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Allowances or open entitlements? When politicians play and taxpayers pay

Federal politicians can rack up relatively large bills in going about their day-to-day duties. In the last six months of 2012, Julia Gillard had allowances totalling A$647,000 – that’s nearly three times…

Parliament provides allowances to assist members and senators carry out their duties but should it include going to the football? AAP Image/David Crosling

Federal politicians can rack up relatively large bills in going about their day-to-day duties. In the last six months of 2012, Julia Gillard had allowances totalling A$647,000 – that’s nearly three times her annual salary. Tony Abbott recorded $530,000, Wayne Swan cost $545,000 and Julie Bishop a cool $390,000.

Parliament provides these allowances to assist members and senators to carry out their duties as elected representatives in their constituencies. They can claim for legitimate “costs” of doing their work effectively and taxpayers meet the bill.

But parliamentarians often refer to these allowances as “entitlements” – as the covering statute is entitled – implying they are entitled to spend these amounts, which are paid on top of generous salaries, often without capping limits on their usage.

So what are they entitled to, and why the confusion?

What are allowances for?

In previous times (decades ago) politicians did not have large entitlement allowances. Their travel to the parliament (federal or state) was usually arranged by the parliamentary staff (rail historically, then flights), and they may have had a small electoral office and a limited budget for mail or landline phones.

But as time went on, the range of allowances was extended to include a whole series of tangible benefits to members – including daily expenses, travel allowances, overnight accommodation, domestic and overseas travel, use of Commonwealth cars, electoral vehicles, hire cars, taxis or subsidised private vehicles, and even unlimited flags and national symbols.

In the last six months of 2012, Julie Bishop had expenses totalling $385,000. AAP/Dan Humbrechts

Reviewing the generosity of allowances may not turn out as we might expect. In fact, when reviews of allowances are undertaken they often justify increasing various amounts because of rising expectations about the extent of activity the public might expect, such as representation at overseas functions or fora.

What are the rules?

The rules governing allowances are set down (in law) and are fairly prescriptive in terms of types of allowance and what activities can be claimed: domestic or overseas travel, cars, charter travel, office and administrative costs, telecommunications expenses and purchase of goods and services.

The rules are relatively transparent, require receipts for reimbursement, and are sometimes very prescriptive (members, for instance, cannot claim overnight expenses if scheduled meetings finish three hours before the last flight), and sometimes with fixed annual limits (such as basic electoral allowances, which range from $32,000 to A$46,000).

Since the late 1990s, the rules have been administered by a special section within the Department of Finance – the ministerial and parliamentary services division. It processes claims that are made by ministers and parliamentarians (or their private offices), and can if requested provide “advice”.

But it is not really an arbiter of what is appropriate – and so far as I can discern, only the Remuneration Tribunal can make definitive decisions about the legality or otherwise of proposed claims.

But parliamentarians are notoriously frugal and some are very tight; they’re not averse to getting the taxpayer to pay for their indulgences.

And given recent media coverage some are sailing close to the wind in creatively making claims about their political business. Recognition of this weakness by parliamentarians themselves has led to a rejection of any proposal that oversight should be handled within the legislative rather than executive (within the Department of Finance).

Why the uncertainty?

One of the problems with the present system is that there is no clear definition of what is and what isn’t “parliamentary business” or politicians exercising their rights to interact with their constituents or the wider community.

Kevin Rudd enjoys a ‘community engagement’ AAP/Lukas Coch

Going into a pub and shouting drinks can be a community engagement; spruiking a book you have written around the country can be communicating your message to the electorate. Buying books you are interested in owning as a reader can be seen as informing a politician.

Taking holidays to the snow or sunny climes, or visiting desirable foreign cities, can be classified under the nomenclature “parliamentary study tour” to broaden the mind. Many state politicians take regular holidays at taxpayers’ expense and put in silly half-page “report” on what they have discovered (one once remarked that sandwiches were bigger in one state he visited than his home state!).

In one sense, what politicians claim is largely made up of institutional costs: running electoral offices and necessary travel to parliament and so on. But other areas are grey and left open to interpretation, especially optional travel, attendances at sporting or cultural events, purchases of goods or publications, and hospitality.

Where the line falls between personal expenses and parliamentary business is very much down to their own discretion. And unless challenged by the Tribunal, any claims made will be paid within the stipulated limits.

The public could be forgiven for believing that if a politician got away with one bogus claim, it would only encourage them to make even more outrageous claims – and there was not much sanction if caught out or exposed (repayment of the disputed amount).

And if both sides, or all parties, are at fault there is no mileage in exposing one’s opponents for fear of retribution, with notable exceptions when vengeance over-rides consideration of consistent leniency – as in the Slipper case.

So, what’s the solution?

