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Tuesday, 28 October 2014
Page: 12287


Mr TAYLOR (Hume) (16:47): I rise today to support the Parliamentary Entitlements Legislation Amendment Bill 2014, which will reduce the life gold pass travel entitlement before abolishing the scheme for all other than former Prime Ministers. The bill will also strengthen the rules governing parliamentarians' expenses.

The issue of parliamentary salaries, allowances and entitlements generates much interest and comment in the community and, of course, much interest and comment around this building. In my own electorate of Hume, I often receive correspondence, calls and personal approaches from constituents on this issue. Many believe that current parliamentary entitlements are out of step with what the community thinks is reasonable. I accept that some of this commentary and feedback is driven by a level of cynicism in the community in relation to politicians and political life. But for me, as the federal member for Hume, I never forget that it is the taxpayers of Australia that pay my salary. I know that the majority of my constituents work hard each day to meet their commitments and to pay their bills at the end of every week and every month. As their local representative, I know they want me to work hard and act with integrity to ensure that their lives and burdens get easier, not harder. I know that most reasonable constituents do not begrudge my salary if they believe I am quite literally busting a gut for them. And that is what I seek to do every day.

I am delighted to report that one year into this job, I know what most representatives in this House do for their constituents every day. Some of the very best work in this place goes completely unnoticed but that is the nature of public service. I think that some of the cynicism about politicians stems from the lack of transparency about how we spend our time and that is something which I seek to address with, amongst other things, very regular Facebook posts. But it is crucially important that the remuneration and benefits we receive are in line with community expectations and are in line with changing employment patterns outside of this parliament.

We know that many former parliamentarians have a very successful career beyond their time in this place, often facilitated by the experience and networks they developed while here. Years ago, one career was enough. But these days many of us have a series of careers, and that is a good thing. This legislation is simply one of a series of reforms in this area over the last 10 years intended to bring parliamentary remuneration and entitlements more into line with changing community expectations and changing employment arrangements.

In relation to superannuation, a very common bone of contention for some of my constituents, changes have previously been made to the parliamentary contributory superannuation scheme. This was a defined benefit scheme which provided for rates of retiring allowance varying from 50 per cent of parliamentary allowance after eight years' service up to 75 per cent parliamentary allowance after a service of 18 years or more. The changes closed the scheme to new members from 2004 and moved parliamentarians to an accumulation scheme under the Parliamentary Superannuation Act 2004. I believe this is in line with most of my constituency in their own employment agreements and so it was a good reform.

Senators and members can have their superannuation paid to a complying superannuation fund or to a retirement savings account of their choice, subject to the same rules that apply to employees in the private sector and public service, and it has the same preservation age. It is true that the contribution from the Commonwealth at 15.4 per cent of salary, is, I acknowledge, more generous than most employer schemes.

In relation to MPs' entitlements, in 2009 the Australian National Audit Office highlighted the shortcomings in the management of these entitlements. The ANAO said that it was difficult to understand and manage for both the parliamentarians and the Department of Finance, which administers the entitlements.

The audit supported a review of the entitlements framework and greater transparency in the system. Before this, entitlements had not been comprehensively reviewed since 1971. In December 2009 in response to the ANAO report, the government set up a committee to review parliamentary entitlements, chaired by a former senior public servant, Barbara Belcher. The report from this review, the Belcher review, drew a distinction between remuneration and tools of trade, or entitlements, such as office facilities and transport. It recommended that salary be dealt with by the Remuneration Tribunal, while entitlements would be dealt with by a single piece of legislation. The government accepted the recommendations of the Belcher review, and from August 2011 the Remuneration Tribunal was given the power to determine parliamentary base salary and is required to publish reasons for its decision on parliamentary remuneration. Under legislation the parliament does not have the power to disallow parliamentary remuneration determinations made by the tribunal. In other words, our remuneration is no longer in our hands.

Further in December 2011 the Remuneration Tribunal made a number of recommendations, including: the parliamentary base salary be set at $185,000; the prospective closure of the Life Gold Pass Scheme; termination of the overseas study travel entitlement; greatly limited severance travel entitlement; severance of the link between pensions under the old superannuation scheme and current parliamentarians' salaries. These recommendations were accepted and legislation to effect these changes came into effect March 2012.

Since coming to office, this government has been exploring opportunities to make sensible changes to the parliamentary entitlements framework, including those of former parliamentarians, to ensure that we deliver value for money, openness and transparency. This is always an extremely tricky area. I fully acknowledge that we are impacting many who have made an enormous contribution to this country over a long period of time. Former parliamentarians from all sides of politics deserve our greatest respect. And, as a parliamentarian myself, I now understand the scale of the commitment so many of these people make to our country.

