Peter Andren is the sole genuine independent in the federal House of Representatives. He has been making a nuisance of himself again. Not a nuisance in the eyes of most of the people of Australia, but rather a nuisance in the eyes of his fellow Members of parliament. Mr Andren has raised the ticklish question of the generosity of the superannuation scheme for federal parliamentarians. He quite rightly points out that it is far too generous, especially when compared to the superannuation entitlements of others in the community. He is also concerned that the salary and allowances of MPs should not be out of kilter with community standards.
As far as Mr Andren is concerned, there are three areas of concern. First, parliamentarians have access to superannuation funds immediately upon it leaving Parliament, irrespective of whether they have turned 55, the age at which others in the community have to attain before they are given access to their superannuation funds. Second, the amount of their superannuation benefits is far too high for the amount of contributions they put in and the length of service needed to qualify. Third, Mr Andren disputes claims by some of his fellow parliamentarians, including Prime Minister John Howard, that MPs are quite poorly paid compared with the private sector.
Mr Andren is certainly right on the first two points, and he has a fairly good argument on third.
Parliamentarians should not be allowed access to their superannuation until they are 55, just like everyone else. Superannuation gets very favourable tax benefits because it is supposed to provide for people when they are past working age – – which means at least past the age of 55. It justifiably irks people that younger MPs who lose their seat can draw on their superannuation, as a lump sum and/or periodic payment, while they pursue another career or business interests.
On the second point, 30 or 40 years ago there may have been an argument for more generous superannuation benefits for MPs. That was when MPs had comparatively far less secure jobs than others in the community. That can no longer be argued. Career paths and the job-for-life are things of the past. Most people have less, not more, security than MPs. At least MPs can be guaranteed tenure until the next election. With increasing casual work many people in the workforce have that no guarantee of work tomorrow. The argument about superannuation being a substitute for poor pay is equally shaky. Even if it were true, it would be better to increase the pay to attract better parliamentarians than it to have over-generous superannuation schemes which appear to reward the less successful parliamentarians who lose their seats at early.
Under present rules, it is possible for a parliamentarians to serve just eight years and be entitled to benefits which amount to a 69-per-cent-of-salary contribution by the employer. This does not amount to a reasonable provision for retirement; rather it represents an unjustified windfall for unsuccessful politicians.
On the question of pay, Mr Andren rightly points out that although the flat rate of a backbencher is not enormous, “there’s not a lot of things Members have to pay for, if you like, besides their own mortgage, if they happen to have one. In fact, their travel allowance can be used to purchase property in Canberra.” Mr Andren is right to point out that once one considers all the lurks and perks, MPs are well remunerated. Certainly, there is no shortage of people ready and willing (if not always able) to stand for election.
There is a clear case for greater transparency in the case of MPs’ pay and a case for bringing their superannuation more in line with community standards. Alas, on these issues there is so often a strange bipartisan view that only ever adds to MPs’ entitlements and never takes any away.