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May 22nd 2013 print

Terry Barnes

Craig Thomson’s Consolation

Certain to be turfed out on his ear come September, the Member for Dobell will leave Parliament with a severance package ordinary Australians can only dream about. If an Abbott government is serious about reducing the deficit, parliamentary payouts would be a good place to start


Politicians are often accused of having their snouts in the trough. Sometimes it looks as if their trotters are in too.


Last week the controversial Member for Dobell, Craig Thomson, announced he was both quitting the Labor Party and contesting September’s federal election as an Independent. Thomson insists this asserts his innocence of charges brought against him over his use of Health Services Union funds before he entered Parliament.

It just happens, however, that losing his seat at the election will ensure Thomson has access to a hidden parliamentary perk: access to a very generous “resettlement allowance” for members and senators who retire involuntarily. If they lose their seats because of electoral defeat or loss of party endorsement – provided no misconduct is involved – a first-term MP who has served three years or less is entitled to the equivalent of three months’ base backbencher’s salary. Longer-serving pollies are entitled to the equivalent of six months’ salary.

Currently the annual base salary of a federal backbencher is $190,000. Affected MPs leaving at the 2013 election therefore will pocket nearly $50,000 if a “oncer”, or otherwise nearly $100,000. First elected in November, 2007, Thomson is in the latter category, as are many of his former Labor colleagues fearing what seems increasingly likely to be a thumping electoral defeat.

And despite 173 criminal charges against Thomson, he will not be tried until after he leaves Parliament, as he surely will without Labor endorsement. Even if later convicted, Thomson will not have to repay his severance benefits, just as he will not necessarily forfeit his parliamentary pension.

But while the federal Coalition flayed Thomson and Labor, it didn’t criticise the lavish severance pay which Thomson will be exploiting. That’s because it was introduced in 2006 by the Howard government.

After Labor’s then-leader Mark Latham’s highly popular attack on the exceedingly generous parliamentary superannuation scheme, John Howard replaced it, for members elected from 2004 onwards, with super more in line with community norms. Newer MPs claimed that this disadvantaged them if tossed out of Parliament and forced to start new careers.

Resettlement allowances therefore are a financial buffer against rejection by voters or preselectors. This somehow assumes turfed-out MPs are washed-up, and deserving special treatment.

How absurd! Being even a one-term member or senator is a very prestigious gig. More often than not being a former MP smooths the post-politics path to lobbying, consultancies, paying directorships and – if your side is in federal or state office – appointment to government posts and advisory bodies. Contact books fattened by years of public life are priceless career assets.

Instead of defending their resettlement allowances, MPs in marginal seats should be prudent like any other worker, putting aside income as they go anticipating a rainy day, and when the time comes expecting no more than the few weeks’ notice given to most other retrenched workers.  After all, they have ample means. Beside their base salaries and generous pension schemes, MPs have lucrative travelling allowances, access to electorate allowances, covered expenses and significant salary supplements for ministerial, parliamentary and committee offices.

And this doesn’t include career fringe benefits of being a federal parliamentarian, including enhanced social standing, media profile, business and first-class travel, Comcar, overseas study tours and delegations, and rubbing shoulders with the rich, famous and powerful.  Whether or not they leave parliament voluntarily, MPs are well-equipped for post-political careers.

Granted, being a member or senator is a hard life, disrupting and sometimes destroying marriages and families. MPs are almost all decent people on permanent call to their constituents, communities and party – although many would privately sympathise with last week’s explosive comment by British Prime Minister David Cameron’s party chairman and Oxford chum, Lord Feldman, that some grassroots party activists are “swivel-eyed loons”.

But while losing any hard-won job is traumatic, MPs somehow have persuaded themselves they’re special. Yet they freely choose their stressful parliamentary life. No-one compels them to stand. Given this, their gold-plated severance gravy jug misguidedly cocks a snook at the everyday Australians that each MP, regardless of party, claims to represent.

Politicians are elected to be leaders, not to be selfish. If taxes must rise to fund worthy new programmes, pollies must practise the restraint they preach. Both major parties could start by ending this self-indulgent perk before the election. Otherwise, serving politicians – including state MPs whose entitlements follow Canberra’s – should explain to voters why giving defeated MPs up to six months’ salary is a perfectly good use of public money.

The tarnished Craig Thomson has a golden opportunity to lead by example by becoming the first MP to reject a resettlement entitlement. After all, he insists he is not being motivated by money!

Other gravy train MP entitlements have been axed or reformed since 2004. Their lavish severance must also be slashed, with savings diverted to eliminating Labor’s deficits.  The budget dividend might only be a couple of million dollars, but the symbolic value of MPs’ sacrifice, both in terms of supporting national restraint and building respect for the political class, would be immense.

Terry Barnes is a policy consultant and former Liberal senior staffer