But travel entitlements beyond the life of a job are unusual in this day and age. Community standards and expectations are changing dramatically, and it is unreasonable to expect taxpayers to pay for something that they cannot expect from their own employment relationships. In addition, it is increasingly true that parliamentarians can expect a career, often a lucrative career, beyond their time in this place.

Some of my constituents argue that former parliamentarians should be constrained in some way, particularly with respect to lobbying. However, I will always defend the right of former parliamentarians to remain involved in the political process. They have a wisdom and experience that makes them extraordinarily valuable to society for many years beyond their time here.

The changes announced in November 2013 and in the 2014-15 budget and encompassed in this legislation reflect community standards, ensuring that taxpayers' money is well spent. This bill amends the Members of Parliament (Life Gold Pass) Act 2002 and changes the title to the Parliamentary Retirement Travel Act 2002 to better reflect the intent of the legislation. It will reduce, remove and reform travel entitlements for holders of the parliamentary retirement travel entitlement for both current and former senators and members.

Specifically, the bill: imposes time limits on using the entitlements; and imposes limits on access to the entitlements, including closing it to people who have not met the qualifying periods before 14 May this year, and mandating that no-one can access benefits under the scheme, except for a former PM, if they retire from 1 January 2020 onwards. The bill reduces the number of trips per financial year under the entitlement for the time it is still in operation. The bill removes the ability of spouses and partners to access the entitlement, other than retired former PMs, and removes the entitlement to travel by a spouse or partner of the PM or a sitting former PM.

Lastly, and importantly, the bill requires that all parliamentary retirement travel, including travel by the spouse or de facto partner of a retired former prime minister, be for the public benefit. That is an extremely important aspect of this; it should always be for the public benefit. That means that in practice it does not include travel for a commercial or private purpose.

This current legislation will also amend the parliamentary entitlements framework to: impose a 25 per cent penalty on travel claims that require subsequent adjustment more than 28 days after being first submitted; limit the entitlement provided to the dependent children of senior officeholders to those who are less than 18 years of age. Just to clarify that: a senior officeholder is a minister, the President of the Senate, Speaker of the House or Leader of the Opposition.

At this point I thought it might be useful to complete a scorecard in relation to the main bugbears of community members and many of my constituents, in relation to MPs' entitlements once this legislation is in place. The first and most common complaint is that MPs and senators pensions are too generous. On this point I think the changes made to MPs' superannuation, moving to an accumulation plan or nominated superannuation fund, addresses this key concern. I do acknowledge that there are MPs and senators who entered politics 25 or 30 years ago who have accrued entitlements under previous arrangements, and that for many in the community this remains a concern. However, I would emphasise that, wherever possible, we should respect a defined benefit scheme established some time ago. Those parliamentarians came into and in many cases left this place with a legitimate expectation that their defined benefit scheme would remain intact.

The next complaint I often get is that politicians should no longer vote themselves a pay rise. Again, the changes made in 2011 move this power to the Remuneration Tribunal, which now determines base salaries and is required to publish reasons for its decisions, as I said earlier.

Lastly, I often hear that politicians should not be entitled to a gold pass for travel. Of course, the purpose of this legislation is to reduce that entitlement and to set up a path to the eventual termination of the scheme. So, clearly, some important changes have been made and we are heading strongly in the right direction.

The other important piece of context here is the budget. The government made a number of difficult decisions in the budget. I have said before in this House that we seek to address two fundamental problems in the budget. The first is the $50 billion deficit in the last financial year, alongside debt expected to reach $667 billion if there is no intervention. But the last government left a far more insidious legacy, of fast rising expenditure—particularly in areas like health and welfare.

This is the most dangerous problem we face, because expenditure rising faster than revenue over an extended period drove the US and Europe into deep and sustained economic crises. The government is working very hard to turn that around, to get spending into line with tax revenue. It is totally inappropriate that we should keep borrowing from our children and grandchildren to fund expenditure today. I fear that those opposite intend to pass the buck to our children and our grandchildren. If not, it must be that they intend to raise taxes; time will tell. My money is on a sharp increase in taxes if Labor ever gets into power in the coming years. But as each day passes, the need for fiscal responsibility becomes even clearer.

For instance, the Parliamentary Budget Officer, Phil Bowen, recently commented that commodity prices could fall faster than expected, increasing our budgetary challenge. I think that this prospect is now very real, particularly with respect to iron ore prices. His key point, I believe, was not to cry wolf or to inject a flavour of panic. He was identifying the need for prudent budgets which include building a sensible buffer—a sensible buffer—against economic shocks.

There is much in this bill that some current and past parliamentarians do not love, and understandably so. But the process of bringing our remuneration and benefits into line with community standards and expectations is an important one, and one that I strongly endorse. I commend this bill to the House.