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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-11-29 Daily Xml
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PARLIAMENTARY REMUNERATION (BASIC SALARY) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 23 November 2011.)

The Hon. R.I. LUCAS (15:31): I rise on behalf of the Liberal members to support the second reading of the Parliamentary Remuneration (Basic Salary) Amendment Bill this afternoon. I am sure members will be aware—as, I am sure, would the media, after recent publicity—that South Australian state members of parliament have a base salary which is automatically linked to the base salary of federal parliamentarians and which is $2,000 less than federal parliamentarians. Our other entitlements, such as allowances, are determined by the Independent Remuneration Tribunal of South Australia.

The reason we have this bill before us today is that the government has determined that, evidently, based on advice from Canberra, it is possible that what has been discussed for some time in relation to possible changes in remuneration for federal members—and I note the Hon. Mr Parnell will obviously have a near and dear interest in this with his connections in the federal parliament—there may well be proposed changes which lead to a significant increase in the basic salary of federal members of parliament, but in part paid for by the removal of certain entitlements or benefits (sometimes colloquially referred to as perks).

Some of the benefits and entitlements that have been discussed as part of this trade-off in the federal arena have included overseas travel entitlements and also some element of electoral allowance entitlements. My understanding is that, given that all members federally and statewide have varying electorate allowance entitlements depending on the size of their electorate, perhaps what is being contemplated federally is that some base or threshold level of electorate allowance (perhaps, say, at the level of the metropolitan members' electorate allowance) will be rolled into salary and that country members, for example, who receive a much bigger electorate allowance entitlement, may well still receive the difference between the threshold level and their individual electorate allowance as a further allowance or entitlement.

That has been the nature of the discussion at the federal level. Some others have talked about perhaps rolling in other entitlements, such as entitlement to motor vehicles. At the federal level, as I understand it, a fully operational motor vehicle is received for an annual payment of about $700 or $750. I am sure those state members in this chamber who participate in the state scheme will be quick to remind members of the media or, indeed, others that the equivalent scheme in South Australia is, as I understand it, that members pay for the base entitlement approximately $7,000 for a fully operational vehicle.

There was an issue for the state government if this change was to occur at the federal level prior to Christmas, when the state parliament was not sitting. The current arrangements, I should say, at the federal level are that they have now handed over absolute independence to the Remuneration Tribunal to determine this particular issue. It does not have to, as it had previously, go back for any vote or for some disallowance motion, for example, in the parliament; that is, once the decision is taken, the arrangements in the federal arena ostensibly are the independent tribunal makes a decision and then it goes through and the parliament has no further say in it.

The state government's view here was, if that was to occur, then, under our current arrangements, the salaries of state members of parliament would go up significantly to just $2,000 less than the proposed federal salary entitlement, but at that stage there would not be any offsetting reduction in benefits or entitlements for state members, in part or in whole, to fund the increased salary cost. Whereas the federal members may have received a significant increase funded in part or in whole by a loss of benefits or entitlements, state members would have got the same increase but it would not have been offset in part or in whole by a reduction in benefits or entitlements at the state level.

For those reasons, the state government has taken the position that it wanted to sort its way through that over a period of time leading up to 30 June. Some of us might observe, given that this has been known at the federal level for almost all of this year, why that could not have been worked out before now. I think that is probably a fair observation, but the reality is the government has advised us it has not done that. We are where we are and we are confronted with a situation of needing to address the issue along the lines the state government has proposed.

There are two other broad issues I want to raise. This issue of parliamentary salaries is always a vexed one. There will always be elements within the community—either members of the media, members of the community or, indeed, members of parliament on occasions—who delight in, I guess, making an issue of parliamentary salaries and entitlements.

There have been various proposals in terms of how you best resolve these issues. Over the years that I have been in this parliament, I have seen a number of different models either in use or proposed. We have had the model where we ultimately, each and every time, set the salary ourselves and that was always much criticised. We have had the model where an independent tribunal looked at it. On one particular occasion, when there was a very significant salary increase proposed, there was media and community outrage at the size of the proposed salary increase, so there was pressure on members and the parliament not to accept that.

