body which decides the salaries of MPs and senior public servants, based on enquiries into the type and amount of work undertaken by people in these positions. It has determined that MP salaries should increase by at least $40,000 per year. Prime Minister Julia Gillard currently receives $366,000 per year, but her pay could go up as high as $450,000. Opposition Leader Tony Abbot’s pay packet could rise from $259,000 to $333,000, and even the salary of the most junior parliamentarians will jump from $140,000 to $180,000 per year.

It sounds like a lot, but Phillip Hudson made an interesting point in his opinion piece in the Sydney Morning Herald today. He explained that while the MPs were looking at a pay rise, they were also having other perks cut to even it out. The biggest one of those is the Gold Pass, which gives retired politicians almost unlimited taxpayer-funded flights, and which last year cost taxpayers about $2.6 million. He suggested that these pay rises were actually a way to provide some transparency in how much our politicians are really getting, instead of keeping their pay packets low and slipping them perks under the table. To read the full opinion piece visit the Herald Sun website.

Rachel says
I personally think that $450,000 per year sounds like a lot, but then I’m not on call 24/7 to run the country, and if I were then maybe that would seem like a fair exchange. When you consider that we pay the Australian Cricket Captain three times more than our Prime Minister, before he receives any sponsorship, the AFL CEO five times more, and that some CEOs in the private sector earn in the tens of millions of dollars every year, I think that a $40,000 payrise for a few politicians isn’t so bad. And it does make me wonder – why are we paying these other people so much? How many more jobs could we create if CEOs gave up even a quarter of what they earn?

Comment
What do you think? Do you agree with Rachel that the CEOs should take a hit, but not the MPs? Or is she wrong on this point?