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Thursday, 29 October 1964


Senator WRIGHT (Tasmania) . - The measure before the Senate concerns the allowances and emoluments of members of Parliament and Ministers of the Crown. Obviously, it is an important public measure. 1 for one would not support the view that members of the Parliament should sock to treat it in a hush hush manner or abstain from debate on account of secrecy, because I. believe that one of the functions of the Parliament and of those who come here in a representative capacity, as we do, is to inform the general public, not only of our formal vote, but also of the reasons for our vote. Therefore, I take the opportunity to participate in this debate, with no pleasure, but with a full sense of the invidiousness of the situation when members of Parliament face the matter of their own emoluments, in which they have such an interest.

The fact that an interval of approximately 12 hours has intervened between the introduction of the measure and our opportunity to rise and speak to it is a source of satisfaction for honorable senators. I have found that period insufficient because I do not readily keep myself equipped with the provisions of this legislation. There are a few matters which, at the Committee stage, I shall ask the Minister to elucidate. It is true, as the Minister for Defence (Senator Paltridge) said yesterday and as Senator McKenna said today, that the inescapable duty and authority to fix our emoluments is vested in the Parliament. But that does not mean that we cannot call in aid an agency or tribunal which could give a measure of reassurance to the country that there had been, in the processes of fixation of parliamentary emoluments, independent consideration at some stage of the procedure. The ingenuity of those who have thought on this subject has not been able to evolve an agency or tribunal, which would satisfy the principle of independence, to deal satisfactorily with the position of Parliament, the final responsibility of which must at all costs be maintained. But of course, in the tedious job of deciding our tariff arrangements, about half way through the history of our federation, this Parliament established a board of considerable independence to advise it concerning adjustments that should be made and the protection that should be given to our industries. I mention that matter because we can recall that although the Tariff Board was established with no overwhelming support from the majority of members of the Parliament, its work has given continuous satisfaction. So it would not be at all out of keeping with precedent if we were to evolve an independent tribunal which had a continuing existence and a continuing responsibility in this matter. It would bc a great aid to members of Parliament, I am sure, and would relieve them of the perplexity which they face in dealing with this matter.

I believe there is a tendency in these debates to give expression to a point of view which has regard only to the individual demands and requirements of members. We must have regard to Parliament as an institution vis-a-vis its members, and that must mean that whatever we do in relation to a measure of the kind now before the Senate must be adjudged as having a real relationship to the people outside. T am pleased to note that in the speech which was made in introducing the Bill some comfort was given by the observation that this increase in parliamentary emoluments is taking place at the end of a series of adjustments in the field outside the Parliament and should not be regarded as the initial stimulus to an upsurge of increases. Anybody who saw the way in which this country developed in the years of stability between the end of 1960 and the beginning of 1964, ought not lightly to engage in activity that might cause even a slight ripple on the economic sea and rock the boat. The advantages of economic stability to the country have been demonstrated, in that three year period, to be very great.

We live in a country in which the Commonwealth Conciliation and Arbitration Commisison adjudicates in wage matters. ]f it adds £1 a week to the basic wage, that increases the cost factor in industry by approximately £100 million. The Commission sits continually. I refer to it only because I believe it would be most illogical for that tribunal to say that there is a real connection between adjustments of the salaries and emoluments of members of Parliament and Ministers of the Crown and adjustments that are made on the basis of the capacity of industry to pay. But I do not pretend that logic is a clear stream in the channels of thought of that tribunal, or indeed, of any other body of men. There is a risk that the repercussions of this measure will have untoward results in creating instability in the economy. That factor alone should induce restraint rather than excess in the field of remuneration we are discussing.

In the discharge of our duty I believe it is incumbent on us to survey other fields of endeavour to ensure that we do justice not only to the institution of Parliament and its members but also to our supporters. 1 refer to the taxpayers. I approach this

Bill with much less vigour than I will approach another bill, dealing with taxation, that is to come before us shortly. I shall instance just one provision in the proposed income tax legislation. If a person creates a trust, the income from which is a modest £400 a year, and under the terms of the trust the enjoyment of the income is deferred for the advantage of an infant, an invalid or a spinster, that income, as proposed in the legislation, will be taxed at the rate of 10s. in the £1. That is not a matter for discussion now, but the point I make is that in the field of taxation we are putting the Commissioner of Taxation into the position not merely of an interpreter of the law but of a person with discretion to say, as between taxpayers engaged in similar transactions, that A shall pay tax and B shall not. We are drifting, therefore, into a system where, if there are no safeguards, priviledge might be thought to be extended to members of Parliament, and where the authority of the official, not the rule of law, is the safeguard to the individual taxpayer.