We have had the most recent model which is locking it into, in essence, a band of salaries which are at the senior levels of the federal Public Service, then flowing on from those increases to federal members of parliament to state members of parliament. The argument was, if federal members were going to get a 3 per cent increase, then state members would get a 3 per cent increase as well. The federal members' original argument was, if federal public servants were getting a 3 per cent increase, then federal members of parliament should get a 3 per cent increase as well. That was the model upon which our current system was based.

Having been in government and having tried to determine the issue, I know of not only the issues in relation parliamentary members' salaries but also ministerial staffers' salaries. It is one of those issues as well. Essentially, the model that was adopted when we were there was essentially to say, 'Okay, what did the state public service get over the last 12 months in terms of salary increases?' and we applied that particular percentage factor to ministerial staffers. The argument was that, if in the end you were paying state public servants a particular salary increase, was there an argument against state members of parliament getting that particular salary increase? That was the same thinking at the federal level at the start of this particular model that we are talking about and the basis of how you actually determine what a salary is worth.

My colleague in another place the Hon. Dr Bob Such (the member for Fisher) and I have regularly done a radio program on FIVEaa. The Hon. Dr Such has always been of the view that it should be done by an independent tribunal after a work salary case. It is my absolutely strongly-held view that, if that was ever done—that is certainly what is being done in part at the federal level at the moment—members of parliament would be by any reasonably-based independent tribunal recommended for a very significant salary increase. I have no doubt about that, and I will put on the record some evidence in relation to salaries in some other areas that exist at the moment.

As I have said to the Hon. Dr Bob Such on a number of occasions, if you had this independent tribunal and if it came up with a recommendation for a 50 per cent increase in salaries, what do you think the response would be from members of the media, the community and, indeed, from some of those members of parliament who support this particular model? They would switch into reverse gear as quickly as you could ever contemplate in relation to an independent tribunal, having done a work value case, recommending a massive increase in salaries for members of parliament.

As I said, based on my knowledge of what members do, their time commitments compared with other professions and occupations, I have no doubt that, if such an independent work value case was done, there would be a significant increase. I also have no doubt that there would be massive opposition to that from members of the media, members of the community and some members of parliament, even perhaps some members of parliament who to support the notion that it should be done by an independent tribunal after a work value case has been undertaken.

Having been the chair of the Budget and Finance Committee for a period of time and having taken evidence from a significant number of public servants over however many years the committee has operated, I just want to place on the record that, looking at the most recent Auditor-General's Report, I have had taken out from the most recent report (which is 2010-11) the number of public servants within government departments and agencies—not all, but most of the bigger ones—who are currently on a remuneration package greater than $150,700.

The current salary for members of parliament is about $140,000, so I just worked it out on the basis of that plus the 9 per cent superannuation. That was the closest salary band that I could ascertain. The number of South Australian public servants in the Auditor-General's Report earning packages above $150,700 was 832. There are 69 state members of parliament. Some of those are ministers and hold other offices, but in terms of the base salary position of state members of parliament, there are 69. There are 832 state public servants earning packages greater than $150,000, and some departments, like education and children's services, have 121 public servants in that department earning more than $150,700.

The Attorney-General's Department has 112 public servants above that particular level, and so it goes on. This is not all the departments and agencies: this is the top 15 or 16 agencies including SA Water, which has 70, and I am sure the Hon. Mr Darley will not be surprised at that. WorkCover has 15. There are 832 of them, and I then went just to three or four of those agencies to look at the individual breakdowns.

The health department has not had its accounts audited for 2010-11 because of the mess of the financial accounts that has occurred there, so I had to go back to 2009-10, and these figures are now almost 18 months out of date. However, 18 months ago, there were 18 public servants in health earning packages of more than $250,000 a year. That is 18 public servants, 18 months ago—so it will be even more now—earning packages of $250,000 or more in the health department.

