David Leyonhjelm guest post. Pay pollie a cracker?

Among the many criticisms of politicians that I heard whilst in the Senate, the accusation that they are only in it for the pay and perks, looking after themselves rather than the country and voters, was one of the most common.

Sometimes this arose from dissatisfaction with certain politicians, but more often it reflected disdain for them all. Many Australians are convinced that politicians are paid far more than they are worth. I am inclined to agree with them.

This prompts the question – should politicians be paid at all? Should we treat parliamentary service as a career, as we do now, or is it a form of public service necessitating an element of sacrifice? And if politicians are to be paid, what is an appropriate amount?

In democracy’s ancient home, Athens, eligible citizens all had a civic duty to participate in the governing assembly. There was no salary, although in the fifth century BC an attendance fee was introduced as an incentive.

In the British parliament, on which our democracy is based, service in the House of Commons was unpaid until 1911. Members of the House of Lords, who are mostly appointed, are still unpaid unless they hold an official position. They can claim an attendance allowance plus limited travel expenses, although many do not bother.

Politicians in several US states receive little or no pay for their service. In New Hampshire, for example, state legislators are paid just $200 for their two-year term plus mileage. In Maine, Kansas, Wyoming and New Mexico, state politicians are paid less than what Australian local government councillors receive.

It’s different for heads of government, most of whom are well paid. Top of the list is the Prime Minister of Singapore, at more than a million dollars and over five times the pay of ordinary MPs. By comparison Australia is rather egalitarian; our government leaders are only paid about double what ordinary politicians receive.

But it is the pay of ordinary politicians that agitates people, and on that Australia is generous. A backbench member of the federal parliament receives a package (ie salary, allowances and superannuation) of at least $280,000. State politicians’ salaries tend to be only slightly lower.

This is far more than what most of them earned before getting elected and, more importantly, is much more than what they could earn if they lost their seat. This has a powerful effect on their behaviour.

Not paying politicians would change the types of people who offer themselves for election. In the case of New Hampshire, a 2007 survey found that nearly half the members of the legislature were retired, with an average age over 60.

Perhaps it is reasonable that they be paid something. Being a senator can be extremely busy, as I found. There are not only long days in Canberra but also committee hearings and an endless stream of people seeking help. Most politicians treat it as a full time job and their salary is their sole source of income.

But that need not be the case. While the workload for key ministers is substantial, ordinary MPs have a lot of time flexibility. Indeed, some undertake additional study or write a book, while a few maintain a professional interest (such as doctors) or remain involved in an outside business (as I did).

More to the point, a great deal of the work undertaken by politicians comprises activities designed to help them get re-elected. Being paid a handsome salary with generous expenses while doing this gives them a very unfair advantage over their unelected competitors.

The critics are right – the reason for entering politics ought to be service to the country rather than a lucrative professional career. It should attract people who have done more than navigate their way through a party, work for existing politicians and manipulate numbers to gain preselection. Politicians should have a life outside politics that ensures they are not desperate to be re-elected.

It is difficult to see why political service should be substantially different from serving on the board of a charity or other non-profit organisation, with reimbursement of expenses and possibly an attendance fee. It should certainly not be a better paid job than anything else an incumbent is likely to achieve.

And of course, it should be viewed as a temporary role that will end. And when it does, there should be something to go back to.

David Leyonhjelm is a former senator for the Liberal Democrats

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60 Responses to David Leyonhjelm guest post. Pay pollie a cracker?

  1. Old School Conservative

    Pay by the hours of attendance in the Chamber.

  2. stackja

    MPs won’t vote for it.
    Union leaders expect ALP parliamentary careers.

  3. Dead easy – an incoming politician is paid an annual salary based on his average taxable income for the previous three years of employment (i.e. prior to entering Parliament), indexed annually by the percentage increase that the Fair Work Commission applies to the minimum wage. That removes all the hacks on both sides more or less immediately

  4. stackja

    OSC – Voters expect to see MPs often in their electorate.

  5. stackja

    Step S – Again MPs won’t vote for change.

