Right: Federal tribunal head John Conde: "It's necessary to have a salary sufficient to attract and retain people of capacity, but no one would suggest that this is a level of remuneration that would rival private sector employment."
 Found a word you're not familiar with? Double-click that word to bring up a dictionary reference to it. The dictionary page includes an audio sound file with which to actually hear the word said. |
Arguments supporting the salaries Australian politicians receive
1. Substantial remuneration helps to attract high quality candidates
Supporters of large salaries being paid to federal and state parliamentarians argue that it is one way of attracting people of high ability into politics. It is claimed that such people may well pursue more lucrative careers in private enterprise, the law or academia if parliamentary salaries were not attractive.
The federal Remuneration Tribunal determines the salaries of federal parliamentarians, judges and secretaries of departments.
It has stated in June 2019, 'The tribunal's primary focus is to provide competitive and equitable remuneration that is appropriate to the responsibilities and experience required of the roles, and that is sufficient to attract and retain people of calibre.' The Tribunal's president, John Conde, offered the same justification in 2011, when defending a salary increase for federal parliamentarians. He stated, 'It's necessary to have a salary sufficient to attract and retain people of capacity, but no one would suggest that this is a level of remuneration that would rival private sector employment.'
Labor frontbencher Joel Fitzgibbon has stated, 'You must pay them enough to attract good people to the career and you need to ensure that the cost involved is covered.' The same point has been made by Nationals backbencher Barnaby Joyce, who has argued, 'To try to attract the best talent in you must have a way to get people out of the private sector.' Mr Joyce, a former accountant, went on to claim, 'If I went back as an accountant I would be paid more.'
Anne-Marie Carroll, managing director of executive recruitment agency Merit Solutions, has stated, 'The secret to enticing the best of corporate talent to the public sector may be about tackling some of the perceived negatives, including lower salaries... not many people will take a third of what they were getting before or even a half; they might take two-thirds.'
In 2004, Peter Phelps, a spokesman for Liberal senator Eric Abetz, stated, 'The salaries that MPs receive are based on the public service and they are set at the lowest of the senior executive service band of salaries.'
Some United States studies comparing the calibre and efficiency of lawmakers in different American states indicate that higher salaries appear to attract better representatives. Peverill Squire, a political science professor at the University of Missouri, has a body of research measuring the impact of salaries on state lawmakers across the United States. Overall, Squire has found that more seats go uncontested when legislative pay is lower (giving voters fewer choices); higher pay allows lawmakers to spend more time on their legislative responsibilities; and higher salaries are more likely to attract lawmakers who hold college degrees. For example, 88 percent of California state lawmakers, who earn $100,113 annually, have college degrees, while only 49 percent of New Hampshire state lawmakers, who earn $100 annually, have graduated from college.
Studies conducted of the Brazilian legislature have shown similar results. Economists Claudio Ferraz and Frederico Finan analysed the educational and professional backgrounds of candidates and found that higher wages increased political competition by attracting more candidates and attracted more educated legislators with more experience.
2. Substantial remuneration increases diversity among politicians, allowing those without wealth to run for office, and makes them less vulnerable to corruption
Supporters of politicians receiving substantial salaries argue that this is necessary to prevent politics becoming the exclusive preserve of the wealthy and in addition to help reduce the temptation for politicians to use their positions for their personal gain.
It has been claimed that if parliamentarians were not substantially paid then only the wealthy would undertake a career in politics. Politics is an expensive career to enter and it takes substantial economic support to maintain a parliamentarian's office and to keep in contact with constituents. Were politicians not well paid then those from lower socio-economic groups would not be able to consider running for parliament or remaining as representatives.
It is in recognition of this that the Australia Constitution guarantees that parliamentarians will receive substantial remuneration. At Federation payment for Parliamentarians was considered as an essential condition of democratic Government in young communities. The Australian Constitution, as written in 1901, guarantees parliamentarians S400 a year. This was more than nine times the average annual income at the time. The justification offered was that having unpaid or minimally paid politicians would have meant that only people who could afford to work for no pay would be able to enter parliament. It was argued that this would endanger representative government as wealthy elites would be less likely to effectively represent the whole of the electorate, including its less privileged members.
