Politicians’
Outrageous
Perks |
This privileged class is living the
high life -- on our money |
In the 1997-98
fiscal year, Australian taxpayers shelled out $349,332 in retirement perks
to Malcolm Fraser who served as our prime minister over 16 years ago.
That's not counting a large lump sum he received in superannuation.
Fraser's lifetime perks include a fully-staffed office, unlimited free
first-class air travel round the country and access to a car and driver 24
hours a day. He spent $109,907 on limousine hire in 1997-98, including
one 15-hour rental that cost taxpayers $1174. All former prime ministers
who have served since 1966 are entitled to the same perks.
THE READERS' DIGEST §§
AUGUST 1999
By PAUL RAFFAELE |
Like all federal MPs, Nick Bolkus is granted over $12,500 of taxpayers' funds to take a "study tour" every three years. He can also carry forward
half of any unused entitlement to take trips to the value of almost $19,000.
Bolkus recently spent his grant on a tour through England and Wales.
The main reason for the visit was to meet Britain's new Labour government.
In 1996 Victorian MPs agreed, in a bipartisan decision, that they should
be entitled to taxpayer-funded electorate cars, and have the option of
customising them. According to newspaper reports, 98 of the 132 members have
since spent at least $220,000 of taxpayers' money customising their Ford
Fairmonts. Labor MP Doug Walpole fitted his with a sunroof, body-styling
kit, alloy wheels and sports suspension. Cost to the taxpayer: $7800.
These are just a few of the taxpayer-funded privileges unearthed by
Reader's Digest during a wide-ranging investigation of Australian politicians'
perks. The investigation is the result of scores of interviews with
MPs and public servants and countless hours of research into official documents.
It shows that, with very few checks and balances, our 822 state and
federal parliamentarians have awarded themselves a range of benefits that,
according to one study, are three times more expensive than those of their
counterparts in Britain and New Zealand.
The cost to the nation is staggering. In federal parliament
alone, the budget to support each of our 224 MPs in the past financial
year was over $1,500,000 -- more than a third of a billion dollars in total.
OVERSEAS
TRIPS are often among the most common and sought-after perks. The
justification by the federal and state governments has always been that our
politicians need to be educated about conditions abroad that may be relevant
to the passing of legislation in Australia. But on many such
taxpayer-funded trips, politicians often take time out for leisure and
sightseeing.
In 1997, former New South Wales Upper House MP Max Willis and another
MP, John Murray, led an 11-member parliamentary delegation on a visit to
California that cost taxpayers $70,000 just for the airfares. The
itinerary, organised by US senators, included a dinner cruise and a visit
to the Napa Valley wine-growing region. Willis also took along his
driver, travelling business class, to manage the group's baggage.
Willis has many rivals in the travel stakes. According to newspaper
reports, Senator Bob Woods took his lover, blonde Liberal Party worker Roxanne
Cameron, on a study trip to Europe. Cameron said Woods justified their
stay in France by reporting that he was "studying wine and cheese."
| In federal parliament alone,
the budget to support each of our 224 MPs in the past financial year was
over $1,500,000-- more than a third of
a billion dollars in total |
In some states, overseas travel is offered via carefully structured
schemes. Victorian MPs can each pay $20 a year to become a member of
the Commonwealth Parliamentary Association. This gives them the opportunity
to join one of eight international tours annually, funded by taxpayers. In
1995, Liberal MP Denise McGill, accompanied by her husband, went on an 11-country
trip to inspect garbage dumps. Along the way the couple took time out
to visit Disneyland, see the musical Miss Saigon in New York and go
on a 12-day coach trip through Europe. In her report to parliament,
McGill said, "One of the things I'll remember most about my trip to Chicago
is shopping at Bloomingdales."
Taxpayer-funded travel perks extend to the Queen's representatives
in Australia, including governors-general. In 1996, then Governor-General
Bill Hayden, a former MP, and his wife flew first-class to London for
a seven-day trip to visit Her Majesty. Sydney newspaper The
Sun-Herald reported that on a previous trip to New York, Hayden ran up
a hotel and limousine bill of close to $25,000. When asked about the
expenses, Hayden told Reader's Digest: "I have nothing on record on this
matter and I do not propose to go to the trouble of seeking to find out."
Travel perks are not restricted to flights. The NSW Legislative
Assembly Members' Handbook, the 60-page manual that lists members'
entitlements, informs MPs that during their term of office they will receive
a gold pass that allows them unlimited free travel on all government railways
throughout Australia. Their partners or approved relatives are each
entitled to four free return rail tickets a year to any destination in Australia.
If MPs have served 20 years or more, they receive a lifetime gold pass.
A premier has to serve only one year in the post to receive this perk.
New South Wales MPs also travel free on government buses, trains and
ferries. And their gold passes admit them to the Members' Reserve at
the Sydney Cricket Ground, horse-racing carnivals and the Sydney Royal Easter
Show. MPs in other states receive similar benefits, according to Ted
Mack, a retired independent MP who served in state and federal parliaments.