What else could we do to make the system better and less open to rorting?

Making the rules more prescriptive is one option but there are many eventualities to cover and rules can’t cover everything.

Another suggestion is to make politicians pay double if their claims are rejected – but relatively few actually are rejected given the lack of definitional precision.

Another is to pool funds to each party as they currently do with staff entitlements – so the party can prioritise their most preferred expenditures.

Yet another is to establish a specific oversight body. I doubt whether such a body would make all that difference – and could become compromised if it took a hard line against some marginal claims which could be justified (such as appearing at a sporting event).

When it comes to claiming expenses, there’s no real arbiter of what’s appropriate. AAP/Paul Miller

Schemes to allow politicians to transfer back into salary any residue in nominal allowances is prone to perverse behaviour and politicians hoarding resources.

So finding the appropriate balance is hard to do. Perhaps media spotlight is the best method of control providing the media regularly investigates and publicises excesses.

It’s interesting that many of the so-called abuses coming to light now are very old claims going back some years. The media at the time paid scant attention; and are perhaps only paying attention now when the adversarial politics of recent years has gone off the boil and they are bored with Abbott’s honeymoon period.

Don’t hold your breath over major reforms emanating from parliament on this issue – it is one of their juiciest privileges.

Join the conversation

30 Comments sorted by

  1. Gil Hardwick

    anthropologist, historian, novelist, editor and publisher at eBooks West

    Sorry, but I don't go along with all this extra argy-bargy over political leaders rightly showing their official support for sporting and cultural events in this country. It's tremendously important that they do so; the return on the investment highly significant.

    The amounts of money involved by contrast are trivial, nit-picking, when it's not as if they're off work and going to the footie. It's not leisure, it's part of the job we expect them to do. What do people want, for all pollies to stay away altogether, not support anything, just because it costs a few quid to get them about?

    This particular round came out of a bitch by Nick Xenophon over Tony Abbott, when Anthony Albanese came out unexpectedly to say he didn't have a problem with it.

    Next thing we all know, suddenly it's a split in Labor ranks, and took off in all directions.

    I mean, anything to beat up a bit of 'news', something to chatter and gossip about.

    I mean, who gives a toss?

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    1. leonie wellard

      retiree

      In reply to Gil Hardwick

      I give a toss , Gil. What would be preferable,and cheaper for the taxpayer, would be to double the salaries of all parliamentarians. All expenses would then have to come out of that salary.......if they overspend on "study" trips ( for eg) then too bad for them. It's also a great saving to the taxpayer by reducing the workload of public servants in monitoring the "rorts".

      If parliamentarians elect not to spend their additional money on work-related matters, then I'm sure the electorates would kick them out next time round for not doing their jobs.

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    2. Gil Hardwick

      anthropologist, historian, novelist, editor and publisher at eBooks West

      In reply to leonie wellard

      Sure, Leonie, whatever system we have in place is fine with me.

      If you're worried about rip-offs I'd rather see far more oversight of corporate executive perks in the multi-millions than be worrying too much about pollie's perks in the thousands, assuming these are in fact perks.

      I have spent years on boards and committees, at times spending several millions of public dollars, and I know from first hand experience what an arduous, thankless task it can be especially working in a fish bowl where…

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    3. leonie wellard

      retiree

      In reply to Gil Hardwick

      Hi Gil, I wouldn't compare public company "rorts" with the spending of taxpayer money by politicians. In my working life I was responsible for a lot of program money in a fed govt dept and, rightly, it was strictly oversighted by others up the foodchain.
      Pollies should be no different.

      Like you, there were many times in my life when I was unpaid for owed days and o/time. It came with the territory and I don't think it's asking too much of pollies to be circumspect with their work related spending of public monies.

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    4. Trevor S

      Jack of all Trades

      In reply to Gil Hardwick

      "showing their official support for sporting and cultural events in this country"
      Calling bullshit on that. I find their attendance as "official" in work time repugnant.

      " It's tremendously important that they do so;"
      Not to me it isn't and I would rather they didn't.

      "I mean, who gives a toss?"
      I do. I find it repugnant.

      The only "solution" of any sort is the disinfectant of sunlight but they have recently taken that away :)

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    5. Phil Dolan

      Viticulturist

      In reply to leonie wellard

      I think if you halved their salary and gave no allowances, there would still be a queue trying to get into parliament.

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    6. David Roth

      Postgrad History Student

      In reply to Gil Hardwick

      Gil, what 'return on investment' are you talking about? I accept that politicians get a personal ROI (i.e. more votes) for attendance at sporting and social events, but it is a very dubious claim to imply that there is a public benefit. If it is always part of the job (a very contestable assumption), then a tax deduction may be appropriate, on the same basis as other Australian workers. My principle is simple. No public subsidy for attendance at private events for members of all parties.