The next observation I want to make is that there is something illusory about what wc are engaged in today. The salary of a Minister is to be £8,000. On an ordinary assessment, the income tax to bc deducted from that salary would be about £3,500. I am speaking in round figures as I have not had access to the most recent schedule. The income of an ordinary member will be about half that of a Minister. Taking it as £4,000, the tax to be paid will be about £1,200. There is an everincreasing elevation of incomes, but because of the steepening incidence of taxation, the high income figures are really an illusion. I think that some approach must be made to this problem; otherwise we will have in the community such a degree of uniformity that the man whose energies are supposed to be developed by the prospect of enjoyment of higher rewards will find frustration.

Having made those preliminary remarks, I now wish to make some observations on the specific provisions of the Bill. There is an adjustment of the salary of members and senators from £2,750 to £3,500, with an adjustment of the expense allowance, in the case of senators, from £750 to £1,000. I shall content myself by quoting those figures. The first thing to be remembered is that we start off from what must be conceded by all to be a generous base - the base of the Richardson report. Since the presentation of that report, there have been changes in various fields. The cost of living has gone up and the remuneration of many sections of the community has been adjusted. I have not made a percentage assessment, but I am not confident that some of the figures published in this morning's press should be relied upon. The engineers' case had an important impact upon professional salaries generally, but I believe that we need to approach that case, if it is to be taken as a guide, with great care. The engineers had been badly neglected. They started their endeavours to get an increase in salaries as far back as 1956, but their efforts came to fruition only after six or seven years. Therefore, the increase of engineers' salaries in the period from 1959 to 1964 is not a satisfactory guide.

We also hear reference to what has been done in the State Parliaments. I believe that we are apt to mislead ourselves badly by paying much attention to the State Parliaments. State parliamentarians are caught up in the vortex of an artificially inflated internal economy. The State Parliaments do not have complete responsibility, as this Parliament has, for raising the revenue by which the nation is supported, and adjustment of the salaries of State members is subject, therefore, to criticism on that basis. When we have regard to the experiences of other Parliaments, we ought at least to glance at what is being done in Great Britain. The only adjustment that has been made there over many years has been to augment the salary of £1,000 by an expense allowance of £750. The salaries of members of the House of Commons have been left at the very low level of £1,000. I am not saying that that is at all acceptable to me as a standard of remuneration for members of this Parliament, but I just make reference to it. Then I have regard to the position in the United States where, of course, the remuneration is enormously in excess of what is proposed in this Bill.

Having regard to all these matters, I say, as a general proposition, that for the majority of members of this Parliament the adjustment of parliamentary salaries and expenses allowances is appropriate. It is bigger than I would have expected before yesterday morning, but not much. At any rate, I think it is appropriate; I would have thought that the new ministerial allowances, instead of being double those provided for ordinary members, would have been about 50 per cent. more. I do not understand that the Senate is in any hurried mood today and I see no reason why this debate should be shortened. For myself, I much prefer a debate in which each individual expresses his view, hoping that it will be respected even if it is different from the views expressed by others. But the individual, of course, has great respect for the collective point of view.

As to the increment of ministerial allowances and expense allowances of £2,000 I will adopt that as appropriate. I shall also adopt as appropriate, although very reluctantly and with acute surprise, the adjustment of what are called travelling allowances. I simply say I will not dissent from the adjustment of these allowances which are to rise from £12 to £15 a day for senior Ministers and from £10 to £12 a day for junior Ministers.

I come now to the next field - the superannuation for retired members of Parliament. The proposal is to advance the weekly superannuation payment to the individual member from £18 to £32 or £33 a week. This is a very great increase. I take some satisfaction from the actuarial certification that the members' contribution fund had a surplus of £77,000 last year and is estimated to have a surplus exceeding £100,000 now. It has been deemed proper to share this excess retrospectively, so to speak, with the persons who ceased to contribute to the fund years ago. Their weekly superannuation is to be brought, not to £33, but to £18. However, we should recognise that in increasing the parliamentary superannuation allowances to that degree, we are proposing a very great increase. This is not justified by the mere reference to the fact that our contributions are in the form of an investment amounting, if I heard the Leader of the Opposition correctly, to £550,000.