  6. Yep, pay by the hours worked at Public Service rates, at a rate based on SES salaries. And their terms should not be infinite, such that the driving force to stay in becomes the only driving force. Maybe two terms should be the maximum and then it’s out, at least for another two terms, after which they can try again.

  7. Ellen of Tasmania

    Part time, term limited, less government & fewer kickbacks.

    But as Stackja said – with so many needed reforms – the pollies won’t vote against their own self interest.

  8. Mother Lode

    By comparison Australia is rather egalitarian; our government leaders are only paid about double what ordinary politicians receive.

    They are all ordinary.

    Just, it appears, that some are more ordinary than others.

  9. Rococo Liberal

    I have been arguing for no pay for politicians for years.
    If they are to be paid, let their parties do it, but not out of money received from taxpayers.
    For the last 30 years too many bright people have been sucked into the public sector as pay has increased and government has become more and more pervasive.
    We need to give these people an incentive to go somewhere ni the private secor where they can add value and not just suck on the public teat in make-work wankery that makes no-one’s life much better.

  10. Mother Lode

    It would be nice if their conduct on their watch had consequences on them.

    They are so blase about the money they squander and the imposts they dump on us. Let legislation include a statement as to what it is meant to achieve and let their pay be affected accordingly. All the schemes they have had to create jobs would have them in the poorhouse tout suite.

    And anything that affects ordinary folk but, due to the special conditions of their positions they are spared from should be reflected in their conditions. All their attempted shenanigans with super, for example, that don’t affect them because of their pension schemes.

    And it should be a defence at law that ‘accidentally’ pushing someone into an active volcano, into a building foundation just as they are beginning the cement pour, or throwing a toaster into their baths by use of a catapult outside their house – all accidents, mind – that they were politicians should be a defence.

    I mention the last one because the first two would only last a couple of weeks before they gamed them.

  11. Behind Enemy Lines

    I’m sympathetic to the idea, but it’s yet another systemic reform that can’t be done from within the system.

    Remember too that any new pay arrangement that relies on hours worked or previous salary is going to be gamed to smithereens and will have endless unanticipated consequences (none of them likely to be good). Even fixing pay at something like the national average wage would just see ABS further prostituted in the search for good economic news (witness unemployment figures and inflation).

    On balance, I’d be happier seeing fixed term limits, even with the additional incentives for corruption they invite. After all, it’s not as if present arrangements stopped corruption.

  12. Frank Walker from National Tiles

    Old School Conservative
    #3113066, posted on July 22, 2019 at 3:01 pm

    Pay by the hours of attendance in the Chamber.

    I say pay them $2 mn a year and take away 10k for each day they sit in the chamber.

  13. Mother Lode

    There is the old saying ‘Pay peanuts, you get monkeys.’

    I think the situation we have here in Australia is ‘Lay a feast out in the open and get flies’.

  14. Fred

    Pay them nothing and you’ll only have the Malcolm Turnbulls and Kevin Rudds who don’t need the money.

    I say pay them double. But they are limited to 1 term, and then banned for life from ever working for the government again.

  15. BrettW

    So basically we get a bunch of “representatives” who are over 60 and have enough income from elsewhere to work for free.

    Even better Unions could pay the wages of Union aligned MP’s.

    Call me cynical but isn’t a MP who earns nothing going to be more likely to accept money from inappropriate sources ?

  16. Australia has close to the highest paid politicians AND bureaucrats (particularly senior). This has attracted the wrong people and incentivised them to do the wrong things.

    There are too many who engage in activities to protect their income and entitlements against the interests of those they are supposed to serve.

    If its good enough for juries, who make life and death decisions, its good enough for parliaments.

    Parliamentarians by sortition and payment of a small stipend.

  17. Destroyer D69

    There is the old saying ‘Pay peanuts, you get monkeys.’ Surely the corollary is “employ monkeys, only need to pay peanuts”

  18. Tim Neilson

    Rococo Liberal
    #3113095, posted on July 22, 2019 at 3:33 pm

    I agree with the general proposition. The rise of the permanent political class has been a disaster.

