Bills

Parliamentary Remuneration (Basic Salary) Amendment Bill

Second Reading

Adjourned debate on second reading

(Continued from 20 June 2018.)

The Hon. R.I. LUCAS (Treasurer) (16:56): I rise on behalf of government members to speak on this bill. It is an important bill. I have in the past, when in opposition, previously when in government and now again in government, been prepared to stand up on behalf of not only government members but all members of parliament and speak out against these sorts of bills and motions.

I feel strongly about this particular issue. As I near the end of what many of my opponents say has been too long a parliamentary career—nevertheless, as I near the end of it—I speak without fear or favour, but I speak in exactly the same way as I have on many other occasions, both earlier and in the middle stages of my career. I think these bills and motions do no good service to what I think should be an important role, an important profession and an important occupation, that is, serving the community as an elected representative as a state member of parliament.

Members of parliament are often demeaned collectively as a species by all and sundry. The whole notion of members of parliament being overpaid and underworked is such a populist notion that it is an easy horse upon which opportunists can hop. In my view, this particular bill and these particular types of motions are perfect examples of that.

It serves no good purpose, in my view, and all it seeks to do is to cast an even worse light, if that is possible, in terms of what I think should be an important profession and occupation that one would hope more and more South Australians would aspire to over the coming years. I know it will be a forlorn hope, but I hope at some stage in my dotage I might look back in my post parliamentary life and actually see that there is a united view amongst all in the parliament, and perhaps a view from some in the community, that members of parliament are not indeed overpaid and underworked in terms of the work they undertake.

I know how hard members of parliament generally work. I accept that, as with any profession, there will be a minority that do not carry their weight. There will be a minority, perhaps, that do not earn their living—I suppose that is the polite way of putting it. However, overwhelmingly, in my experience, even though I am trenchantly opposed to the political views of the opposition on many occasions, I nevertheless have a fervent view that the overwhelming majority of members, Labor, Liberal and crossbenchers, work hard for their living and are entitled to a reasonable recompense for the work they do on behalf of the community.

When I last spoke on these sorts of issues—it seems a long time ago, but it was actually only three years ago in 2015, when the most recent substantive changes, which I will address in a moment, were addressed. I have not had the time to pull out more recent information, which seems a little bit silly, because now that you are in government you have so many staff and departmental people you would think you would be able to pull out these sorts of figures very quickly, but we have other things to do at the moment rather than pulling out debating points for this particular motion.

At that time, in 2015, we did a quick check of the departmental reports and the Auditor-General's reports, and we established that at that particular time there were more than 1,300 public servants being paid more than $151,000 a year. The reason why $151,000 was the figure is that at that time the base salary for MPs was $153,000. So there were 1,300 public servants being paid more than the base salary three years ago. There were 500 public servants being paid more than $201,000, so we are not just talking about 15 or 16 CEOs who are all being paid $400,000, $500,000 or $600,000 a year. We are talking about a—cavalcade is not the right word—large number of public servants at levels below the CEO level who are being paid significant sums of money.

Again, I have not had the chance to check what I have been told in some of the budget bilateral discussions, but I have been informed that there are at least 50 persons within the SA Health department who are being paid more than the Minister for Health. Now, the Minister for Health is paid somewhere between—I am guessing—$350,000 and $400,000, because the base salary now is just under $200,000 and the loading for a minister is $75,000.

The Hon. M.C. Parnell: Seventy-five per cent.

The Hon. R.I. LUCAS: Seventy-five per cent, yes. So it is somewhere between $350,000 and $400,000, I would imagine, that the Minister for Health earns. If that information is accurate, what I am told is that there are more than 50 persons within SA Health who are earning more than $350,000 to $400,000. I suspect a number of those will be clinicians who have a combination of salary and remuneration fee arrangements within their salary package, but I do know that at the bureaucrat level there are significant numbers as well being paid above $250,000. Admittedly, it is an extraordinarily large department.

In highlighting that, I am not arguing that members of parliaments' salaries should go up to those particular levels, because that will be an easy grab for the odd politician or two or for the media, but what I do is in defending what I believe is not an unreasonable package of entitlements and benefits that members of parliament, office holders and ministers have.