In addition to all that, free travel is available to MPs to fly to
conferences and meetings, even those held by their own political parties.
| In 68 days following his election
defeat, former prime minister Paul Keating billed the taxpayer
almost $48,000 for travel alone |
Former prime ministers are accorded special generosity. In two
months following his elections loss in 1996, Paul Keating billed the taxpayer
close to $94,000 for perks to aid his transition into private life.
According to a government document released under the Freedom of
Information Act, in the 68 days following his election defeat, Keating, a
millionaire business consultant, spent $47,855 on travel along for himself,
his wife and staff. In his first year out of office, up until
July 1997, he billed the taxpayer more than $620,000. This included
$l56,602 for chauffeured limousines.
Serving prime ministers get other privileges. With the backing of
their department, they can approve other MPs' special requests. On
February 11, 1997, the federal Opposition asked John Howard in parliament
whether he had supported an upgrade for one of Senator Mal Colston's staff
members shortly before Colston was to cast a crucial vote on the
part-privatisation of communications giant Telstra. Acting on his
department's advice, Howard agreed to the upgrade. "Any suggestion
of bought votes is absolute garbage," he said. Nevertheless, he got
Colston's vote.
Ex-premiers also receive special perks. Victorian Premier Jeff
Kennett introduced a deal to award long-serving ex-premiers, including himself
when he retired, with lifetime use of a car and driver, an office, two full-time
staff and 12 first-class domestic return air fares each year.
Particularly costly to taxpayers is the use of official cars by MPs.
The most recent federal Department of Finance and Administration annual
report shows that VIP transport for politicians, ex-politicians and High
Court judges cost us well over $14 million in the 1997-98 fiscal year.
In Canberra at the beginning of each parliamentary sitting, dozens
of Commonwealth cars line up outside the airport to bear away each arriving
MP. According to Chris Black*, a security guard at Parliament House,
dozens of chauffeured cars in and around the building idle away the
day and, often, much of the night waiting for MPs. "They use
them to go shopping or into town for dinner, keeping drivers waiting about
sometimes for hours," Black says.
________
*Name has been changed at source's
request.
Along with access to official limousines, federal MPs are also allowed
a private car that can be used at any time by anyone in the family. The
MP pays just $711 a year for this privilege.
Not surprisingly, a degree of secrecy surrounds many of the deals
struck for perks. According to the 1996 New South Wales Auditor-General's
Report to parliament, the state's taxpayers are providing Nick Greiner, the
former premier and now a well-heeled businessman, with lifetime access to
a limousine and driver. Greiner copped this perk in a little-publicised
decision made by his successor John Fahey, now the federal Minister of Finance.
During research for this article, Reader's Digest found that many
documents detailing MP travel expenses and allowances were "inaccessible"
-- or unavailable when we asked for them. In some cases, we attempted
to consult figures under the Freedom of Information Act.
That's easier said than done. Early this year, Melbourne's
Herald Sun newspaper asked the federal government to reveal details
of the cost to taxpayers of federal politicians and their staff who travelled
overseas from 1994 to 1997. The Department of Finance and Administration
initially refused the request, claiming it would be an
unreasonable diversion of resources. Later it declared the
search would cost $56,564 to process. When pressed further, the
department revised its estimate, claiming it would now take 62,840 man-hours
to gather the information. The new "freedom of information" cost:
$1,251,995.
Not only do we pay for MPs' offices, cars and travel, we pay for their
holidays. In New South Wales, taxpayers fund two fully-furnished National
Park homes for state MPs. One is a VIP cottage at Pittwater, near Sydney,
that has been available to MPs for $20 per night. Noted the auditor-general
in his 1998 report to parliament: " . . . there must already be a question
mark over the private benefits obtained from the use of public resources."
HOW
DID OUR MPs acquire such extravagant benefits? Simple.
They've awarded them to themselves. Perk upgrades are often pushed
through parliament as part of unrelated legislation, where they remain
well hidden. They are then considered in state and federal parliaments
by Parliamentary Remuneration Tribunals, the bodies responsible for settling
the levels and terms of our politicians' entitlements. Tribunal members
are appointed by senior state officials or the governor-general on the advice
of the governments of the day.
Remuneration tribunals seldom represent a broad spectrum of the community.
The federal tribunal, for example, is made up of three part-timers,
all senior businessmen.
To justify the excesses, many politicians, both state and federal,
complain that they are poorly paid by private-sector standards. But
at a basic $81,856 a year, a federal backbencher earns nearly as much as
a university professor. A federal frontbencher's annual salary is more
than $125,000.
MPs also get a fixed annual electoral allowance that starts at $26,467
and rises to $38,380 in larger electorates. In the past the federal
Remuneration Tribunal defined how this allowance should be used. In
1992, it became self-regulated. Today MPs can spend this tax-free allowance
as they wish.
"If you make a claim in the private sector, you have to justify
it," says Keith Reilly, director of technical standards at the Institute
of Chartered Accountants in Sydney. "MPs must substantiate their claims
too."
