Wednesday, May 20, 2009

Nero Fiddling Is Just A Distraction From The Fire

There must be a reason for the latest beat up story beating up on the politicians for using their living away from home allowance to pay off mortgages on houses in Canberra. It’s not news, as this has been going on for ages, and in fact was given a run a couple of years ago when Malcolm Turnbull was made to defend himself over this very practice. It’s not even a scam, or a rort. It is merely an allowance intended to provide for parliamentarians to be able to accommodate themselves when required to be in Canberra. So why all the fuss? Is it simply a matter of sensational headlines to sell more papers? Or is it a red herring to distract us all from something else that’s going on?

For those who think that this is just another example of politicians enjoying the gravy train, there will never be an acceptable level of pay or perks for parliamentarians. Any amount will be too much, but of course that view is unsustainable when examined with any kind of rational consideration. The basic rate of pay for a backbencher is currently $127 060 per annum, or roughly double the male average total earnings. It’s a comfortable salary to be sure, but by itself it isn’t going to make anyone wealthy. For the nature of the job and the level of responsibility involved, it is not an unreasonable amount.

Then there is the recently increased electoral allowance, which is supposed to fund community contributions and activities by the member of parliament. Controversy surrounds the practice of allowing politicians to retain any unspent funds from that allowance as taxable income for themselves. It should be obvious that such an arrangement is a disincentive to actually use the funds for the purpose intended, that is in service to the electorate. For that reason, the recent criticism was justified, and a far more satisfactory arrangement would be to require unspent funds to be returned to treasury.

At the same time, the living away from home allowance is specifically intended for the benefit of the politician, putting it into a different category. Rather than running an expense account system where hotel bills and the like are picked up by the taxpayer, which would require the expense and effort of accounting and auditing, the politicians are paid an allowance and left to make their own arrangements, which is arguably a more efficient approach. Given those circumstances, what does it matter whether the politician spends the money on a hotel room, or on a mortgage to pay off a residence in Canberra?

Yes, of course that provides a benefit for the politician, but only if he or she has been smart enough to take this approach. So who would you rather have running the country? People who are smart enough to put this money to productive use for themselves, or who are stupid enough to simply squander it on four star hotels? Or would you simply prefer them to pay for their Canberra accommodation out of their basic salary? Perhaps if the basic salary was significantly above community standards that might be justified, but despite the popular opinion to the contrary, politicians are not overpaid. Sure, it could be said that some individual politicians are not up to standard, but that’s our fault for electing them.

When I am flying in a commercial airliner, I want the pilot to be well paid, because I want him to be calm confident and in control. I do not want him to be stressed out and worried about making his next mortgage payment, or anxious about finding the money for medical treatment for his children. I want him to have his mind on the job. If I am going to have brain surgery, I want my surgeon to be well paid, so that he is not distracted by the fear of having his car repossessed, or his mortgage foreclosed. In the same way, I want the people who are running my country to remain focused on the job and not constantly distracted by the need to make a few dollars on the side.

There’s nothing wrong with reviewing pay and perks for politicians to ensure that scams and rorts are not encouraged, but at the same time there is a need for some balanced perspective. The sort of hysteria that can be generated by sensationalist headlines is all too often a convenient smokescreen to distract us all from far more important issues. That’s why I wonder what’s really going on when such artificial controversies are whipped up in the popular press. I suspect that rather than being distracted by politicians’ perks, we should be more concerned with whether or not they are making the right decisions for our economy, our wellbeing and our future. What really matters is not whether Nero is playing the fiddle, but whether Rome is burning at the time.

No comments: