PARLIAMENTARY REMUNERATION (BASIC SALARY) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 2 May 2012.)

The Hon. R.I. LUCAS (16:13): In summary, this bill is relatively simple in terms of what it seeks to do. Under the previous salary arrangements that applied for South Australian members of parliament, which applied up until late last year, there had been a nexus established between state and federal members of parliament that state members would be paid $2,000 less than federal members of parliament. I will offer some comments in a moment, but there have been critics of that sort of arrangement for South Australian members of parliament in terms of salary. As I have said before, and I will say again today, in my time in this parliament I have seen a number of different models and none of the models are ever supported by most members of the community, most media commentators, and others.

We have seen over the years various models that include not only this nexus arrangement, which linked us with federal parliamentarians—and which actually linked to the pay of federal public servants, so that was the nexus established at the federal level—but also arrangements which relate to a supposedly independent remuneration tribunal decision, which relates to the salary and benefits of members of parliament. We have also seen various other schemes that have been tried in other jurisdictions in relation to linking to averages, linking to increases that public servants might get in terms of their salary increases and others.

However, I say without any fear of contradiction, irrespective of the model, there has not been one model that has been accepted by those critics of what members of parliament are paid. If you move to a nexus model people criticise that and say that you should have an independent tribunal. If you have an independent tribunal that says that on a work value case members of parliament should be paid $50,000 a year more, there is uproar in the community and people say that we need to move to a different model from an independent remuneration tribunal.

I suspect that those of you who are much younger than I am in terms of serving in this state parliament—and we will see longer periods of service ahead—when you end your parliamentary service, whether it be in 10, 20 or 30 years' time, will be reporting exactly the same; that is, there is no particular model that is successful. I note in the comments by the Treasurer, Mr Snelling, when he spoke on the bill in another place, that he said:

We are calling for wage restraint, and I will certainly be calling for wage restraint at budget time amongst public sector workers. I think now would not be a good time for there to be a significant pay rise for members of parliament.

There is never a good time for a significant pay increase for members of parliament. I have been in the parliament for almost 30 years, and for every one of those almost 30 years it has never be a good time for a pay increase for members of parliament. For those who may be in the parliament for the next 20 years, I assure you that there will never be a good time for a pay increase for members of parliament: that is just the brutal reality.

The inference in the statement from the Treasurer that now is not a good time is that at sometime in the future there will be a good time. I assure the Treasurer and all members in this chamber that there will never be a good time for a salary increase for members of parliament. That is just a statement of fact.

The only way it will ever occur will be when a government of some persuasion and an alternative government of clearly a different persuasion hold hands and accept the criticisms of independent and minor party members, if they exist at the time, accept the criticism of the media, accept the criticism of the broader community, and say, 'We believe that members of parliament have an important job and should be remunerated accordingly.'

Through my period in government (and this is no criticism of this current Labor government), whether it is Labor government or Liberal government, or Labor opposition or Liberal opposition, whether it is Greens now, No Pokies a few years ago, or whether it was Democrats back in the 1980s, there have been for the last 25 years Independent or minor party members who, given the political capacity to generate support in the community for opposing a salary increase, will see political advantage in so doing. Going back to my contribution in November last year, I finished by saying:

I think there would have been (and there have been) alternative ways of handling this process better but, as I indicated earlier, we are where we are and, given the circumstances, I do not believe that there is any alternative other than to delay the time for this inevitable decision. But in essence what it means is that a lot of work now will have to be done in terms of managing a decision. I am fearful, in part, that this will be left until the death knell and we will come close to the end of June next year and people will still be fluffing around trying to make a decision on this issue. What is going to be needed is some determination to make a decision, some strength to make a decision, and then ultimately some strength to stand up and defend whatever decision ultimately is taken on this difficult issue.

We have seen none of that. What we are seeing is, as has been indicated in the explanation for the bill, an acceptance that instead of having a nexus of some $2,000 less than federal members of parliament this nexus will now be just over $40,000 less than federal members of parliament.