    But….

    We need to give these people an incentive to go somewhere in the private sector where they can add value

    Wayne Swan. Christopher Pyne. Sarah Hanson-Young.

    It’s not a panacea, RL. In some cases the best we can hope for is that they’ll be confined to some sphere where the harm they do is minimised.

  19. Frank Walker from National Tiles

    If its good enough for juries, who make life and death decisions, its good enough for parliaments.

    Parliamentarians by sortition and payment of a small stipend.

    Why yes, of course.

  20. Dr Fred Lenin

    I have been saying for years ,destroy career politics and political oarties . Limit service to five years then out for life .limit political donations (bribes ) to $10 per person or organisation per year . Pollies super self funded and no pension except OAP. Public servants on one year contracts with performance based salaries and self gunded super .pollies salaries based on PS salaries .and no nepotism in staff . Abolishing federal departments which duplicate state functions ,state poliies on same conditions as feds . Local government councillors unpaid ,never mind the bribing ,they do it eeven when they get paid ,councils back to riads and rubbish and public health,no commo virtue shit rubbish paid for by ratepayers or overseas trips ,use the net like your employers do . Judges to bepulled into gear and reminded they are paid employees of the taxpayer ,appointed not annointed sack a few without compensation pour encourager les autres . Theres a start for you .

  21. Imagine what a crooked prick like that Iranian Labor Senator would do if terms were limited and he knew he’d be ousted no matter what.
    The graft and corruption would be rife because they’d have nothing to fear. At least with the current situation, they are afraid of being ousted, which is a type of restraint on their greed.

  22. Boambee John

    Destroyer D69
    #3113150, posted on July 22, 2019 at 4:09 pm
    There is the old saying ‘Pay peanuts, you get monkeys.’ Surely the corollary is “employ monkeys, only need to pay peanuts”

    Pay them big bananas, get overweight gorillas?

  23. The issue is that our politicians are corrupt – both morally, intellectually and financially.
    They are also damn near untouchable.
    What is needed is a robust accounting system that makes them play straight – and with serious penalties for the bullshit like the submarines, the NBN, and the disability scheme.

  24. Behind Enemy Lines

    Baa Humbug
    #3113186, posted on July 22, 2019 at 4:42 pm
    Imagine what a crooked prick like that Iranian Labor Senator would do if terms were limited and he knew he’d be ousted no matter what.
    The graft and corruption would be rife because they’d have nothing to fear. At least with the current situation, they are afraid of being ousted, which is a type of restraint on their greed.

    They already have nothing to fear. Your Iranian Labor Senator isn’t in jail, is he? People like that can make a decades-long career out of milking the public cow every single morning of every single day. Without the promise of such a creamy lifetime deal, we’d get fewer people like him in the first place.

    Put a limit on public office.

  25. Fat Tony

    I am more worried about what other people pay “our” politicians.

    Incidentally, the best mayor in Toowoomba for the past 50 to 60 years was Clive Berghofer – a local succcessful businessman who drew no salary.

  26. Tel

    I say pay them double. But they are limited to 1 term, and then banned for life from ever working for the government again.

    And also banned from ever showing up as “advisers” to sit on committees etc.

    If they want to give advice there’s the SMH letters to the editor section.

  27. Bruce of Newcastle

    The problem is that if you don’t pay politicians they will arrange to pay themselves. And that gets you even more corrupt politicians.

    So you have to pay them ‘enough’. But the amount that people with egos the size of a planet get is never enough. Of course all politicians have egos that size, or they wouldn’t have fought tooth and nail over the dead bodies of their rivals gone into the job.

    Thus they must be paid well. But clearly they will always be out for more, above board or under the desk in brown paper bags.

    The answer is not the amount they are paid for that reason, because they will always be on the take whether legit or otherwise.

    The answer is to watch them.

    People behave ever so much better when they know they are being watched. That is why APRA, ASIC and ACCC watch companies. Company CEOs also have egos the size of a planet.

