Family First Dissenting Report
1.1
In 2004, the Howard Government took a step in the right direction by
putting an end to the outrageous superannuation payments to new federal
politicians.
1.2
This was an action too long in coming and one that did not go far enough.
1.3
The changes implemented in 2004 were inadequate because those
politicians elected before 2004 still continued to remain eligible for
excessive superannuation payouts on their retirement.
1.4
The Parliamentary Superannuation Amendment (Removal of Excessive
Super) Bill 2009 would bring the superannuation entitlements of those
politicians still on the Parliamentary Contribution Superannuation Scheme (PCSS)
into line with more acceptable standards.
1.5
This is acknowledged explicitly by the committee in the report:
The committee notes that while the two sets of arrangements
are inherently difficult to compare, the new arrangements have aligned the
superannuation entitlements of MP's elected post-2004, much more closely with
the arrangements of the majority of Australians.[1]
1.6
Importantly, this Bill would remove the effective golden handshake that
many federal politicians currently receive on retirement and bring all those
politicians elected pre-2004 into a scheme more closely in line with the
broader community.
1.7
Under the current PCSS,
members of Parliament elected prior to 2004 who have completed a minimum of 12
years service or 4 terms are entitled to a lifetime pension upon their
retirement. In the case of members of Parliament who retire involuntarily due
to the loss of preselection or loss at an election, they are able to qualify
for a lifetime pension after completing only eight years of service or three
terms.
1.8
When a member dies, the pension continues to be collected by the
member's spouse for an amount of five-sixths of the entitlement that was
payable to the member.
1.9
According to Ms Katherine Campbell, Deputy Secretary of the Department
of Finance and Deregulation,
The minimum pension is 50 per cent of a backbencher's salary
and the maximum pension is 75 per cent of a backbencher's salary. The amount
that is paid depends on the years of service and there is also an element of
pension paid for extra responsibilities, such as ministerial responsibilities.[2]
1.10
This means that a politician elected prior to 2004 in a by-election who
gets re‑elected on three more occasions and retires in 2010, having only
ever served as a backbencher would receive a pension of $63 000 for the rest of
their life. This is an outrageous amount and a blatant rort of taxpayers'
dollars.
1.11
Furthermore, unlike other superannuation schemes which are exposed to
market risks, and in many cases, have produced negative returns in the 2008–09
financial year, the PCSS has zero exposure to market risks. Instead, this is
borne entirely by Australian taxpayers.
1.12
In response to a question on notice, the Department of Finance and
Deregulation stated:
The Parliamentary Contributory Superannuation Scheme (the pre
2004 arrangements) is an unfunded defined benefits superannuation scheme, where
benefits are based on length of parliamentary service and salary. Member
benefits are not affected by investment returns.
Under the post 2004 arrangements, MPs become members of
accumulation funds (or defined contribution funds) where member benefits are
affected by the level of contributions made by the employer and the employee
and investment earnings on those contributions.[3]
1.13
Australians are tightening
their belts and its time all politicians did the same. The government must
surely lead by example. Just as the government is now looking to tighten those
payments for fat cats who make their termination payments on the backs of
hard-working Australians, so too must the same standards apply to politicians.
1.14
It is hypocritical for the Rudd Government to expect Australians to
accept enormous government cuts in spending on vital services whilst they
themselves remain immune to this pain. The first cuts in spending should be in
pollies' super.
1.15
The next time the Government asserts that it is unable to adequately
fund important community projects, they ought to look in their own backyard for
this money.
1.16
This bill will send a powerful message to Australians that their elected
representatives are not feathering their own nest. Family First is genuinely passionate
about the financial security and welfare of Australians. This Bill offers those
politicians who believe in a fair go for all and who genuinely want to improve
the lives of their fellow Australians the opportunity to demonstrate this
through their actions and not just through their words.
Recommendation 1
1.17 Family First recommends that the bill be passed.
Senator Steve Fielding
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