05/06/2012

Parliamentary Salaries and Superannuation Amendment (Salary Restraint) Bill 2012

Mr BARBER (Northern Metropolitan) -- Mr Pakula will not be surprised to know that I disagree with him on this point. The government, in going down this road, has also been agnostic -- or at least, let us say, somewhat mysterious -- about how exactly it intends to implement its alternative model for setting politicians' pay. There is a press release from the Premier dated Wednesday, 2 May, which leaves open a number of questions.

What is clear, though, from reading the bill is that this bill defers for the whole of the coming financial year the 25 per cent pay rise, or the $40 000-odd pay rise, that federal MPs have obtained for themselves.

When bills like this come before the Parliament they have not always been structured in the exact format that this one is. If the Premier had wanted to permanently forgo the pay rise that has been offered to federal MPs, as former Premier Steve Bracks did early in the last Parliament, then he would have done it through a different mechanism, which -- --

The PRESIDENT -- Order! I have paid close attention to this legislation, and I have just apprised myself again of the second-reading speech. I am of the belief that this is a very narrow bill. It has four clauses, and the second-reading speech is not too many more paragraphs.

I note that the second-reading speech says that new legislation will be required in due course to canvass matters beyond what is the capping of a 2.5 per cent pay rise on this occasion, so I think this is a very narrow debate. I would encourage Mr Barber to speak to the legislation and in the confines of what I believe the second-reading speech has laid down and what I think Mr Pakula has remained with. Speculation about what might happen in the future is part of a future debate which is in fact outlined in the second-reading speech where the minister has clearly indicated that new legislation will be required in due course to canvass other matters.

Mr BARBER -- Thank you for that guidance, President, and I will certainly do my best to work within the guidance you have given me. In his contribution, though, Mr Pakula said he believes there will never be a rational, dispassionate, evidence-based analysis of what a parliamentarian is worth.

In fact one has already been done by the federal Remuneration Tribunal in which, without exaggerating, hundreds of pages lay out the case it uses to ultimately determine what it thought was an appropriate pay rise for federal MPs. It is all there if you want to read the argument, and this bill is only being brought before this house because our salaries have traditionally been linked to those of federal MPs.

Not looking forward but in fact looking back, there have been three such bills during my time in this Parliament. The first of those, introduced by former Premier Bracks, permanently broke the link between federal and state MPs in relation to one particular pay rise, and it is still preserved in the principal act that we are amending under the definition section. The Parliamentary Salaries and Superannuation Act 1968 states that:
  basic salary means the amount of the annual allowance by way of salary from time to time payable to Members of the House of Representatives under the law of the commonwealth less $5733.

When Mr Bracks, in the first of those bills that I referred to, wanted to cut the linkage between us and the federal pay rise, he did it by adjusting that amount of $5733. Since then we have had two more bills, including this one today, which uses a different mechanism. It says that, notwithstanding any other effects of federal pay rises and so forth, the pay increase for this financial year will be 2.5 per cent. The effect of that is that every year we will have to come back here and pass another bill -- otherwise we will at the end of the expiry of this period get a $40 000 pay rise.

Hon. M. P. Pakula interjected.

Mr BARBER -- Mr Pakula interjects with the comment, 'Not unless we bring in a new system'. The President has advised me not to speculate on what that new system is. I am simply making the point that, short of the approach they took in the federal Parliament of a Remuneration Tribunal, which is the reason we are debating this bill, there is no other system. I disagree with Mr Pakula's contention that politicians should not vote for their own pay rises. In fact at the federal level my party took the opposite view that politicians should vote for their own pay rises because that is how the public can hold them accountable.

The Premier's press release announcing this bill, by the way, said -- and this may not be in the second-reading speech, but it was in the press release that the Premier put out in announcing this bill -- that the Gillard government has decided that a significant pay rise will be awarded to federal MPs. The independent Remuneration Tribunal set up by the Labor and Liberal parties and The Nationals through their vote in the federal Parliament, which broke out -- --

Hon. M. P. Pakula interjected.

Mr BARBER -- It is not a matter of holiness or purity; it is a matter of political differences and how we voted, on the record, in the federal Parliament. My then party leader, Bob Brown, made some good arguments when he said, 'We vote for the budget, we vote for the pensions of other people and we vote for pay rises for everybody else on pensions and benefits'.

Here in Victoria when we vote for the budget, we vote for concessions and other forms of income support, so why not take responsibility for our own pay rises?

It could be, I suppose, that Mr Pakula likes the idea of centralised wage fixing through a tribunal. He might want to take us all the way back to the Harvester judgement, where they simply sat down and said, 'What is a fair increase?', but currently that is not on offer to many other classes of worker in Australia. Most of them have to go out and fight and march up and down the streets. They certainly routinely have to offer up productivity improvements. If we were in that situation, I have no doubt that MPs would be able to proffer many productivity improvements, even with respect to the rate at which legislation moves through this chamber. We could quite possibly get a 2.5 per cent pay rise and a 400 per cent productivity gain put on the table, and then maybe the $40 000 pay rise would be justified.

It is quite okay for Mr Pakula and I to have a different point of view even though we might, from some perspectives, agree that fair is fair. We are really only disputing what is the mechanism to decide what is fair, but we agree that fair is fair. We just have to be clear about what it is that we are voting for. We are voting for a deferral for 12 months of a $40 000 pay rise on the Premier's promise that he will come up with a new mechanism. I am not speculating on that mechanism because the President asked me not to, but the only leading example is the federal Parliament. We saw how that worked, and that is the bill that is before us as per the two previous versions which I have contrasted with the more, in my view, transparent approach that Mr Bracks took in my first year, I think it was, in Parliament, whereby he removed the need for politicians to regularly vote to not have a pay rise, which is what Mr Pakula said. He said he hopes he never has to vote on another one. An alternative mechanism is available that means he certainly would not have had to vote against this $40 000 pay rise ever again.

As it is, Mr Pakula may very well find himself here in 12 months doing the exact same thing all over again.

I have put forward what I think my solution to that is. The Labor and Liberal parties are tonight again in a different position whereby they seemingly agree on the federal approach, which seemed to attract so much opprobrium.

Certainly what the Premier has claimed in his press release is not true; it is false. He said it was the Gillard government that decided a significant pay rise would be awarded to federal MPs, and that that therefore kicked into state MPs. It was in fact the federal Parliament that established that mechanism, and, by the way, that mechanism recommended some major and new allowances for shadow ministers and the federal Leader of the Opposition, Mr Abbott.

Mr P. Davis -- Mr Abbott, I suggest. Is it Mr Abbott you're referring to?

Mr BARBER -- I said Mr Abbott. If we go down the alternative path we may very well come up with the alternative outcome that I have pointed to from the federal Parliament, which is in fact the reason we are standing here tonight.

 

 

Read the full debate in Hansard - scroll to page 54