    So we need something as pernicious and powerful as APRA to watch our pollies. Pollies’ finances must be as transparent as company finances must now be. That is the answer.

    Every transaction by a pollie, big or small must be logged. Every dollar in income. Every pie bought at the shop. Every asset they have, down to the pens on their desk. Everything.

    Since this would be very expensive to do themselves a Parliamentary Accountancy Service would be established and personal accountants assigned randomly to pollies after each election.

    Then they must be independently audited annually, like a company. If they breach the pollie-watch legislation they must be fined stratospheric amounts, and banned from any government job after their service.

    If they can rort the system in such an environment they would be doing remarkably well.

  28. Tel

    Hey Bruce you could have an independent commission to do the auditing, with a charter that ensures neutrality, and a board of directors that can be trusted. Even have a complaints process where they investigate themselves to prove how fair and unbiased they really are!

  29. Dr Fred Lenin

    What was the amount in the Hawke estate ? What was the source of this wealth? Was proper tax paid on this money ? How much is Keating worth ? Questions ,but no answers .
    ( Hawke left his kids$ two and a quarter millions .

  30. Tim Neilson

    Every pie bought at the shop.

    Plus video of their interaction with the pie shop staff.

  31. 2dogs

    Each MP should be allocated a fund. This wouldn’t be new funding, but rather, every contentious item of expenditure should be met from such funds. If some MPs want to fund a particular project and some don’t, they project gets funded only from the funds of those MPs that support it. The other MPs can spend their money elsewhere. Any pork barreling of their electorate gets drawn specifically out of the fund. All their expenses get deducted from their fund. They can set their own salary, but it comes out of their fund.

    A full accounting and public disclosure of each fund should be made continuously to the public.

  32. BrettW

    Seriously Spartacus, you are comparing jury service to years of serving as an MP ?!

  33. 2dogs

    Seriously Spartacus, you are comparing jury service to years of serving as an MP ?!

    The citizens selected by sortition would only serve for one parliamentary session, which is usually only two weeks.

  34. Roger

    Introduce sortition (hat tip dot), with those chosen paid according to their real world income plus travel.

    Would it be any worse than the present polity?

    Senior public servants might even be put in their place.

  35. Grumbles

    I’m with Motherlode… Outcome based reward system.. Pay minimum wage plus bonus… Happy for them all to be on half a million each if annual growth is at 5%…

  36. Nob

    BrettW
    #3113112, posted on July 22, 2019 at 3:47 pm
    So basically we get a bunch of “representatives” who are over 60 and have enough income from elsewhere to work for free.

    Even better Unions could pay the wages of Union aligned MP’s.

    Call me cynical but isn’t a MP who earns nothing going to be more likely to accept money from inappropriate sources ?

    It could still be the least-worst option.

    Right now you have politicians taking money from taxpayers for vanity projects, most egregiously in the area of “Renewable Energy”.

    Creating jobs for as-yet-unknown but soon-to-be mates in the New Licence Rajs strangling farming and industry.

  37. Tel

    Happy for them all to be on half a million each if annual growth is at 5%…

    They can achieve any percent growth if they are allowed to drop interest rates, run up the public debt and pretend inflation is a feature instead of a bug. Well, for a while at least, long enough to collect and retire.

  38. Idontknow

    I think your all wrong!

    Pay polys double, but Goverment bureaucrats only get two one term contract, and can never be in that job again!
    The system would work so slowly, that polys would try to do some of the work them selves, and we the tax payers would never have to hear, speak or see to a poly again! 🙂
    That can not be any worse than currently govern”mental” bureaucracy?

  39. Grumbles

    Tel, they are currently dropping rates, running up the debt and acting like inflation is a feature even if it has resulted in ZERO true wage growth for the last 12 years…. and yet we are not growing much at all.

    I meant real growth anyway, adjusted for inflation.

    5% growth could only be achieved if pollies significantly shrunk the public budget and took the reins and tape off the private economy.

  40. Entropy

    The answer to the corruption problem is transparency and probity.