With the greatest of respect to my federal colleagues, who I love dearly—and I am sure the leader of the Greens in this chamber will say, even more so, that he loves dearly his federal colleagues; of course, he has the advantage that the person he loves dearly is actually—

The Hon. J.S.L. Dawkins interjecting:

The Hon. R.I. LUCAS: Russell used to say it. But the people that the Hon. Mr Parnell loves dearly are actually now receiving that benefit of an extra $40,000 a year because of the changes that have occurred in the federal parliament. However, as I said, and with the greatest respect in the world for our federal parliament, how can anyone justify to me that the amount of work and activity that a federal member of parliament does relative to a state member of parliament is, in work value terms, worth $40,000 a year more?

It is just a nonsense claim. I am sure our federal colleagues might choose to disagree with that, but I am also sure that I speak on behalf of most, if not all, state members of parliament when I indicate that that is certainly not the case; it never has been the case, it is not the case now, and it will never be the case that it could be argued that in work value terms they should be remunerated at a level of $40,000 more than state members.

Of course, that will raise some issues in terms of attracting talent. I have been notably critical of the talent attracted to the government in terms of the dregs of society from unions and other leftovers that inhabit the benches in both this and the other chamber. One only has to see the quality of the front bench in this chamber to know that the Australian Labor Party and its factions have been dragging the bottom of the barrel in terms not only of attracting people into the caucus but also who is available to end up on the front bench.

With due respect to the Hon. Ms Gago and the Hon. Mr Wortley, in any other era the fact that they would qualify to be ministers of the Crown is laughable. The travesty is that their factions believe they are either the best or most suitable for promotion at the moment. Both the Labor Party and the Liberal Party are going to find it even more difficult to attract young, talented people into the state parliament as opposed to the federal parliament.

Recent decisions taken in relation to superannuation have, of course, made it harder to attract people to come into the state parliament—and the federal parliament for that matter, because the same changes were made federally. Now there is a combination of there being no difference in terms of superannuation from superannuation provided generally to other workers in the community and a salary arrangement significantly less than for federal members, as well as other benefits and allowances being significantly different.

I think it was my lower house colleague the member for Davenport who highlighted that, for a fully serviced car, for which state MPs, I think, pay approximately $7,000 a year (or a bit over), federal members have been paying $700 a year and, I understand, under the new arrangements, they will be paying zippo, nothing, naught, zero—however you want to describe it.

As I think the member for Davenport highlighted, the differential between just the car and the salary for a backbencher, state and federal, would be close to $50,000. If you then look at the salary position of a federal minister, as opposed to a state minister, you would be looking at a salary differential of approximately $75,000 to $80,000 a year in terms of governance. That is going to provide challenges to good governance in terms of attracting talented people into the state parliament and into the state ministry.

The other thing I put on the record at the end of last year during this debate, and I want to do so again today, is the relative salaries of public servants in South Australia compared with state members of parliament. What I indicated in November last year was that, as the Chair of the Budget and Finance Committee, one of the pleasures in life I have is being confronted by senior members of the state Public Service representing various departments and agencies every fortnight at the Budget and Finance Committee meetings.

Most recently, the government appointed Freddie Hansen, one of the ex Thinkers in Residence, as the new boss of the Urban Renewal Authority, I think it is called. After some time, we chased up and finally ascertained the contract arrangements for Freddie Hansen. Freddie Hansen, as an ex Thinker in Residence heading up an Urban Renewal Authority (so we are not talking about the health department or the education department) is being paid $392,000 and a few cents a year as the head of the Urban Renewal Authority.

The government will say, 'We've got to pay that sort of money to attract people who are prepared to work as the head of an urban renewal authority.' I compare that with the salary of state members of parliament at $140,000 a year—people who are required to make decisions in terms of the government and the governance of South Australia and South Australians.