That is the essential premise that I have in relation to these issues. I have always had it, and I will continue to put that particular point of view. It is not a point of view that will win public favour. It is not a populist view, but the easy hit is, as I said, to take a tilt at the salary and wages of members of parliament, to take a tilt at their benefits and entitlements—I will have some more to say about that in a moment—to take a tilt generally, as I said, and to surf the populist wave of criticism of MPs as being overpaid and underworked.

In 2015, that particular debate was in part was driven by comments that the former premier had made in relation to MP salaries and superannuation. As it transpired, the former premier's position on superannuation was not continued by the former government, but in relation to the salaries and allowances issue, a range of changes were entered into, which were the subject of the 2015 legislation.

The Hon. Mr Parnell expressed concerns about some aspects of it. I think he referred in the second reading this time to—joint appearance might be too strong a description—an appearance that he and I and, I think, the then Attorney-General made at the same time before the Remuneration Tribunal in relation to the aftermath of the 2015 legislation.

I refreshed my memory reading my contribution this morning about what was driven in relation to the 2015 legislation. I did not actually indicate when it had started, but I highlighted that for many years MPs' salaries in South Australia had been linked to federal MPs' salaries and had been linked at a level of $2,000 less than the federal MPs' salaries. The Hon. Mr Parnell will say, 'Why would you pick $2,000?' The honest answer to that is that it was, I suspect, just a number that MPs picked out at the time in terms of the difference. That is, there was an argument that they should not be paid any more than a federal MP, because federal MPs have, generally, bigger electorates, except, of course, that senators only have the same size electorate as legislative councillors, so perhaps we, as legislative councillors, should be treated differently.

Then what happened was there was a major change at the federal level, and state parliaments—and our state parliament followed suit—locked in state MPs' salaries at $42,000 less than the federal MPs' salaries. That was because there had been an increase in the federal MP salary of $40,000 and the view at the time, supported by all and sundry in South Australia, was that we would just adjust the nexus from $2,000 to $42,000 difference.

The 2015 bill, of course, was then in response to the former premier's public statements on remuneration and superannuation, and what transpired as a result of that was that there was an increase in the base salary for state members of parliament, but differently to what occurred in the federal arena, it was in essence compensated, in terms of its cost, by a reduction in the benefits that state members of parliament had.

I am sure some of my colleagues will well remember that one of the benefits that MPs lost at that particular time was a travel allowance of around about $13,500 a year. It was not a travel allowance which entitled MPs, as most would imagine, solely to travel overseas but it also was a travel allowance that allowed travel interstate and intrastate in relation to the workload that members had.

That is an important part of the role of a Legislative Council member, who represents the whole of South Australia, intrastate travel. An important role of MPs and, in particular, shadow ministers is occasional interstate travel, to look at what is going on, what occurs, in other states or jurisdictions. However, as part of the offset to the increase in the base salary that $13,500 travel allowance was removed as well.

What was also removed—and, again, the Hon. Mr Parnell has been just a touch on the cynical side in relation to this, because he believes he is one of the very few people who ever use public transport—

Members interjecting:

The Hon. R.I. LUCAS: Every time he says that the Hon. Mr Dawkins puts up his hand as well as the Hon. Mr Stephens, the Hon. Mr Hood, the Hon. Ms Franks, the Hon. Mr Hunter, the Hon. Ms Scriven. So the Hon. Mr Parnell is not the only saint in his own painting in relation to this issue; there are others who have, and who would have if it had continued, availed themselves of the benefits of what we colloquially refer to as the 'gold pass'. In reality it was called something like the Metrocard special pass, which entitled people to free travel on public transport.

The Hon. T.J. Stephens interjecting:

The Hon. R.I. LUCAS: Indeed; checking the quality of the services, as my colleague the Hon. Mr Stephens interjects—perhaps out of order, but I will acknowledge it. In a related benefit there was also travel on the interstate railways, The Ghan and the Indian Pacific; there was access to travel through that. That entitlement was removed as well as part of this particular offset.

Again, and this does not satisfy the Hon. Mr Parnell's relentless pursuit of trying to portray members as greedy and avaricious members of the community—

The Hon. M.C. Parnell: I don't recall using those words.

The Hon. R.I. LUCAS: I am sure he would have, if he had thought of it. The fact is that, from the Hon. Mr Parnell's viewpoint, we only took away the payment for committee members; that is, members of committees, unlike the federal parliament, were paid for their work on standing committees of the parliament. They were also paid a very small fee for select committees, a princely sum of $12.50 a day which I think, as I explained in my contribution, originally started at six guineas or something like that and which eventually translated to $12.50.