    Meanwhile, politics as a career must end. Pay them something, I reckon median annual wage.

    And then take a blowtorch to committees. A politician should not be paid extra to be on a committee. Does anyone else on the planet? So aggressive elimination of entitlements is also required. Allowances should be exactly the same as the rest of the public service, and the same scrutiny. In fact the public service should manage it.

  41. Tel

    I meant real growth anyway, adjusted for inflation.

    And who do you trust with the job of applying those adjustments?

    I hear the climate scientists have a lot of experience with adjusting the past … maybe they should be calculating inflation as well.

    What I’m saying is if you have pollies checking up on pollies then you might as well not bother. You can put numbers on it, and they will work the numbers.

  42. Frank Walker from National Tiles

    BrettW
    #3113278, posted on July 22, 2019 at 6:35 pm

    Seriously Spartacus, you are comparing jury service to years of serving as an MP ?!

    Why not? They work for us. I don’t have much sympathy for them.

    What’s more, juries have an awful lot of power. More than a non-government MP in Parliament, excluding hung chambers, who can except in very special circumstances cannot hold judicial power.

  43. JB of Sydney/Shanghai

    Just a thought….China is doing far better than Australia in many ways, and their Government doesn’t seem to have to waste a lot of time on lying to the citizens in order to grab a vote.

  44. C.L.

    Yes, the two-pronged hackneyed whine that 1) politicians and their poor, suffering families make Great Sacwifices; and 2) politicians could earn Far More Money in private employment (LOL) has become a dated great lie that has oozed its way, The Blob-like, into governmental custom.

  45. Texas Jack

    Four year fixed terms, with maximum two terms, a-la the 22nd Amendment, would filter and naturally aerate the swamp, and align self selector motivations better than anything I see written here.

  46. Petros

    Yes we only want wealthy egomaniacs who can self-fund themselves in politics. Definitely don’t want average punters in there. More Kevin Rudds and Malcolm Turnbulls in politics. Yay. FMD there are some morons here.

  47. Kurt

    I think I nice compromise would be to pay them what pensioners get. Then every time some red-green maniac wants to increase the cost of living (esp power prices) it might give them pause for thought.

  48. Change the concept – think of MPs as board members. Limit the number of terms, and pay them attendance fees.

  49. Diogenes

    My suggestions –
    1. reduce the incentive to sit in parliament with a constitutional amendment to limit spending to Cwlth functions as EXPLICITLY laid out in sect 52 – no using the ‘foreign affairs’ powers as a dodge.

    2 is to reduce the size of the senate to the constitutional minimum.

    3- with a much smaller, more focussed, federal govt the workload should decrease, and because transport and technology have improved immeasurably since 1901, the need to have so many HoR seats is reduced (ie the Upper Cambucca RU team has no incentive to lobby the local member for a $1 million upgrade to the changing shed ) & it could easily be halved.

    4 – introduce sortition to senate and allow the HoR to be elected (strict term limits as well). No senator can be a minister, but every minister will need to find a senator to represent them in the senate.

    5 – reduce parliamentary salaries, and link the pay to a multiple of the avg weekly wage , say 1.5 (ie 50% higher) OR a SES1 in the PS – AND get rid of all the electoral allowances etc and make all the things they do with the allowance tax deductable from their salary (hence the multiple – this should solve the only the rich will sit). Cwealth buys/builds a hotel in Canberra & pollies can stay for free for sitting days (ministers can stay other times), if they choose to stay elsewhere – they pay for it( no deduction). One free economy flight to Canberra at start of session, one home (if they want to upgrade or fly more often, they pay for it no deduction). One family flight allowed for swearing in only – otherwise they pay for it. 4 salary bands only – Senator (should be lower than HoR – they should only be reviewing stuff not trying to be reelected) , HoR backbencher*, Minister & PM, with a set formula for the relationship between them. No special allowances for committees etc

    6 – no paid OS trips for anybody but ministers, and these will require a formal vote in the Senate to approve the expenditure.