In Premier and Cabinet, which is a relatively small department in terms of numbers, at 30 June 2011, there were 15 public servants earning packages of $250,000 or more, and going up to the top package of $420,000 in Premier and Cabinet. I omitted to mention that in the health department, there were four employees in 2010 earning more than $390,000. If I move to SA Water—

The Hon. D.G.E. Hood: That's eight grand a week.

The Hon. R.I. LUCAS: Eight grand a week, the Hon. Mr Hood usefully reminds me and other members. If we move to SA Water, an agency of great interest to the Hon. Mr Darley, there are 14 public servants or officers there earning salary packages of greater than $250,000 or more with the highest package being $470,000 plus, and there are about eight earning more than $300,000 in SA Water.

Finally, in the Attorney-General's Department, on 30 June 2011, there were actually 45 listed employees earning more than $250,000 or more. To be fair, a number of those, unspecified, may well have been those who, during the year, were paid out a termination payment, and that increased their numbers, so to be fair I went back to the 2010 number, and the number of employees earning more than $250,000 in the Attorney-General's Department 18 months ago was 26.

I am not going to delay proceedings today by going through what local government CEOs earn. Private executives, as the Hon. Mr Hood can attest, is a whole different world. All I am seeking to do here, I guess, is put on the record the others that are paid for by the taxpayers of South Australia, who are state public servants.

As I have said publicly, and I am happy to say it again today, I have never been fearful of defending the fact that I believe members of parliament should be paid appropriate salaries and allowances. I am of the school that says the bigger the salary, the smaller the allowance. That sort of debate which is going on, I am sympathetic to, but that is a personal view in relation to that issue.

But ministers and chairs of parliamentary committees and others, week after week, are confronted by 832 public servants who are earning more than $150,000 a year from the taxpayers of South Australia. With the greatest respect—and I know that many of them are hardworking as well—in the end, the job that is charged to members of parliament is at a level of determining the laws of the land, the laws of the state, and all of those issues ultimately right across the board.

I, in no way, would ever resile from the fact that I believe members of parliament are entitled to be paid a reasonable salary and package, and certainly one which is at a level higher than the one that is currently there. If that justification can be made for 832 state public servants, then I challenge those who think that state members of parliament are paid too much to put a point of view in relation to the relativity between 832 state public servants and the 69 state members of parliament. In particular, I am talking about those who are not in ministerial positions or higher office such as presiding members in the houses.

With that, I indicate the Liberal Party's support for the legislation. This is not going to buy time, it is just going to delay the inevitable decision. Given the process that has been adopted, it will concentrate the attention on whatever the ultimate decision is going to be over a longer period of time, and I suspect it will make it harder for governments, oppositions and members of parliament in relation to reaching a resolution on this particular issue.

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.

The Hon. M. PARNELL (15:53): The Greens will be supporting this bill. It is a sensible measure that is required to be passed by us as a matter of urgency because the federal arrangements on which our salaries are based are likely to change and, if we do not break the nexus, then there could well be unforeseen consequences that arise from that change. I point out to members that this bill is very similar to one that is currently on the Notice Paper. It will be in the Notice Paper for tomorrow in private members' business; it is order of the day No. 45. It is a very similar bill to this one, and that bill on the Notice Paper now is similar to one that I introduced back in 2009 which has a similar effect. I will come to what that is shortly.

One thing that has struck me over the last several years as we have debated the pay scales for members of parliament and for other public servants is how unfair the system is in relation to how pay rises turn up in your pay packet. A number of members here have probably experienced how we have been out on the steps of state parliament, there have been teachers or nurses or other public servants who have been fighting tooth and nail to get a modest pay rise and yet, when it comes to members of parliament, it simply appears in your pay packet without you having asked for it, without any justification being given for it. It is just there. It just turns up.

I think we need a great deal more transparency in the system. The Greens' approach is fairly simple. The first thing that we would do is break the connection, but not for a six-month period, as this bill proposes. We would break the connection entirely between state and federal MP salaries. The second thing that we would do is put a local remuneration tribunal in charge of coming up with an appropriate salary and making a recommendation. We would put the South Australian Remuneration Tribunal in charge.

