Friday, September 25, 2009

Times Are Tough, But Not At The Top

It’s always easy to take a cheap shot at politicians receiving a pay rise because of the widespread perception that they do so little to earn it. Never mind that the decision is made by the independent Remuneration Tribunal, never mind the obvious logic of keeping up with cost of living increases, and never mind the bizarre fact that politicians are in many cases paid less than the public servants who answer to them. Every time a pay rise is awarded for politicians there will always be the usual chorus of disapproval, and the decision announced this week is no exception.

The Tribunal has awarded an increase of 3%, which will lift a backbencher’s salary to just over $130 000 a year, and the Prime Minister’s income to about $330 000. This compares to an average increase in wages across the community of about 4%, so it’s not exactly extreme. It’s even more modest when compared to the recently publicized 10% plus increase in average pay for top corporate executives. But there is one very important difference this year which provides much greater than usual justification for the criticism. This is the year when the so called Fair Pay Commission told low income earners that there would be no increase at all in the Federal Minimum Wage. None. Zip. Nothing. Zero.

The Commission explained its decision by telling us that it was “intended to protect jobs and to support a stronger recovery in employment as the economy picks up”, conveniently ignoring the increases to the cost of living over the preceding year. Effectively, we were told that times are tough and sacrifices must be made. Well it’s pretty clear now just who is expected to make the sacrifices. It is the low income earners who will receive no pay rise at all under the Federal Minimum Wage, and it is the workers who have had their hours reduced or who have been asked to go from full time to casual to keep their jobs while the boss still enjoys an increase to his income. It is the unemployed who are still asked to survive on $228 a week, after an increase of just one dollar a week after the most recent indexation.

There are some who suggest that politicians are not paid well enough to reflect the nature of their responsibilities, and that paying a rate more in keeping with corporate pay might attract a better caliber of politician. That’s a separate argument, and may have some merit, especially if it was introduced along with other reforms to remove the vast array of rorts available through allowances and other benefits. But let’s not kid ourselves. The corporate world is not necessarily the paragon of good practice in such matters either. Paying $30 million to Sol Trujillo didn’t exactly ensure that Telstra got a better caliber of executive, and that’s just one example among many.

The bottom line is that the politicians we elect are supposed to be there for our benefit. They are supposed to uphold our rights and freedoms, and they are supposed to manage the economy for the benefit of all Australians. To have those same politicians accept a pay rise of any kind while the poorest people in our community are told that there is not enough to go around and that they have to go without is an utter insult. Sure times are tough, but apparently not if you’re at the top.

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