Covering letter - Deakin University submission to the Members of Parliament 2023 Determination

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8 February 2023

SUBMISSION TO THE VICTORIAN INDEPENDENT REMUNERATION TRIBUNAL – MEMBERS OF PARLIAMENT 2023
DETERMINATION

Dear Members of the Victorian Independent Remuneration Tribunal,

Thank you for your consideration of this submission to your inquiry.

We have recently conducted research into the challenges experienced by members of the Victorian parliament as they transition to life after parliament. The research was commissioned by the Parliament of Victoria in conjunction with the Victorian Parliamentary Former Members Association, and with support from the Commonwealth Parliaments Association (Victoria Branch).

Our research finds that while all MPs experience challenges transitioning to post-parliamentary life, the challenges are most acute for MPs who leave parliament unexpectedly and involuntarily and as such have not planned for life after parliament. We make 10 recommendations to the Parliament of Victoria to mitigate these challenges in our report Transitioning to Life after Parliament (2021) (see https://www.deakin.edu.au/humanities-social-sciences/research/the-parli…).

The foundational concept of our research findings and recommendations is the notion that parliamentary careers are inherently transitory. Despite the fact that many MPs have worked their whole lives towards the goal of entering parliament, most parliamentary careers are short (in Victoria, two terms or eight years). It is important that MPs do not adopt a view that they have ‘arrived’ and are ‘here to stay’.

One of the major problems in the transition to life after parliament is the difficulty many former MPs experience in establishing post-parliamentary careers. The popular notion that former MPs are parachuted into well-paid positions is not supported by the evidence from Australia or elsewhere. Indeed, most MPs have a contrary experience, in that potential employers are not willing to employ a former MP. As a result, many former MPs face significant financial difficulties in the months and years after they leave parliament.

We therefore recommend that the current separation payment of three months basic salary for former MPs who serve one term or less or six months basic salary for those who serve at least two terms be restructured from a ‘time-served’ to a ‘needs basis’. Under this model

• Six months basic salary would be paid to all departing MPs, terminated when the former MP secures paid employment.
• If the former MP has not secured paid employment after six months, they may apply for a further six month’s salary, on the proviso that they have been actively seeking work, or have medical, mental health or caring responsibilities that preclude them from obtaining employment.
• A further extension of six months (i.e. 18 months in total) would be made available in the circumstances listed above.

The full details of the proposed changes to the separation payment along with modelling of their likely costs under a range of scenarios are contained in the attached submission.

Please feel to contact us at any time to discuss any aspect of this submission. We are also happy to provide an oral submission if the Tribunal desires.

Yours sincerely,

Dr Amy Nethery, Dr Peter Ferguson, and Dr Zim Nwokora

Senior Lecturers in Politics and Policy
Deakin University.

Deakin University CRICOS Provider Code: 00113B
Faculty of Arts and Education
School of Humanities and Social Sciences
Deakin University
Melbourne Burwood Campus,
221 Burwood Highway, Burwood, VIC 3125
deakin.edu.au

Submission - Deakin University submission to the Members of Parliament 2023 Determination

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Recommendation for restructuring the Separation Payment

Submission prepared for the Victorian Independent Remuneration Tribunal

Peter Ferguson, Zim Nwokora, Amy Nethery and Matthew Clarke

Updated January 2023

Published by Deakin University 2023
221 Burwood Highway
Burwood VIC 3125
Australia
Copyright information ©Deakin University 2023
All rights reserved
Please contact Peter Ferguson at peter.ferguson@deakin.edu.au
if you wish to reproduce any part of this report.
ISBN 978-0-7300-0171-3

Background to this Submission

Deakin University was commissioned by the Parliament of Victoria, in conjunction with the Victorian Parliamentary Former Member’s Association (VPFMA), to undertake research on the experiences of members of the Victorian parliament as they transition to life after parliament. Our findings and recommendations were published as Nethery et al. (2021) Transitioning to Life after Parliament (ISBN: 978-0-6452619-0-5).