That did not satisfy the Hon. Mr Parnell, because he has already indicated that he is coming after the remaining payment, the payment for presiding members of committees—and he nods furiously as I indicate that. He is coming after those members who are paid as chairs of committees. Again, that was an offset.

The fourth offset, which did not impact on a huge number of people, was an entertainment allowance. The Premier had a special entertainment allowance—I think it was $8,000—I think the Leader of the Opposition had an entertainment allowance, and I think ministers had a very small entertainment allowance, so I am told, of about $3,000 or something. All those were removed as part of an offset package to compensate for the cost of the increase in the base salary for members of parliament.

The increase to the base salary obviously had flow-on benefits for some, clearly in relation to those who had additional office positions, such as ministers or whips or presiding members of committees, which involve a percentage of the base salary. If a base salary is higher, then the percentage is higher as well. There is also the flow-on—which was identified at the time—additional benefit of superannuation. Whether you are in PSS1 or PSS2, the defined benefit schemes with a percentage of your final salary, there is an impact there, and if you are in PSS3 the percentage superannuation payment from the taxpayers is a calculation of your base salary. So there was a flow-on benefit that a number of people identified and criticised at the time.

That was the package that was by and large supported by the overwhelming majority of members of parliament. I said in that contribution and I repeat now: I have lived through all the iterations of adjustments to parliamentary salaries preceding this nexus arrangement. The Hon. Mr Parnell says, 'This nexus is unfair and unreasonable. How do you justify it? We are the only group in the community who don't have to justify ourselves in terms of pay increases,' etc. I challenge the Hon. Mr Parnell to identify in his reply the criticism-free model for wage and salary increases for members of parliament. That is the challenge I put to the Hon. Mr Parnell.

I have lived through the various models. Pre the nexus arrangement, the Hon. Dr Such, possibly Mr Parnell at times—although I will not swear to that—and a number of Independent members were critical of these arrangements and said that we should have an independent tribunal. The remuneration tribunal should sit each year and establish the salary, wages and conditions for members of parliament. I remember an occasion back in the eighties when the independent tribunal indeed did that. The independent tribunal came back with a massive recommended increase in salary for members of parliament.

This was an independent tribunal. It sat down, looked at it and said that there should be a very significant increase. I am of a mind that it was $25,000 or 25 per cent. It was a very significant increase in salary at those particular times. There was uproar; there was outrage. The Independent members of parliament led the outrage, of course. Members of the media, members of the community, every Tom, Dick and Harriet in the community were outraged at this massive increase in salary, even though it had been set by an independent remuneration tribunal.

That was always my argument to the Hon. Dr Bob Such and others who said, 'Instead of this nexus, where you don't have anyone independent and you don't have to justify it, let's have an independent tribunal.' I said to them, 'You go back and have a look at what happened when we had an independent tribunal. Dr Such, the Hon. Mr Parnell, or whoever else, what are you going to say if the independent tribunal says that there should be a $50,000 increase in the salary of members of parliament on the basis of a work value case?' or whatever it is they happen to do.

They will be the first ones to run at 100 miles an hour, saying, 'This is an outrage and should not be accepted,' even though an independent tribunal, perhaps with a work value case, has indicated that there should be this level of salary paid for what should be seen as one of the most important jobs in the community: a member of the state parliament, a leader and a legislator. That was the old model and that is why we ended up with the nexus model.

It is a question to ask: why it is $2,000 not $5,000, or whatever the number happens to be? The reason we ended up with a nexus with the federal parliament was that eventually the state parliament, Labor and Liberal, agreed that there is no perfect model for this. There have been various models linking it to state Public Service salaries—if only—on the basis of what I have just highlighted, or linking it in some other way or having an independent tribunal, but there is no method of adjusting politicians' pay that will not be the subject of widespread criticism.

I highlighted in my contribution in 2015 that we occasionally have these outbreaks saying that members of parliament have to be role models; we have to freeze the pay of MPs to set the lead for the community. Let me remind members of the most recent example of that, and there were two others in my time as a member of parliament. The most recent one was the one just prior to the 2015 adjustment.