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    7. Gil Hardwick

      anthropologist, historian, novelist, editor and publisher at eBooks West

      In reply to David Roth

      You forget the parliament is sovereign . . .

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    8. Stephen H

      In a contemplative fashion...

      In reply to Gil Hardwick

      If we don't care about these allowances, then why was there any fuss about Peter Slipper?

      More importantly, I care because it shows what our politicians really mean when they talk about "tough decisions" and "in this together" and "sharing the pain". I care about hypocrisy, and about politicians wasting my money. I care about politicians claiming that going to the footie grand final is "work".

      If politicians are not getting paid enough, let's increase it. Enabling such an increase by way of "allowances" or "entitlements" is just encouragement to dishonesty. Our politicians are already quite capable of showing how corrupt they are without having open season on allowances.

      The media should be paying more attention to these claims.

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    9. Jack Arnold

      Polymath

      In reply to David Roth

      Uhm David ... did you know that politicians have been able to claim child care as a legitimate full tax deduction against their income while all other workers do not qualify. It has been so since the early 70s.

      Now just what should be the benefits of working for the good of the community? Or is representing the best interests of foreign corporations the only requirement for politicians?

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    10. David Roth

      Postgrad History Student

      In reply to Jack Arnold

      Yes, Jack, I was vaguely aware. And I agree that child care deductions should be allowable for all Australians. My point about tax deductibility is that politicians then have to exert more financial discipline.

      <<Now just what should be the benefits of working for the good of the community?>>
      Not sure what your point is there, but I definitely don't think pollies attendance at private functions or sports events is for 'the good of the community', perhaps excepting the Prime Minister at major sports events. If people want to speak to a pollie, they can phone, email or call at their electoral office or Parliament. Or the pollie can call a public meeting.

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    11. Jack Arnold

      Polymath

      In reply to David Roth

      David, as a young aspiring student I attended a Notional Party function to speak to my pollie, one Sinkers Sinclair. An unelected political hack told me to "bugger off" because I had to pay to attend the function if I wanted to speak to Sinkers.

      Otherwise the only time that we saw Sinkers in public was during the week before the election when he would make a grand entrance into the local pub for his tri-annual single beer.

      When we elected Tony Windsor to the Australian Parliament we made it a non-negotiable condition that constituents would NOT have to pay to speak to their pollie. The same applied for our Independent NSW MP. Both Independents were freely available to constituents by appointment and at public functions in the electorate.

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  2. Henry Verberne

    Once in the fossil fuel industry but now free to speak up

    I hope, but do not expect, that pollies will desist from the use of this issue for political point scoring and attempts to blacken the characters of their opponents.

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  3. Garry Baker

    researcher

    Media spotlight, and an open book on freedom of information access, is by far the best key. Far too many of these born to rule types become arrogant with their spending of tax dollars, and none would ever give a thought to just how many hours, say, a hospital nurse, would have to work to find enough tax money to fund these politicians private jaunts.

    Sure, these expenses funded per capita of the total taxpayer population may be small, but that's not the point - whereas up-close and personal with…

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    1. Gil Hardwick

      anthropologist, historian, novelist, editor and publisher at eBooks West

      In reply to Garry Baker

      What you fail to acknowledge, Garry, and John, is that we elected them to govern.

      We did not elect a bank teller to handle our money or a nurse to nurse us, they applied for the job at the bank or hospital and doing it well will inevitably become a bank or hospital manager.

      When I go into a bank or hospital I have no right to choose which teller will serve me, or which nurse will administer to me beyond trusting they will carry out instructions from my doctor.

      They do not have to suffer…

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    2. Garry Baker

      researcher

      In reply to Gil Hardwick

      Not quite sure of that logic Gil. It is the born to rule tribe who positioned themselves to be - as you say elected. Once in as a member of that tribe, or rather, just a few tribes, they rarely go away, and thus they have a job for life. Even though they may not be in a position of executive power, tribal life is now their vocation.

      Unlike a bank teller being a servant of the bank - these 3rd raters are "our" servants, given that taxpayers hand them a pay packet. Therefore it is justified…

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    3. Gil Hardwick

      anthropologist, historian, novelist, editor and publisher at eBooks West

      In reply to Garry Baker

      The "born to rule tribe", yes, or as Lindsay Tanner called them, "the political classes", who cut their teeth in the back of a comm car, or some union office, we know about them.

      You saw them trounced in 7 September last, which is the very point I made.

      Getting rid of them finally, on the other hand, merely reinforces the admonition on electing effective representatives and allowing them to do their job properly.

