Parliamentary Superannuation Scheme

Parliamentary Superannuation Scheme Senator ALLISON (Victoria) (4.53 p.m.)--On behalf of Senator Lees, I move:

That in the opinion of the Senate the following is a matter of urgency:

This motion calls for the immediate introduction of legislation to reform the parliamentary superannuation scheme--and it is a very important motion. It is a motion that ought to command the support of the entire Senate. I have been pushed to move this urgency motion by the Prime Minister's extraordinary statements last week in the other place conceding that the current parliamentary support scheme is too generous but that it was a problem 'that you will never really solve', to use his words.

That, in my view, is a very major cop-out. It is a cop-out because the public is increasingly calling for politicians to live by the same rules as everybody else. As George Megalogenis, in the most recent of a number of editorial pieces in several papers, said yesterday: The longer the government puts off these necessary reforms for the past, present and future MPs, the bigger the risk that the voters will falsely view Howard's inaction as greed rather than just plain gutlessness.

My motion refers to the three areas where reform of our parliamentary super scheme is most urgently needed to bring it closer to community standards: first, we have to reduce the level of public subsidy; second, we have to ensure that parliamentarians' access to their pensions is given at the same time as everybody else--and that is not before the age of 55; third, we have to ensure that, if an MP is found guilty of an offence against the Commonwealth, they should not be entitled to keep the publicly funded part of their superannuation. These are the minimum reforms needed to quell public anger, and let me go through them.

By anyone's standard, the parliamentary super subsidy is excessive. But it gets worse, because the level of public subsidy depends on how long a member has been in office. So, if a member leaves with less than eight years of service, it is a very low subsidy. With eight years of service, it peaks at over eight times their personal contributions, falling to 4.88 times at 18 years of service and to 3.17 times at 24 years of service.

An accumulation scheme with a fixed government subsidy set at a much lower multiple would be fairer to all parliamentarians and would be seen as fairer by the public--and this is, I think, very important. The public wants to know that their former parliamentarians access their super on the same terms as other people. Here I acknowledge that, under reforms to the scheme, future lump sum benefits after July next year must be preserved but pensions are still accessible immediately. That sort of largess is not available to public servants taking out a pension or, indeed, to any beneficiaries under pension based superannuation schemes.

This early access to pensions again adds to the unfairness between different groups of members and, whilst I acknowledge that it is perfectly legal, under the same scheme I do not think it is appropriate that a former member after nine years of service can be entitled to an indexed pension for life of $45,000 a year at, say, 35 years of age. Pensions like lump sums should not be accessible until age 55. However, we accept that some form of retrenchment benefit might be appropriate for a short period after a member loses their seat.

The third reform is to address fairly and squarely the issue of access to publicly funded superannuation benefits where the former parliamentarian has breached public trust and committed some offence against the Commonwealth. Again, the public is entitled to be outraged that a parliamentarian, like the former member for Parkes, can be found guilty of misuse of Commonwealth funds and still be entitled to superannuation benefits worth around $1 million, 85 per cent of which is funded by the public. Reforms to allow superannuation entitlements to be frozen where a former member is charged and then allowing only refund of personal contribution if the former member is found guilty, I believe, are essential. If a former parliamentarian is found to have breached public trust, then the public should turn off the 'subsidy tap', as it were. As Mr Megalogenis puts it, this should deter anyone else who thinks they could get away with false travel claims.

There are other reforms which should be made, many of which were discussed in detail by the Senate Select Committee on Superannuation. The information is there and available on the failings of the scheme; and the information is there that the public regards the superannuation scheme as a rort and that reform could help restore faith in politicians in this country.

What is lacking, however, is the will. In response to a question from Mr Peter Andren, the Prime Minister acknowledged that a review of the scheme should look at the level of subsidy, the age 55 preservation issues and the issue of people convicted of criminal offences. He said he did not close his mind to a review, although we have already had a review. But then he said, 'You could never really solve the problem and you will not solve the anomalies of this within a short space of time.' It is now 15 months since the Senate superannuation committee brought down its report containing all of the information the government needed to develop a reform response, and we would argue that 15 months is more than a reasonable time to fix the scheme. The government's response is just not good enough.

Passage of this motion will help to show the government that calls for fixing the scheme are not going to go away. The super scheme is a rort, the Senate should label it as a rort and the government should be called upon to fix it.

Following extensive responses from Senators Watson, Faulkner, Gibson, Brown, Ferguson--

Senator ALLISON (Victoria) (5.51 p.m.)--What an extraordinary debate. How amazing it is to see the immediate unity between the two major parties when it comes to the question of tampering with their entitlements. Obviously we have hit a very raw nerve.

We will continue to do that. It has now been 15 months since the Australian Democrats first moved on an inquiry into parliamentary superannuation. We acknowledge that this is a complex issue; there is no doubt about that. However, 15 months is a long time in which to consider the complexities and in which to do something about the scheme's extraordinary generosity.

Let me turn quickly to Senator Watson. Senator Watson has a greater knowledge of this scheme than probably anybody else in this chamber. He does identify some of the problems with it. He says that it is very generous and high compared with community standards. He draws attention to those members who stay just long enough in order to qualify for it. He also draws attention to the fact that those who are here for a shorter time--whom he encourages, strangely enough--do not qualify.

I think that to talk about the fact that when this scheme was put together life expectancies were shorter and terms in parliament were longer, and therefore things have changed, is an admission that we need to do something about it, and this is the reason we have this problem. We have different periods of time and different ages when members are retiring. That is one of the important reasons why we need to have proper reform.

Senator Faulkner's extraordinary attack on the Democrats, Senator Lees, me and everybody else he could think of and his calling this a publicity stunt is really amazing. He fails to address the substantive question, concentrating mostly on the question of the criminal provisions in the motion, and he fails to look at the question of the generosity of this scheme. He accuses the Democrats of putting forward a simplistic motion--

Senator Faulkner--But you agreed with my amendment earlier. You dope!

Senator ALLISON--We have already talked about the complexities. The report of the Senate committee does talk about the complexities. I urge Senator Faulkner to look at that report. (Time expired)

Parliamentary Superannuation Scheme