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Labor, Coalition would save $40 million by reforming pollies super before 2004 election.



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Senator John Cherry Australian Democrats Superannuation spokesperson

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11 February 2004 MEDIA RELEASE 04/063

Labor, Coalition would save $40 million by reforming pollies super before 2004 election Delaying reforms to parliamentary superannuation until after the next Federal Election could cost over $40 million in additional accumulated superannuation liabilities, according to the Australian Democrats.

Democrats’ Superannuation spokesperson Senator John Cherry said over the last three electoral cycles, an average of 50 members and senators left Parliament either at or between elections.

“Delaying superannuation reforms until the 2007 election would mean that another 50 or so parliamentarians would become eligible for the current, overly generous rules,” Senator Cherry said.

“Given the average length of service of MPs is around 9 years, that suggests that on average, departing MPs would be entitled to a pension of around $52,000 indexed for life from age 55.

“That equates to the equivalent of a lump sum of around $1 million, compared with around $140,000 that a public servant on a similar salary for nine years would receive under the new public sector superannuation arrangements.

“Delaying reforms until the 2007 election rather than the 2004 election would cost taxpayers an additional $40 million in additional superannuation liabilities to cover an additional 50 new parliamentarians compared with public sector standards.

“Indeed, if Labor and the Coalition had implemented these reforms prior to the 1998 election when the Democrats’ initiated Senate Committee Inquiry first drew attention to the problems of the scheme, 86 fewer parliamentarians would be eligible now, a saving of upwards of $75 million in likely unfunded future liabilities.

“The Democrats call on Labor Leader Mark Latham and the Prime Minister to reach a cross-party consensus on reforming the parliamentary super scheme once and for all, and applying those changes effective immediately.

“Delaying reforms until 2007 and adding $40 million to the unfunded liability of the current, excessively generous scheme would not be acceptable to the Australian population.

“The Remuneration Tribunal should also be directed to conduct a full, comprehensive inquiry into the total remuneration package of Parliamentarians,” concluded Senator Cherry.

For interview with Senator Cherry contact Pam Hose 0408 752 750