The Hon. R.I. Lucas interjecting:

The Hon. M. PARNELL: The Hon. Rob Lucas interjects: 'And you'd accept it, whatever it said.' Well, that brings me to the next element of the Green's bill, and that is that any suggested pay rise from the South Australian Remuneration Tribunal should, in fact, be regulated in regulations and become a disallowable instrument. That would have the effect of members of parliament having the ability, if they saw fit, to decide that the time was not right to receive a pay rise, and it would be disallowable.

The Hon. Rob Lucas, in his contribution, basically observed that, in his experience of these matters and dealing with governments, he does not expect the bill to finally determine the position about state MP salaries to come on until the death knell (I think, were his words), right up until the six months are about to expire. Well, that is the honourable member's prediction. My prediction: I know when we will do it; we will do it on budget day. That is what we have done before, when we give ourselves a rise in superannuation: we do it on budget day. We bring the bill on, as all attention is being paid on the other house to the Treasurer's delivery of the budget, and we will do it then.

I would urge the government to bring a package of measures before the parliament as soon as we know what the final result from the federal regime is; then we should know whether or not the nexus should be severed for good or whether it can keep going. Like I say, the Greens' preference is to sever it for good and to put a local remuneration tribunal in charge of recommending pay rises. For now, we see this as a temporary measure to get us out of a fix, if you like, and the Greens will be supporting it.

The Hon. G.E. GAGO: I would like to rise to make a few very brief concluding remarks, given that there is overall support for this amendment bill and that it is quite a straightforward bill. The bill seeks to suspend until 30 June 2012 the existing arrangements in which the basic salary paid to a member of parliament is automatically linked to the annual salary allowance paid to a member of the House of Representatives of the parliament of the commonwealth. It will ensure that any move to incorporate electorate allowances into the commonwealth parliamentary base salary will not result in any unintended consequences.

We are between a rock and a hard place with this bill in terms of ways to go forward. We believe that this is the best way to go forward, the most prudent way to go forward and the fairest way to go forward in an attempt to not create unintended consequences for South Australian state members of parliament. I want to take this opportunity to thank honourable members for their second reading contributions and for their support for this bill, and look forward to dealing with it expeditiously through this committee stage.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. D.G.E. HOOD: I have a question for the minister. My understanding of this bill is that whilst it breaks the nexus between state and federal MP salaries, the bill is worded in such a way that the return; that is, the re-nexifying—I do not know if that is the right term, I think everyone knows what I mean, however: I like that term, I will use it again at some stage—is automatic at the end of six months. So, there is an onus on this place to fix it within that time period. That is my understanding of the bill. I wonder if the minister could please comment on that.

The Hon. G.E. GAGO: My advice is that your 'hoodification of the nexification' is quite correct, that if nothing else happens the nexus will be automatically defaulted back to its existing form and it is only if some other decision was made by parliament that it would not be defaulted back to.

The Hon. M. PARNELL: What is the minister's latest intelligence on a likely date for the Commonwealth Remuneration Tribunal to finish its work?

Members interjecting:

The Hon. M. PARNELL: I am asking the minister: does she have any intelligence on when that might happen?

The Hon. G.E. GAGO: We have not received any federal updates.

The Hon. M. PARNELL: I think the word in the second reading contribution might have been 'imminent', or a similar word was used. Are we looking at something that is happening this month, next month or next year?

The Hon. G.E. GAGO: The advice I have received is that no date has been indicated, so we do not know.

The Hon. D.G.E. HOOD: This is the last question from me. I wonder if the minister could, as best as she can, outline the process, if indeed there is one envisaged at this stage, under which these matters will be determined over the ensuing months?

The Hon. G.E. GAGO: Basically, it is the federal government that will make a decision and then the state government will need to consider that and respond to it accordingly, depending on what the implications are for us.

Clause passed.

Remaining clauses (2 and 3) and title passed.

Bill reported 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) (16:03): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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