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Superannuation rorts

December 18th, 2003

I usually agree with my blogtwin Tim Dunlop, and one of us often beats the other in posting a given idea by a matter of hours. But this time I’m well ahead. Tim endorses Mark Latham’s criticisms of overgenerous Parliamentary superannuation, making the point that

Now that the sort of neo-liberal policies that Latham favours, and that successive governments have championed, have improved the job market so that nearly everybody’s job is as precarious as that of an elected federal politican, it does seem that some adjustment is in order

I had my say on this in 1998.

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  1. December 19th, 2003 at 00:10 | #1

    You should send your piece to Latham – it would put a very keen edge on his wedge. (And I was glad to see you extracted the key line from mine!)

  2. William
    December 19th, 2003 at 08:42 | #2

    I recall a Yes (Prime) Minister episode in which Sir Humphrey wangles a pay rise for the top of the civil service by not only linking MP pay to civil service pay (thereby giving MPs a pay rise), but also MP pensions being calculated as if the MP had been working in the job for life.

    Anyway, isn’t very high MP superannuation instead of higher base salaries? They’d get hell for increasing base salaries, so they instead choose to increase their superannuation?

  3. December 19th, 2003 at 10:18 | #3

    Your wharfies article is superb. I wish I’d read it at the time.

  4. Homer Paxton
    December 19th, 2003 at 10:30 | #4

    The major problem with Pollies superannuation is not the generosity but they can access it BEFORE they retire. I would think it would be pretty easy to only allow pollies to access their super when they are 60-65.

    I have oftened asked Messrs Howard, Costello Stone et al if they are so keen on labour market deregulation then why don’t they target the professions first( which I support) as this would get the biggest bang for their buck rather than blue collar workers.

    I have yet to gain an answer

  5. observa
    December 19th, 2003 at 12:14 | #5

    The issue has largely been one in which politicians face howls of protest in seeking comparitive wage outcomes with equivalent private sector responsibilities. Faced with this, they have taken the easier back-door route of generous super. Latham’s criticism is correct, provided MPs salaries skyrocket to market rates.

  6. John Quiggin
    December 19th, 2003 at 13:40 | #6

    Observa, as I point out in the linked piece, the market price is that which clears the market. The vigour with which elections and preselections are contested indicate that the current remuneration level is above the market price.

    Politicians are relying not on a market price for their services but on ‘comparative wage justice’, a principle that has been abandoned in other contexts.

  7. observa
    December 19th, 2003 at 14:54 | #7

    I’ll take your point John, although it could be said the attraction includes the current generous super provisions. Still it might be an interesting experiment to remunerate MPs the same as local govt councillors and see what turns up. Might turn out to be better value for money.

  8. December 19th, 2003 at 19:37 | #8

    The fallacy in the argument using the (correct) observation that if you pay peanuts you get monkeys is, the reasoer infers that if you don’t pay peanuts something will somehow stop you getting monkeys. There is a confusion between necessary and sufficient conditions.

    But either way, that is not the object of the exercise in the democratic part of the workings of the system. To the extent that special qualities are wanted, ipso facto the system is actually defective; it should be designed to make up the needs elsewhere in the system. In earlier days people recognised that democracy was only part of the whole and weren’t worried that the system needed statesmen – but now that the aim is to have democracy running things as well as being a foundation, it becomes all the more necessary to have the analogue of an automatic transmission in the loop.

    Otherwise one day you might find some George W. Bush or other with some sort of non-mediated direct control…

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