MPs (Remuneration and Services) Bill submission

SUBMISSION OF DAVID FARRAR ON THE
MEMBERS OF PARLIAMENT (REMUNERATION AND SERVICES) BILL TO THE GOVERNMENT ADMINISTRATION SELECT COMMITTEE

 About the Submitter

1. This submission is made by David Farrar in a personal capacity. I would like to appear before the Committee to speak to my submission.

Overall Bill

2. I submit in support of the bill proceeding. I think its provisions represent a welcome and overdue reform, especially in regard to having the Remuneration Authority take responsibility for most allowances and services, as well as salaries.

Timing of Salary Determinations

3. I propose that the bill be amended to legislate that the Remuneration Authority only review MPs salaries every third year, and publish their determination around three to six months before the scheduled election. The new determination should take effect for the term of the next Parliament.
4. I submit this, not because I think MPs are overpaid and should be paid less. Quite the opposite. I think it is important that MPs continue to receive appropriate remuneration. However the current system of annual increases creates a regular self-flagellation exercise as media and members of the public lash “greedy” MPs voting themselves a payrise (even though that is an inaccurate description of the process), and pressure is put on MPs to turn down the payrise, and/or donate it to charity.
5. The public will never like MPs getting payrises during their term of office. However they will accept that the salary for one term of Parliament will be higher than the previous three year term. In the days of high inflation, there may have been a case for annual payrises, but in today’s environment a three yearly adjustment should still not be too large an increase.
6. They key thing is that no MP gains a payrise during their term office. The salary level for an MP is set prior to the election at which they are elected, and stays for that term. So the public know when electing MPs what the remuneration for the job will be – and candidates will know what the salary is they are elected.
7. I would expect that the Remuneration Authority, if making a determination for a three year term, would take into account the fact it is for three years.
8. I think this proposal is a win-win. It gives greater certainty to MPs, removes the annual flagellation around payrises, and still ensures that MPs salaries are set at the appropriate level over time.
9. The formal amendment would be the addition of a Clause 9(5) which says “The Remuneration Authority will make a determination under Subsection (1) no later than 30 September in the year of a scheduled election, and the determination will remain in force for the duration of the next Parliament as detailed in Section 11.
10. It could be prudent to have a clause detailing what should occur if there is a snap or early election. In this case, one could either have no new determination, or authorize the Remuneration Authority to make a determination prior to polling day.

Deductions for Absent MPs

11. I support the increase in the deduction for an MP absent without leave from the House.
12. The deduction is based on sitting days missed. It is worth noting that if the House is in urgency or an extended sitting, then multiple days may be counted as the one sitting day. This means an MP (for example) could attend on a Thursday yet skip a Friday and Saturday extended sitting, yet face no penalty. It may be wise to define a sitting day as any physical day the House of Representatives is sitting, rather than implicitly the definition used by Standing Orders.
13. I think the deduction could be increased from 0.2% per day missed as with only 96 scheduled sitting days, that means (after deducing the nine days which gain no deduction) that an MP who attended not a single sitting day would only be deducted 17.4% of their annual salary (if an ordinary MP).
14. I also think the nine “penalty free” days is too high, as this is only for MPs without leave, which is simple to obtain. I would submit a better threshold is three sitting days (one week) before deductions begin, and then deductions of 0.5% per sitting day. This means an MP who did not turn up to a single sitting day in 2012 would have 46.5% of their salary deducted, instead of 17.4%.

Frequency of Determinations for Services

15. Clause 29 states that determinations for travel and accommodation services under section 18 should be made once per term, in the first two years.
16. As with MPs salaries, I think it is more logical to have this determination made towards the end of the parliamentary term and apply for the following term. Again this removes the perceptions of MPs gaining some extra “advantage” during a term.
17. I propose Clause 29 be amended so that determinations are made in the final year of a term of Parliament, and that they apply for the next term of Parliament.
18. I support retaining 29(4) to allow for emergency amendments if necessary.

Official Information Act status

19. This bill entrenches the welcome increase in transparency introduced by the current Prime Minister and Speaker over spending by Parliament.
20. Some people have submitted in favour of going further, and bringing The Parliamentary Service under the Official Information Act.
21. I can understand the reluctance of some MPs for this to occur, as it could mean that attempts are made to access (for example) internal communications between MPs and staff discussing political strategy and the like. You could end up with each party OIA’ing the communications and documents of all the other parties in Parliament. Draft policy documents could be OIA’d, for example.
22. A pragmatic solution may be to agree to have the Official Information Act apply to The Parliamentary Service, but only for the purpose of financial documents. This would provide full scrutiny of parliamentary expenditure but protect political discussions and strategy.

Thank you for considering this submission. I would like to make an oral submission in support, and look forward to appearing.