    *as they need to be elected they need to campaign.

  50. EvilElvis

    How hard is it to come up with a formula regarding government spending as a percentage of GDP, trade deficit and unemployment percentage and apply that to defining pollies wages? If the economy is shit, they get paid the dole rate, if it’s going gangbusters they peak at $300,000?

    The whole problem is they are insulated from reality and the true drivers of prosperity.

  51. Bruce of Newcastle

    How hard is it to come up with a formula regarding government spending as a percentage of GDP, trade deficit and unemployment percentage and apply that to defining pollies wages?

    Easy. Give pollies a pay rise based on the percentage the budget is in surplus. If the budget is in deficit cut their wages by that percentage.

    It’d be awesome how fast they’d suddenly decide that balancing the budget is a Good Thing.

    Once the debt is paid off they can invest in a sovereign wealth fund, which would contribute increasingly to the surplus, thereby giving pollies even more wage rises.

    You would need to apply a tax % of GDP rise/fall correction too so they don’t just raise taxes to get themselves raises in salary.

  52. NuThink

    As Ted Mack said

    The bigger the bait the bigger the shark.

  53. Eyrie

    “Incidentally, the best mayor in Toowoomba for the past 50 to 60 years was Clive Berghofer – a local succcessful businessman who drew no salary.”
    Definitely and from memory the councillors got about $7000 a year for expenses and no salary. The bludgers are paid the same as State pollies now and what a collection of self serving dills and lunatics we have.

  54. NuThink

    A number of years ago there was criticism of the pay of the CEO of Telstra.
    It was defended with the argument that they deserve it if they improve the share price.
    But it was pointed out that the share price was dropping.
    The reply to that was that with the share price dropping the business was harder to run and therefore the CEO deserves more. A real win-win situation.

  55. Mater

    If you don’t want being a politician to be seen as a career, scrap the specialised pension/super scheme that goes with it. Leave the pay as is, scrap the pension scheme and make them elect and contribute to a standard super fund like everyone else.

    Let them make hay while the sun shines but let them also be aware that when the people say “enough”, you’re in the pit stomping hay and making bricks, right beside them. It will deter a great deal of the moochers and will likely encourage them to better the lifestyle of regular Australians when in a position to do so.

  56. Frank Walker from National Tiles

    Petros
    #3113666, posted on July 23, 2019 at 7:05 am

    Yes we only want wealthy egomaniacs who can self-fund themselves in politics. Definitely don’t want average punters in there. More Kevin Rudds and Malcolm Turnbulls in politics. Yay. FMD there are some morons here.

    They should be paid nothing. You’re a moron if you think they earn or are deserving of their income.

  57. Frank Walker from National Tiles

    Diogenes, I like your idea.

    I’m not really keen on limiting the number of MPs and Senators usually but your whole idea is sound.

    As for 1. – I think you mean s 51 (mostly). I am going to see if the LDP will take this on, I was thinking about it the other day. The intent is in the policy but it is not explicit.

  58. Frank Walker from National Tiles

    EvilElvis
    #3113798, posted on July 23, 2019 at 11:06 am

    How hard is it to come up with a formula regarding government spending as a percentage of GDP, trade deficit

    The trade deficit does not matter. It has not mattered since we floated the dollar.

  59. Diogenes

    Frank,
    yes a slip of the finger, not 52 but 51.

    If the scope of the Feds is drastically reduced to basically, Social Security, Defence, Foreign Affairs and Customs (these are the biiiiig ticket items), then the amount of legislation that needs to passed/reviewed is greatly reduced, and the local MHR becomes more a local ombudsman for their constituents, and the amount of time wasted being lobbied by people for things /lobbying the minister is greatly reduced & therefore the number required can also be reduced. The senate can be safely reduced because the amount of legislation will be limited and the amount to be reviewed should be very small.

  60. Old School Conservative

    I am surprised that ordinary MPs have enough spare time to be involved in their own business, write books, or engage in further study.
    Sounds like they aren’t doing enough electorate work and/or skipping Parliament sitting hours.

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