TO
TOP UP their salaries further, some politicians have been pocketing
a share of their tax-free travel allowances, which can add tens of thousands
of dollars to their incomes.
Known affectionately by politicians as TA, the travel allowance is
paid daily to travelling MPs based on the cost of a four-star hotel in major
cities and towns, along with meals and incidentals. MPs visiting Canberra
receive $145 a day. Those visiting Sydney and Melbourne get $275 and
$230 a day respectively, with smaller per diems in other places. If
MPs stay with friends or relatives, they still get a third of the allowance.
During the 1996-97 financial year, former federal Minister for
Science and Technology, Peter McGauran, claimed $53,055 for 213 nights away
from home -- reportedly one of the highest TA claims on record. McGauran
later repaid $9200 of the money.
Has anything been done to restore respectability to politicians' benefits? Not much so far. Even when changes are promised, invariably, nothing
happens.
Perhaps the strongest evidence that politicians can't be trusted to
put their own house in order involves the uproar in 1997 over their
superannuation schemes.
In January that year, Reader's Digest revealed that MPs' super payouts
were up to 20 times greater than what they paid into them, and that unlike
ordinary Australians who could only receive pensions from the age of 55,
politicians could get them at any age. (See "Australia's Outrageous Parliamentary
Pensions," January 1997.) A Senate committee inquiry opened the following
month. Since then, Prime Minister John Howard has repeatedly avoided the
issue. When asked in parliament last year if he supported a review
of the MPs' super scheme, particularly relating to payouts before the age
of 55, Howard responded, "I do not think there is any answer that I as
prime minister or anybody in this parliament can give."
| ‘MPs rarely act to curtail their
perks unless there's an outcry, and even then they're practised
in burying their heads in the sand until the storm blows over’ |
"The fact is," says Peter Andren, independent member for the federal
seat of Calare, "MPs rarely act to curtail their perks unless there's an
outcry, and even then they're practised in burying their heads in the sand
until the storm blows over." After he had criticised politicians' perks
on the floor of the House of Representatives recently, Andren says he
was taken aside by a former Cabinet minister who complained about his attacks
on "the club."
If politicians and remuneration tribunals can't or won't bring MPs'
benefits into line with community standards, only the Australian public can
apply the pressure necessary to effect real change. Here's what concerned
experts agree must be done:
The present remuneration tribunals that set the terms and limits of politicians' entitlements must be more representative of the community. "To assess better what benefits politicians should receive, parliaments must ensure
that the members of these bodies represent a cross-section of Australian
society," says Ted Mack.
Perks like travel allowances and subsidised holidays should be identifiable by way of an annual report. "Members list shares and gifts acquired each year in the federal Register of Members' Interests," says Russell Savage,
an independent Victorian MP. "They should add every trip and allowance received at taxpayers' expense."
Expense claims by MPs must be fully substantiated and no money repaid unless they can prove that the expenditure was on genuine electoral business. The same applies to electoral allowances. "This is essential to bring
politicians into line with community standards of financial reporting," says
Keith Reilly.
Details of all expenditure on MPs' perks should be freely available
to the public.
MPs must pay for private travel, and the three-yearly "study trips" for federal members should be scrapped. Administrators must approve only those
trips that independent remuneration-tribunal arbiters deem necessary and
genuinely in the public interest. MPs should be banned from taking
their families with them on official business unless they can demonstrate
it's in the public interest for them to do so. Travel reports should
be obligatory.
Taxpayer-funded travel to attend politicians' own party meetings should be
scrapped.
MPs should be granted a fixed annual car budget. Excess expenditure
on cars must be for their own account. "Federal MPs should make
use of a pool system with one car taking two or three MPs to parliament and
other functions," says Mack. "That alone would save tens of thousands
of dollars every years."
Ex-prime ministers' and premiers' perks must be cut back to a level that
a genuinely representative tribunal agrees is reasonable. Our former
leaders are entitled to be treated with dignity, but their expenditure of
thousands of dollars a year on benefits like limousine hire is grossly
wasteful. The use of official cars and the offices and staff given
to former leaders should be similarly cut back.
There must be an immediate independent review of the MPs' superannuation
scheme. Politicians should not receive pension payouts until they have
reached the age of 55.
Write to your local state, territory and federal MPs, to the
media and to the local branch of your taxpayers' association demanding that
politicians' benefits be brought into line with community expectations of
what's reasonable. Remember, it's your money.
WHAT'S YOUR VIEW of our MPs' benefits? We welcome
your letters for possible inclusion in a future issue. Write to Readers
Reply at the address on page 1.
© Paul Raffaele, The Readers'
Digest, August 1999, pp 19-26
Write to: READER'S DIGEST (AUSTRALIA) PTY. LIMITED (A.C.N. 000 565
471)
26-32 Waterloo Street, Surry Hills, NSW, 2010, Australia
E-mail:
editors.au@readersdigest.com
A similar subject was also publicised in the RD of January 1997, pp 17-23, Australia's Outrageous Parliamentary Pensions, by the same author, Paul Raffaele.
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