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  4. John Kelmar

    Small Business Consultant

    Politicians should not be claiming extra for travel, meetings, functions, and kissing. These expenses should be paid from their own pocket, as they are receiving an income far in excess of their skill level and function.

    They need to live like the average Australian, and not put themselves on a pedestal to appear as Gods, when they behave in an abominable fashion, and refuse to listen to the people in their electorate.

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    1. Garry Baker

      researcher

      In reply to John Kelmar

      Especially kissing - and if they contract medical problems from it, then it is they who should fund the fix.

      Also on the flip side, if they are found to spread a contagion from their predilection to kiss objects to gain some media attention - babies, for instance, then they should bear the childs recovery costs. Heaven forbid, getting a taxpayer funded kiss of death from Kevin Rudd would have been a harrowing experience for anyone.

      There's a growing public opinion that these politicos are nothing special at all...Indeed mostly inept public servants, elected by taxpayers to improve their lot in life, which clearly they haven't been doing. So cheating on their employers is just not on.

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  5. Terry Reynolds

    Financial and political strategist

    This topic only became newsworthy because the man that the Coalition nominated to be Deputy Speaker after the 2010 elections, Peter Slipper, elected to become Speaker when the opportunity arose and the Opposition were bitter it lost his vote in a hung parliament. No one seemed to care that Peter Slipper after 25 years in Parliament was deserving of the job and in fact did a good job as Speaker.

    The Coalition was so bitter and twisted over it they did everything possible to disparage Peter Slipper…

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    1. Mitch Dillon

      logged in via Facebook

      In reply to Terry Reynolds

      mmmm. I certainly cant claim expenses to attend triathlons/ iron man competitions. I dont see why the prime minister should either. When he competes he sometimes has a couple of bodyguards with him. Are we paying for their time as well?
      In addition iI'm particularly interested in where he gets the time to train for these things. Commitment required for a 20 week ironman training regime can be up to 3-4 hrs per day, and it's exhausting. Is that one of the reasons why we dont see or hear much of him?
      I'm not denying the man his right to compete, but I have always wondered if it's a bit self-indulgent to be balancing the demands of the job of PM with the heavy training commitments of ironman?

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    2. Phil Dolan

      Viticulturist

      In reply to Terry Reynolds

      Say absolutely anything, accuse your enemies of everything even what you are guilty of yourself to win.

      Who was it during the republic debate that said that you can't trust politicians?

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  6. Paul Prociv

    ex medical academic; botanical engineer at University of Queensland

    Whatever is done about this, please don't raise their salaries as compensation for any loss of "entitlements". Their life-long superannuation pensions are based on terminal salary times years of service, so the country will be footing an even more huge bill to maintain these extravagant life-styles.
    And I didn't ask them to take on the job - they pleaded with me to vote for them; none of them was satisfactory, but I still had to vote for one, and they still got the job!

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    1. Jack Arnold

      Polymath

      In reply to Peter Ormonde

      Thanks Peter, it seems our own Bumbling Joke, the member for Rinehart, has been spending freely while living in Queensland. Is it possible to get the itemised details of pollie expenditure, like the reason for the expense (eg return air fare from Indian wedding)

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    2. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Jack Arnold

      That's really the nub of the issue Jack - without detailed diary entries we are left guessing as to what they were actually doing. Only when the sense of entitlement is such that they feel no pangs of conscience openly claiming for a wedding or a triathlon do we get a clear picture of what we're paying for.

      Your smarter operators will claim some worthy purpose - say a 20 minute public duty opening of a section of asphalt while they arre in reality on their way to lunch with some shock jock…

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  7. Peter Hindrup

    consultant

    Abbott, or as did Howard, who stuck his head in front of every camera at sports meetings, what value are they adding to the event? It is a seat, plus however many hangers on, that the venue cannot sell, but nobody goes to cricket to see Howard, or Abbott/Gillard/Rudd — or any other politician. Comes to that, how many people would cross the footpath to see a politician?
    The only ‘value’ that I can see is politicking, that is campaigning for votes, next election. Abbott at the charity events, does…

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  8. Garry Baker

    researcher

    Given that Tony Abbott has a long time penchant for donning the lycra and going for a ride, then why on earth should his lifestyle be funded at taxpayers expense. Try that with any corporate entity, or for that matter the ATO, by claiming it as a legitimate tax deduction, and it will be a rude awakening. Indeed a mere suggestion of this being normal with a given taxpayers thinking, could well invite a much larger audit of ones affairs

    Though the disturbing thing is this has been going on for…

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    1. Peter Hindrup

      consultant

      In reply to Garry Baker

      Imagine if any non-favoured nation president was reported to be running up these sort of 'expenses'! He would be the biggest crook, 'ripping off his people'.
      Australian politicians do it and it is 'legitimate'.
      Double standards anybody?

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