Do our pollies deserve their perks?

Leon Della Bosca

8 years ago

Australian politicians are already amongst the highest paid elected representatives in the world, but the perks they can claim on top of their extremely generous salaries border on scandalous.

As of 1 July 2014, the base salary for backbenchers is $195,130. According to the Parliamentary Superannuation Remuneration Tribunal, the average base salary for each Senator and Member of the House of Representatives is $199,040. Ministers receive $307,329, Cabinet Ministers $336,599, the PM’s salary is $507,338, the Deputy PM gets $400,016, whilst the Opposition Leader receives an annual salary of $360,990.

After multiple reports over the weekend of politicians double-dipping, specifically in regards to many MPs claiming a travel allowance of $273 per night whilst staying in tax-deductable second homes, the perks of being a politician have been put into the spotlight, with many claiming hundreds of thousands in entitlements on top of already generous remuneration.

Multimillion-dollar homes, chartered flights, travel allowances and golden handshakes – Aussie politicians are using, some may say abusing, taxpayer funds to the tune of millions of dollars each year.

How much does your local MP spend?

Expenditure claimed 1 January to 30 June 2015

And it’s happening on both sides of the political fence. Here’s a rundown of what our politicians currently claim.

On top of their generous pay packages, MPs receive an electorate allowance of between $32,000 and $46,000 per year to cover the costs incurred when performing official duties, but any unspent amount is treated as taxable income.

Travel allowance for official business ranges from $273 per night for Canberra stays, to $472 for stays in Perth. The PM can claim up to $564 per night for stays away from his home or government residences.

An official tax ruling allows ministers to claim up to $1000 per week as travel allowance, even if they stay in homes they own. On top of that, they receive deductions on all expenses for their second residence, for things such as electricity, insurance and property maintenance. Then, if they were to sell that property, it would be capital gains tax-free.

MPs receive unlimited business class domestic flights and a car with driver for official purposes. They can also claim their own private vehicle for both work and personal use if their electorate is 10,000 square km or larger. All overseas transport, accommodation, meals and associated travel costs with ministerial and official visits, delegations and study are also at the expense of the taxpayer.

Up to nine business class return trips to Canberra for the minister and their partner are covered, along with three trips for each child and three business class interstate trips for partners and children. Ministers on official business also receive unlimited travel for their partners.

A minister is allowed to keep gifts from industry and private benefactors, so long as they are not worth more than $300. Gifts valued at up to $750 are allowed to be kept so long as they are from a government source.

Up to $50,000 is allowed for office facilities with another $100,000 allowable for administration costs.

As far as superannuation goes, MPs who signed up prior to 2004 receive 11.5 per cent of their salary paid into super (for up to 18 years), then 5.75 per cent after. Add to that the ‘golden handshake lump-sum payments and generous pensions based on years of service. Any politician who joined after 2004 receives 15.4 per cent of their salary paid into super for 18 years.

Once an MP who joined Parliament before 2012 retires, they receive a Life Gold Pass for unlimited travel within Australia. Those who joined after 2012 receive severance travel allowances for up to 10 trips per year.

MPs who retire involuntarily get a resettlement allowance of three months’ salary plus another three months if they served for more than a full term in government.

And former PMs receive a multitude of allowances at the discretion of the current PM.

Over the weekend, Labor made the call to re-examine the section of the tax office ruling that deals with second residences, to bring it in line with “community standards”. It’s possible that this week’s criticism of political entitlements across the board may result in a broader enquiry.

**Opinion: Time pollies lived within their means**

The first question to ask is, “do our politicians receive too much for achieving very little?”

It may sound sceptical, nay cynical, but in the real world remuneration is supposed to be based on performance. With that in mind, the fact that our politicians are already the recipients of incredibly generous rates of pay and are able to claim so many perks on top seems almost preposterous to me.

Sure, one could argue that these entitlements are part of the cost of running the country, and many of them are, but isn’t it fair for us to ask if there is scope for reducing some of these perks instead of cutting the essential services of hard-working Australians? After all, we’re the ones who pay their wages.

The most obvious one to go after is the travel allowance double-dipping but, after reading about all the added bonuses that come along with being an Aussie politician, it seems that there could be more fat to cut from the budget.

For example, at the time of writing, a QANTAS domestic flight to Canberra can cost as little as $115 from Sydney and up to $365 from Darwin. Business class flights, on the other hand, cost $619 from Sydney, $769 from Melbourne or $1970 from Perth. A flight from Perth to Canberra takes just under four hours.

We can all do the maths, but the question remains, is it necessary for pollies to travel business class for a maximum four-hour trip? Especially when we, the Aussie taxpayer, are faced with increased health care costs, cuts to essential services, caps on super, increased cost of goods and other services? Most Australians will never sit in business class, many cannot even afford the cost of a flight to, well, anywhere. And do we need to remind our politicians that 2.5 million Australians live in poverty?

The Government preaching that we should all “live within our means” and that the “age of entitlement is over” seems rather hypocritical. Isn’t it time our politicians put our money where their mouths are?

There is an old Jewish saying of which I was recently made aware and that I’m sure many of you will have heard before: “The fish rots from the head down.” I think it’s relevant in this case.

If the Government is asking us to tighten our belts and live within our means, then it best start doing it themselves. Why should we struggle through each day when our nation’s leaders are receiving an average wage of just under $200,000 and claiming untold entitlements on top? And no one party is exempt from this criticism either.

Sure, Labor is making waves about travel allowances, but its own ministers are just as guilty of abusing this privilege as those of the Coalition. Pot calling the kettle black, anyone?

I could go on about this all day, but I’m more interested in what you have to say about the matter. Do you think these entitlements are fair? Should we have to foot such an exorbitant bill for our politicians to do a mediocre job of running our country? Should they lead by example and start living within their means? If they did, would that influence your vote in Election 2016? Should their remuneration be performance based (i.e. tied to key performance indicators such as GDP, unemployment, terms of trade, etc)?