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

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  • 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.
    Tagged with AOLPress/2.0 ™ and to WWW 24 July 1999, (spellchecked 26 Dec 00), last revised on 27 Mar 07
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