It is not just the chief executive officers. At the end of the financial year 2010-11, which is just over 10 months ago, so it will be probably another 3 or 3½ per cent higher now, I pulled out some figures of not all but a number of the bigger agencies in South Australia from the Auditor-General's Report to look at the number of public servants being paid packages above $150,700. The reason I chose $150,700 was that the salary for members of parliament at that stage was about $140,000 and, with 9 per cent superannuation to add to that, the closest band I could come to was the $150,700 one the Auditor-General reported on. In not all but a significant number of the bigger state government departments and agencies, there were 832 public servants in South Australia earning more than $150,000—almost 1,000 public servants earning more than a state member of parliament earns.

I will happily argue anywhere that I believe that the job and role of a state member of parliament are important, and I will happily argue that a state member of parliament should be in some way remunerated at a level which is equivalent to at least a number of these public servants who are earning more than $150,700. We can argue about how much higher, and that will ultimately be an issue in relation to what is acceptable to parliament and the community and others, but I cannot accept that there are 832 public servants who really, on the basis of a work-value case, are entitled to be paid more—and, in some cases, significantly more—than a state member of parliament.

The reason for that is, for the 69 members of parliament, there is this understandable focus on members of parliament and what they are paid and what they are entitled to. Some of us, of course, do not make the case any easier. The example in the federal parliament at the moment of a certain MP just gets a head nod from the community that, 'There you are, there's the perfect example of members.'

In this particular case, though, it is not actually the rorting that has gone on as a member: it is the alleged rorting that went on as a union official prior to his becoming a member of parliament, but I think people sometimes lose that in the debate. I know in the discussions that I have, people just assume that this is the sort of rorting that all members of parliament go on with.

The PRESIDENT: They're that poorly paid some of them have to shoplift!

The Hon. R.I. LUCAS: If you want to enter the debate, Mr President, I would invite you to do so. Your interjections, of course, are out of order.

The Hon. Carmel Zollo: Precious, isn't he?

The Hon. R.I. LUCAS: No, not precious. I am just pointing out that his interjections are out of order.

The PRESIDENT: That's very true.

The Hon. R.I. LUCAS: The challenges for state members of parliament are going to now be significant because, the reality is, as I said, that this has occurred under Liberal and Labor governments over many years and with Liberal and Labor oppositions over many years, so it is going to be well-nigh impossible to find the circumstances where a change might occur.

Whilst it is a personal view and I am expressing a personal view in relation to some of these comments, one of the options that was being raised which has now been obviously rejected by the government and others is actually to look at some of the benefits that state members of parliament get and to actually package those to remove some of those perks and benefits, which is what the federal report was about, and to replace that with salary for members of parliament.

There is a benefit for new members in that, and I put my position on the line. That is, I am one of the more fortunate ones because I entered long enough ago to still be in the original superannuation scheme, but the newer members are not receiving the benefits of the older superannuation schemes. They are receiving the same benefits as others broadly in the community in relation to the accumulation schemes that apply to everyone, subject to the investment performance of the schemes and the investment climate at the particular time.

However, if an arrangement came in where you could actually say that some of the perks or benefits—however you want to define them—that are currently paid are removed and the dollar equivalent was actually then paid to state members, those newer state members would of course see an additional benefit in terms of their superannuation because the superannuation paid by the employer is based on a percentage of the salary component that they are being paid.

It would also mean that for things like travel—$11,000 or $12,000 a year, which attracts some criticism from the media and others—if that benefit, for example, was to be removed and the salary equivalent was increased for members, then members could choose, if they wanted to, out of their increased salary to travel or not to travel, and some of the odium of overseas travel in particular but also interstate travel that members of parliament attract might also be removed with that sort of a change.

You could argue publicly that there is no additional cost to the taxpayers of South Australia if you are on the one hand removing perks and benefits and on the other hand increasing the base salary for members of parliament. As I said, that has an added benefit for, in particular, the newer members of parliament we are trying to attract and retain in the parliament.