Prior to the 2015 adjustment there had been no pay increase for 2¼ years for members of parliament in South Australia. The view had been taken that we would show the lead nationally in South Australia; we would freeze wages because times were tough and the whole community would rise up in support and say, 'What a fabulous lead those South Australian pollies and federal pollies have taken; we will now follow and we will be happy to accept a wage freeze across the board.'

So what actually happened in that 2¼ years in which MPs salaries in South Australia were frozen? There was a 6 per cent increase in those two years in both public and private sector wages in South Australia; so an average of 3 per cent, but a 6 per cent increase over the two years whilst MPs salaries in South Australia were frozen.

I have no problem in saying that there is no earthly reason why, if wages and salaries in the public and private sector are going up at 3 per cent or 6 per cent, or whatever is the average, that politicians' pay, members of parliament's pay, should not be increasing commensurately. I have no problem with arguing that particular case, either in this chamber or publicly, and I abhor the notion that in some way politicians and state members of parliament are overpaid and underworked.

It is quite easy, as I said, to be critical, and this particular bill is just the latest manifestation of that sort of surfing of the populist wave of public opposition and contempt for our profession and for the state parliament. What this bill will set up, should it be successful, is in essence a series of virtual roadblocks, I suppose you would say, in terms of justifying a salary increase. I think the honourable member has outlined in his second reading contribution what has to occur.

There would be a recommendation for a salary increase and then the government would have to make a political decision to, in essence, support that particular salary increase. Then it would be set up by way of a regulation or an instrument, something similar to that, because crossbench members like the Hon. Mr Parnell will move for the disallowance of the salary increase because it is outrageous and it is outside community expectations, even though it might have originated from an independent tribunal decision in relation to the salary.

So it is not an issue of getting an independent judgement: you then have an independent judgement and then you have to have a political decision of the government of the day. If the remuneration tribunal says there should be a 10 per cent salary increase because it is way out of kilter, this sets up a process where the government of the day would get belted by every Tom, Dick and Harriet in relation to a 10 per cent increase and if the government of the day managed to fight its way through that and say, 'Hey, this is a reasonable increase and we'll support it', then, as I said, you would have every populist politician in the state parliament moving a disallowance motion, being cheered on by the media and the community, to disallow that motion.

In the event that the two major parties—Labor and Liberal—did not support the disallowance motion, then it is grist for the mill for the minor party, for the Hon. Mr Parnell, to say, 'Well, there you go; it's the old parties banding together, putting their snouts in the trough and seeking unreasonable pay increases at the expense of the long-suffering taxpayers of South Australia.' It is just so easy to take a tilt at members of parliament; it is just so easy to be critical of members of parliament and their salary and conditions.

That is why I have previously, and I do so again today on behalf of government members, oppose, and oppose most strongly, the bill that the Hon. Mr Parnell has moved. For so long as I am in this place, with great respect to the Hon. Mr Parnell, I will continue to oppose what I think are populist attempts to curry favour with the community at the expense of his hardworking colleagues in this place and in another place.

The Hon. M.C. PARNELL (17:25): I will sum up the debate, and I thank the Hon. Rob Lucas for his contribution. I would never accuse him of being inconsistent on this matter. As he has pointed out, it has been his longstanding position to oppose this bill. I do rail against being verballed in the way that the honourable member has done, and I will respond to some of those. I will take up the honourable member's challenge in relation to a criticism-free model and the role of independent tribunals.

Just as I say that the Leader of the Government is consistent in his opposition, I remind members that I am consistent as well. My folder consists of five bills that are pretty much identical: July 2007, October 2009, November 2010, and then, of course, we had an eight-year gap before I reintroduced this bill for the fourth time. However, as the Hon. Rob Lucas has pointed out, we did have the government's own remuneration bill in 2015.

I fully appreciate that what I am doing and have done four times—five if you count the government's bill—is going against the club, rocking the boat and going against the prevailing orthodoxy amongst members of parliament that, whilst we know the system is flawed, whilst we know it does not have a lot of logical sense, you do not talk about it because you cannot win that debate in the community. Ultimately, I think that is what the Hon. Rob Lucas is saying. He said it is a no-win situation and ultimately what we have is the most pain-free method possible of securing adjustments to pay and minimising the ability for people in the community to criticise MPs themselves because, ultimately, it will not have been their doing.