The potential for reliance on individual wealth to gain or guarantee a politician's position can be seen with Donald Trump. In June 2016, Donald Trump declared that he had self-funded most of his presidential campaign up to that point.
Most United States presidential candidates do not use public money to fund their campaigns but draw on private wealth, loans or donations. When considering running for president, Trump stated, 'I'd spend a lot...I'd spend whatever it took.' Critics have argued that the need to be independently wealthy limits the type of person who can become president and prejudices the political process in favour of the rich. It has further been argued that if parliamentarians were not substantially paid they would be more susceptible to corruption, that is, to taking bribes or being influenced by contributions from lobby groups. Some political theorists argue that people who feel economically deprived relative to their peers are more likely to take part in unethical behaviour such as corruption. In addition, it has been suggested that when individuals feel they have been unjustly deprived of something perceived as an entitlement, they may develop negative self-feelings that, in turn, result in socially unacceptable behavior or foster the conditions underlying the emergence of corruption. This is referred to as the 'relative deprivation theory' as it relies on feelings of resentment or discontent that derive from comparison with others.
Theorists also consider that politicians may be influenced by need or greed, that is, they may act corruptly because they have a need for the money supplied by bribes in order to support their families, for example, or they may act corruptly because avarice prompts them to increase their personal wealth. Substantial parliamentary salaries are believed to be a partial protection against these motivations for corruption.
Ministerial salaries in Singapore are the highest in the world, with an entry-level minister paid $US830,000 and Prime Minister Lee Hsien Loong earning $US1.6 million. The Singaporean government argues the huge salaries are necessary to prevent the political corruption that afflicts other Asian countries.
This high remuneration rate is referred to as Singapore's 'clean wage system'. On December 2, 2012, The Sydney Morning Herald published a letter from reader Thomas Griffiths, who argued, 'I am a firm believer in overpaying politicians. I would prefer their entrepreneurial spirit remained dampened during their tenure. If you think politicians are shifty, untrustworthy swindlers now, imagine how they would behave if they were short on cash! There would be mayhem as they clamoured to sell coal licences on the side to make a decent wage. The pollies would be hawking their wares and leveraging their resources like drug dealers marking out their turf.'
3. Substantial remuneration recognises politicians' high level of responsibility and large workloads
Supporters of Australian politicians receiving substantial salaries argue that this is no more than an appropriate recompense for their large workloads and complex responsibilities.
In 2011, the Remuneration Tribunal (the independent body responsible for setting parliamentarians' salaries) gave an overview of the 'range, diversity and number of demands' that any parliamentarian has to meet. The Tribunal stated, 'First, they must meet the ongoing demands of their electorate. In many respects - bearing in mind the staff involved; the premises; and, importantly, the intense and continuing local engagement - the parliamentarian is responsible for the effective conduct of a small business.
Secondly, they must attend to their many, increasingly diverse and consuming responsibilities in the Parliament. Without their engagement - and the attention to detail necessary to deal properly with the very considerable flux of issues, legislation and regulation - the processes of federal government would become rapidly unworkable.'
The Tribunal further stated, 'If we are to demand more and
more from our parliamentarians and if our expectations of the quality of their work are to
keep increasing, then we need to remunerate them sufficiently...'
On September 17, 2019, the Victorian Independent Remuneration Tribunal (a newly established body which determines the salaries of Victorian parliamentarians) similarly justified its decision to grant Victorian parliamentarians a salary increase. The Tribunal stated, 'The Tribunal was required by law to take into account a number of factors when making its determination including the roles and responsibilities of MPs, submissions from MPs and the public, what happens in other jurisdictions, wages policy, the fiscal position of the state and current economic conditions and trends.'
Release from the Victorian Independent Remuneration Tribunal_0.pdf The primary justification for the increase in Victorian parliamentarians' salaries is the same as that offered for federal parliamentarians - 'the roles and responsibilities of MPS'.A federal parliament information sheet outlines the role and responsibilities of an MP. It states, 'A Member is expected to be a spokesperson for local interests; an ombudsman and facilitator who deals with concerns about government matters; a law maker; an examiner of the work of the government and how it spends the money it raises from taxation; and a contributor to debates on national issues. If a Member has been elected with the support of a political party (as most are), he or she is also expected to participate in party activities.'