The contingent liabilities that I on defeat or my widow and the widows of other honorable senators will impose on that fund have to be taken into account. But nobody has said that of this £15 a week increase in £10 is to come from the Treasury. Only £3 of every £10 of the increment will be yielded by the members' contributions to the fund. I take that figure of £15 as the weekly increase for the purposes of easier arithmetic. This proposal means that of the increase of £15 a week, we pay in contributions £4 10s. a week and the Treasury provides the balance. We do not want to conceal this fact. If we take credit for our contribution in this respect, it is not proper to say that the take home pay from the actual parliamentary allowance is reduced by that contribution. The fact is that if we pay the contribution out of our salary, we were given it in our salary originally. Notwithstanding that, I propose to support this provision also.

I come now to the feature of the Bill which the Leader of the Opposition briefly noted as something new. I am sorry to say that, in my view, the notice paid to this feature in the second reading speech, is too insufficient to fulfil the requirements of candour. In the first place, I want to remind honorable senators of what the Minister for Defence said in the second reading speech when he announced that the Government had decided against the appointment of a committee to advise it in this instance. The statement was -

We decided against a committee because what we are now proposing to the Senate is essentially an upgrading of the amounts applying under the existing arrangements for salaries, allowances and retiring allowances. It is not a review of the structure of the arrangements or of other parliamentary privileges.

That statement brings to light a distinction that I stressed in the debates on a similar measure in 1959. I have not had time to refresh my mind about what I said then but 1 do not care because in this case the reference is not necessary to establish consistency in my advocacy; I am speaking as I judge the situation today. The revolutionary nature of the proposal in 1959 lay in the completely altered structure of parliamentary emoluments. For the most part, the present proposal is not of that character, but is an adjustment of the rate of emolument on an existing structure. This is not so, however, with regard to what has been called the ministerial superannuation fund, which is entirely new. The- importance of this matter should not escape us, because it creates a vested interest on the part of every beneficiary of the fund. Ministers of the Grown wield terrific authority in a system like ours. Let me hasten to add that by reason of their great abilities and their record of integrity, it is most satisfactory to a country like Australia, bursting with development, to have Ministers of their calibre. But do not let us forget that we might pass through a period when change in ministerial offices may be more frequent than they have been in the past 15 years. To create vested interest in these high offices may produce an inducement consistent in one sense with the independent discharge of duty, while at the same time producing inducements to men of outstanding ability and integrity to seek appointment to such offices. But the establishment of a ministerial' superannuation fund is a new proposition, and I notice that the only reference made to it in the second reading speech of the Minister is a very scrappy reference at the end. The history of this matter shows that a non-contributory scheme was rejected previously although it was recommended by the Richardson Committee. It was rejected by the Government in 1959 on the advice of its parliamentary supporters. The matter is introduced now in the second reading speech in this statement -

Finally, we have examined the possibility of a contributory scheme to give very much modified effect to the recommendation of the Richardson Committee for a supplementary scheme for Ministers and certain other office bearers. The scheme now to be introduced, based upon actuarial advice, provides for a basic contribution rate of £4 Ss. per week and pensions varying with service from a minimum of eight years to a maximum of 14 years. The contribution rates have also been calculated on a basis to ensure that 30 per cent, of the pensions will be met from the fund.

When one turns to the Bill, one finds that the weekly superannuation payable to Minister after eight years service is £9, for a contribution of £4 5s. a week; but after the 14th year of service the superannuation payment raised on the same contribution - if I understand the position - rises to £21 a week. It is said in the second reading speech -

The scheme now to be introduced, based upon actuarial advice, provides for a basic contribution rate of £4 5s. a week . . .

In the time available, although I have requested it, I have not had the advantage of access to any actuarial report and I speak now subject to that handicap. It should be recognised that in relation to this scheme, whatever the contributions make ir. the way of fund, they provide for reimbursement of only 30 per cent, of the pension. In the case of the Ministerial fund, out of every £10 of superannuation payments made, the Treasury provides £7 and the fund provides only £3. I consider that when a Minister who is eligible for parliamentary superannuation of £32 or £33 a week adds, even after 14 years service, a pension of £21 a week, making in all some thing over £50 a week of which 70 per cent, comes from the Treasury, it is not a proposal that can gain my approval. Although I suppose that I will be very much alone in the position I have stated, I express my opposition. Those are the views that I have to submit. In Committee, as I have indicated, I will seek explanations on one or two matters.







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