I do not accept that it is the best way we have at the moment and I think that we can do better. It might surprise the honourable member to know that I am frequently out there defending the class, if you like, of members of parliament, talking to constituents about how hard most people work. I am forever trying to dismiss the stereotype that we spend all day in the dining room drinking free wine, just like the rum corps of New South Wales 200 years ago. I do not believe that that stereotype is true and I do what I can to dispel it.

However, that does not mean that the method of setting remuneration is logical. As the Hon. Rob Lucas himself said, the idea of getting paid six guineas for a day's work or an hour's work on a select committee, which translated in 1966—presumably, when decimal currency came in—to 12 bucks, and that that was kept going, was completely illogical. I understand why the government in 2015, when the commonwealth had some radical restructuring of their pay rates, decided it needed to do something different as well.

The honourable member referred to our appearance at the same remuneration tribunal. I figured, after nine or 10 years, it was probably time that I went and eyeballed the people who had been setting conditions for all these years. I had never met any of them and I had no idea of how the process worked. It was interesting. Whilst I think my submissions had some sympathy, they were not consistent with the legislation that was passed so they did not get anywhere.

I still maintain that the idea of giving all members of parliament an extra $1,500 for losing the right to use a bus that most of them never set foot on in their entire lives did not pass the sniff test. It is not as if we have reached some new egalitarian model of fairness. As the honourable member said, quite correctly, I am after some of the other quite unfair and unreasonable supplements to pay that are not borne out by any effort on the part of those who get them. I am glad that when the new government came in they got rid of those two chauffeur-driven cars for chairs of committees. That was outrageous and I will give the minister credit for that. It was good to see those go, but I think there is still a lot more that we can do.

The bill that is before us does not say that politicians should never get a pay rise. What it does—and I think the minister accurately described it—is put in place a process that does enable members, if the circumstances require it, to say, 'Actually, the time isn't right if unemployment is at 10 per cent.' People should remember that, when I first introduced these bills, the steps of Parliament House were awash with nurses, police officers and teachers who were fighting tooth and nail to see if they could get their 2 per cent pay rise out of the state government. It was in that context that I first introduced these bills, because I thought, 'How unfair that they have to fight so hard to get a very modest increase while we just shrug our shoulders and say, "Nothing to do with us—it just turned up in the pay packet."'

In terms of a criticism-free model, I think the minister is probably right, in that there is no model that will be universally criticism free, but I think we can certainly do more to reduce some of the criticism. The method that I have put in place in this bill is the ability, if collectively we think circumstances are such that a pay rise is not needed, to not have to take it every year just because it is there.

The minister referred to the difficulty or the problems that have come from having an independent tribunal set salaries, but that is how they are set at present; it is just that it is not the South Australian tribunal, it is the commonwealth Remuneration Tribunal. We have this pegged $42,000 difference. So the commonwealth tribunal sets that amount, and then we still have to go to the state tribunal anyway because they are the ones who set the common allowance. That is where the $30,000-odd comes from: the committee pay, the interstate train trips, the metroCARD and travel allowance.

The Remuneration Tribunal of South Australia is already saying to a member who lives in the country that they can get a bit extra to help them get to parliament. Members of big electorates get extra money and the state remuneration tribunal sets that to help them to travel around their electorate and service their members. So I do not think it stacks up, as the minister said, that the state Remuneration Tribunal is the wrong mechanism. It is actually the mechanism that we are using for a lot of the package, just not the whole of the package.

As I said, it is the fourth time that I have introduced the bill before us. I am disappointed that no other member, of the 21 of us on the floor, has chosen to express a view on this.

The Hon. R.I. Lucas: They all agree with me.

The Hon. M.C. PARNELL: It may be that they all agree with Mr Lucas, but I cannot take Mr Lucas's word for that. So, whilst I appreciate that I will not have all the numbers, I will be calling a division on this in the event that I do not get the call from you, Mr President, in favour of this. As I said, I was verballed before, but this is not opportunism or pure pollie bashing or populism; it is actually giving the South Australian legislature the opportunity to lead by example when the government of the day is calling for restraint.

I remember Bob Hawke had his wages accord. There are often calls in the community for restraint. The one sector of society that is not exercising any restraint and is shrugging its shoulders and saying, 'It's got nothing to do with us,' is the people who are making the laws—members of parliament. I am disappointed that it does not look as if I have the numbers today but, given that other parties have not expressed a view, we will test that by way of a division.

Ayes 4

Noes 15

Majority 11