It may well be that that is the sort of area future parliaments and governments might need to look at; that is, it is all too hard to look at the notion of a work value case, as occurred federally, and to argue and defend a state salary increase, as the federal people have done. If that is too hard, it may well be that at some stage in the future there will be an option where you do something which is relatively revenue neutral. You remove benefits like overseas travel, perhaps; you might even look at removing the payment for committees, because that is a difference between state and federal MPs.

You might look at, for example, whether we need to continue to provide taxpayer funded cars for chairs of two or three committees, given that we do not provide taxpayer funded cars for chairs of other committees. Do we need to provide a taxpayer funded car for the Chairman of Committees' position or the Deputy Speaker's position in the lower house? Potentially, you have savings there of $100,000 plus, I am sure—probably more than that when you come to think of it—in relation to three, four or maybe five cars. There might be $500,000 in terms of savings, which again, in a revenue neutral way, might be able to be translated into a modest revenue neutral salary increase for the base level of salaries for MPs.

It may well be that some creative thinking along those lines will really be the only option for the future. Again, the only way even that option will happen is if people of goodwill amongst all the members of parliament—government and opposition, and others—are prepared not only to sign off but endorse and support such an option in terms of providing greater equity for state members of parliament.

With that, I indicate the support for the bill, which provides a 2.9 per cent salary increase from 1 July to state members of parliament and which will continue to see state members of parliament paid significantly less than almost 1,000 state public servants within government departments and agencies.

The Hon. R.L. BROKENSHIRE (16:38): I will be brief, but I want to put a couple of remarks on the table regarding this bill. Clearly, it is going through, so there is not a lot of point in talking about it, but what I would say is that over successive governments, irrespective of their colour, decisions are often made by the executive of the government on whether they are going to support pay rises and conditions for MPs or withdraw pay rises and conditions for MPs. This has happened for 20 years at least that I can recall.

I can understand why the community is cynical about situations regarding salary structures and conditions for members of parliament. I think the only way that this is ever going to be sorted out properly is for fingerprints on any conditions for members of parliament to be totally removed from the government of the day, from the parliament of the day, and that there should be a tribunal that is structured already but is not getting the opportunity of doing a proper analysis on what members of parliament are worth.

Many people in the community would suggest we are worth zero, but most good-thinking people realise that members of parliament need reasonable conditions and salary structures. I find that the community totally disagrees with the fact that here are we are again today debating whether there should be a certain gap between the nexus of the federal parliament and the state parliament. I strongly and firmly believe that the best way forward for transparency and for independence is to hand all our salary considerations and all our conditions around other sectors of our employment to the tribunal.

Once and for all it should be left right out of the hands of the government of the day or the parliament. I would support a government that actually said, 'Right, let's remove all our fingerprints from this. Let's get right away from it and set it up to be independent and push it to an independent remuneration tribunal,' such as is done with the courts and the judges of this state and others.

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (16:40): The Hon. Ann Bressington did indicate that she might want to make a contribution.

The PRESIDENT: She is not here.

The Hon. D.W. Ridgway interjecting:

The PRESIDENT: She is in a conference, is she?

The Hon. G.E. GAGO: Okay, good. I understand that she does support the bill, nevertheless, so I will proceed. She is aware that I was going to put this through committee.

The Hon. R.P. Wortley interjecting:

The Hon. G.E. GAGO: She does support it, yes. By way of summing up, indeed, this is an important bill. It maintains the link between the base salary of state parliamentarians and that of federal parliamentarians. However, to obviously avoid the significant increases in salaries that we saw recently, it will set the difference between the base salary and state and federal parliamentarians at $42,000 from 1 July 2012. This will mean that the base salary of South Australian parliamentarians will be $140,000 per annum from 1 July 2012, which is an effective increase of 2.9 per cent. I thank honourable members for their contributions to the second reading stage of this bill, and I look forward to its being dealt with expeditiously through committee.

Bill read a second time.

Committee Stage

Bill taken through committee without amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (16:43): I move:

That this bill be now read a third time.

Bill read a third time and passed.