The information sheet further states, 'Members require a broad range of skills to enable them to make an effective contribution across the breadth of their work responsibilities. Individual Members have different sets of skills, developed through education and their work before becoming a Member of Parliament. These may influence where a Member chooses to make his or her main contribution. For example, research and analytical skills are important in committee inquiry work, and in the examination and preparation of legislation; good communication skills are important in all aspects of a Member's work, but are particularly so in working with constituents, in debating legislation and in lobbying. Negotiation skills, organisational skills and problem-solving skills are just a few of the other skills required by Members. As in any field of work, Members develop existing skills and acquire new ones, simply because of the wide variety of tasks they are required to undertake.'
On September 2, 2019, the Speaker of the Tasmanian House of Representatives, Sue Hickey, argued for an increase in the salary attached to her position. Hickey stated, 'I can tell you we're working very, very long hours, seven days a week, and sometimes putting ourselves at great risk.'
Comparisons with private enterprise indicate that parliamentarians are underpaid relative to corporate moguls overseeing companies with comparable budgets. By way of example, former prime minister Julia Gillard presided over a government with annual revenues of more than $300 billion. In the private sector at the same time, there were only five listed firms with so much revenue and they all paid their chief executives far more than the Prime Minister earned. In 2012 the Prime Minister's salary became $495,430 per annum. In 2011, the biggest corporation, Exxon, paid its chief $34.9 million, while the smallest, Chevron, paid $25 million. The biggest Australian-based firms likewise pay their chiefs sums that dwarfed the national leader's income - BHP Billiton paid Marius Kloppers $11.2 million in 2010 and Westpac's Gail Kelly earned $9.5 million.
It has also been noted that Commonwealth Bank CEO Matt Comyn receives an annual salary of $8.36 million before bonuses, while Qantas CEO Alan Joyce's annual remuneration is $24.6 million.
4. Politics is an inherently stressful and unstable career that disrupts politicians' personal lives and creates substantial psychological strain
It has been argued that Australian politicians deserve substantial remuneration because of the instability and strain associated with political life.
Mal Washer, a Western Australian GP who was elected to the federal Parliament in 1998, has stated, 'Politics is an emotionally taxing job if you are dinkum about it. It's an emotionally trying business. There's a lot of depression in Canberra-that is very, very common.' Washer has argued that the work demands and extended hours required by Parliamentary sittings, meetings and committee work make it very difficult for politicians to lead properly regulated lives in which they take care of their physical and emotional wellbeing.
These concerns regarding the psychological strain imposed by a career in politics have been expressed in many jurisdictions. A study published in the British Medical Journal in July 2019, has found that three quarters of British parliamentarians suffer from poor mental health. Members of the House of Commons are much more likely than either the general population or people in other high-level jobs to be troubled by distress, depression and similar conditions, according to the research. Analysis of information given by 146 MPs who filled in a questionnaire about their mental wellbeing showed that 62 (42%) had 'less than optimal mental ill health' while another 49 (34%) had 'probable mental ill health'. Just 35 (24%) had 'no evidence of probable mental ill health'.
Similar statistics have been suggested for Australia's federal Parliament. In September 2011, former Liberal Opposition finance spokesperson, Andrew Robb, who suffers with diurnal mood variation, a form of depression, stated, 'At least 20 per cent of the parliament are taking some sort of antidepressant medication.'
Robb explained, 'For people who are under a lot of stress, like politicians or senior ministers, a lot thrive on that. But others who get a lot of stress, well that can cause a depressive condition.'
The remoteness of Canberra from the electorates and homes of many MPs has been cited as a source of strain that is particularly acute for Australian federal parliamentarians. In an article published in Meanjin Quarterly in June 2017, political commentator Katherine Murphy noted of federal politics, 'Parliament sits for half a year in Canberra. If you are in state politics, you can go home at night. Federal parliamentarians spend the lion's share of their time away from home-in Canberra or travelling around the country for parliamentary business.
For senior players, holidays are brief. Often people are no sooner on holidays, promising their kids and partners their total attention, than the phone rings. A crisis has arisen, they are required back in Canberra. They worry about the impact on their most intimate relationships.'
The strain imposed on politicians' family lives can be very great. Former Labor MP Kate Ellis, who resigned from federal Parliament at the last election to spend more time with her family, has stated, 'Going from having a normal family life to spending a third to half of your time on the other side of the country places a different pressure on your relationship. Even if everyone is behaving themselves, it is still hard to manage.'
Newly elected MPs arriving at the federal Parliament were specifically warned by Mike Freelander, a paediatrician and MP for the suburban Sydney seat of Macarthur, 'Don't lose track of your family.'
Before granting Victorian parliamentarians a salary increase, the Victorian Independent Renumeration Tribunal conducted a general survey among Victorian citizens to gauge their views on the value of the tasks performed by parliamentarians. The politicians who responded to the survey reported work-related health problems, long hours, stress on their families and other relationships and driving more than 36,000 kilometres each year on average on their constituency business.
It has also been noted that the instability and uncertainty of a career in politics warrants higher remuneration. Corporate Governance expert Tom Baxter from the University of Tasmania has stated, 'They have less job security than most positions in that they have a substantial performance review every election cycle. [They] are liable to be sacked by the electorate without any further compensation. It's a high-risk job, it's in the public profile, standing for parliament and sacrificing a lot of their anonymity... those sorts of factors...[should be taken] into account.'
5. Substantial remuneration can improve politicians' performance
Those who support a high level of remuneration for Australian parliamentarians argue that where politicians are paid more highly their performance improves.
Studies conducted overseas have suggested that higher salaries improve politicians' productivity. Peverill Squire, a political science professor at the University of Missouri, has a body of research measuring the impact of salaries on state lawmakers across the United States. Squires research further indicates that more professionalised legislatures (meaning legislatures that meet longer and supply lawmakers with higher salaries and more staff) pass a greater percentage of bills overall and enact more bills per legislative day. Squire also noted that turnover of representatives declines as salary levels increase and that lawmakers in legislatures with a higher degree of professionalisation 'have more contact with their constituents' and 'are more attentive to their concerns'.
Studies conducted of the Brazilian legislature have shown similar results. Economists Claudio Ferraz and Frederico Finan
have found that higher salaries improved politicians' performance in office, as measured by both the number of bills submitted by legislators and the number of bills approved, which they believe may be due to the higher incentive to be reelected.Similar results have been found when looking at the effect of higher salaries on the performance of local mayors in Italy. A study first published in 2008 has suggested that mayors with higher salaries were more successful in decreasing the size of the local government and increasing the efficiency of local bureaucracy. They were better able to reach important social goals in the analysed period.
The study also claims that this effect on performance was mostly driven by the selection of more competent politicians, rather than by the incentive to be re-elected. Higher salaries attracted candidates that had more alternatives in the private sector and a better educational level. Singapore has also been offered as an example of a jurisdiction in which high salaries for political representative and administrators has result in high standards of governance. In 2018, the prime minister of Singapore received a salary of $1.6 million. This is four times the remuneration received by the president of the United States and also nearly four times what is earned by Australia's prime minister. A Singaporean minister's salary in 2018 was $800,000. Ministers also receive a performance bonus determined by the prime minister. Civil servants are also very well paid by international standards.
This high rate of remuneration appears to have had positive results on ministers' performance. Singapore ranks first in the World Bank's most recent Government Effectiveness index; the Corruption Perceptions Index gives it an 85 out of 100, whereas the United States is at only 71; and Singapore comes in second, just after the United States, in the World Economic Forum Global Competitiveness Index.
Marie dela Rama, a lecturer in management at the University of Technology, Sydney, has argued that paying public servants a competitive wage has been intrinsic to Singapore's economic transformation. Dela Rama states, 'High salaries are part of the meritocratic...culture where talent is rewarded, not underappreciated.'