Our research into the transition to life after parliament raised some additional findings on the appropriateness and effectiveness of the current separation payment arrangements for members of parliament when they leave parliament. This submission, prepared for the Victorian Independent Remuneration Tribunal (VIRT), sets out our findings and makes a recommendation for improving these arrangements. In light of our findings, we request that the VIRT give consideration to this submission.

The Victorian Independent Remuneration Tribunal was established under the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards Act 2019 and is the body tasked with reviewing Victorian Parliamentary salaries and entitlements. Under this legislation it is required to hold regular public inquiries and receive submissions before making its determinations. Deakin believes that this submission provides valuable evidence which should be made available to VIRT at its next inquiry.

The recommendation comes from the findings of our research into MPs’ transition to life after parliament, which includes a survey of 93 former MPs, interviews with 39 former MPs, and a comparative analysis of 34 other Commonwealth parliaments. In addition, the recommendation draws on economic modelling conducted by Mr Daniel Boss of the Victorian Parliamentary Budget Office, who was seconded to assist with this research.

Should this recommendation be implemented, we believe the experience of transitioning out of a parliamentary career will be significantly improved across the range of mental health, wellbeing, financial and employment issues identified in this submission. The recommendation will have a further positive impact on democracy in Victoria by removing a significant disincentive for MPs to leave parliament, thus encouraging regular renewal of members of parliament.

The Transitioning to Life after Parliament research project and this present submission was approved by the Deakin University Ethics Committee (Code number HAE-20-099).

Acknowledgements

Mr Daniel Boss of the Victorian Parliamentary Budget Office was seconded to develop a costing model based on our recommendations; we are grateful for his work on this aspect of the project. We are also grateful to Ms Linda Wollersheim for her research assistance on this project.

Glossary

FMP - Former Members of Parliament
MP - Members of Parliament
PoV - Parliament of Victoria
VIRT - Victorian Independent Remuneration Tribunal
VPFMA - Victorian Parliamentary Former Members Association

Recommendation: Restructure the current separation payment to a ‘needs basis’ rather than a ‘time-served basis’.

The Victorian Independent Remuneration Tribunal should give consideration to amending the current separation payment from a ‘time-served basis’ to a ‘needs basis’.

The ‘needs basis’ payment should be structured as follows:

• Six months basic salary to be paid to all departing MPs, terminated when the former MP secures paid employment.
• The basic salary would be the equivalent of a backbencher’s salary.
• If the former MP has not secured paid employment after six months they may apply for a further six month’s salary, on the proviso that they have been actively seeking work, or have medical, mental health or caring responsibilities that preclude them from obtaining employment.
• A further extension of six months (i.e. 18 months in total) would be made available in the circumstances listed above.
• Payment will be in regular instalments.
• The former member will be obliged to notify the Parliament as soon as they obtain paid employment so that the separation payment can be ceased, either fully, or reduced on a pro rata basis if full-time employment has not been secured.
• As is currently the case, the separation payment will be paid to an MP (or their beneficiary) when the MP dies while in office; does not seek re-election; or otherwise ceases to be an MP provided the MP does not lose their seat as a result of corrupt conduct.
• The payment would not be available to MPs who resign their seats before the end of a parliamentary term except for medical, mental health or caring responsibilities.
• The payment would not be available to MPs who are members of the defined benefit superannuation scheme.
• The payment would not be available to MPs who are in receipt of benefits from other superannuation schemes or Commonwealth or State benefits.

Current arrangements

The current separation payment was introduced in 2019 to replace the former resettlement allowance, which was only provided to former MPs who lost their seat at a general election or did not seek re-election due to not being endorsed by their party.

The separation payment is provided to an MP or their dependants when an MP dies while in office; does not seek re-election; or otherwise ceases to be an MP provided the MP does not lose their seat as a result of corrupt conduct.

The payment is also not available to MPs who are members of the (now closed) defined benefit superannuation scheme.

Eligible MPs receive a lump sum which varies according to the time served in Parliament:

• Three months basic salary, if they served one term or less
• Six months basic salary, if they served at least two terms
• A pro-rata sum between three and six months basic salary, if they served between one and two terms.

Evidence Supporting this Recommendation

There are two fundamental problems with the current separation payment arrangements:

• It is available for an insufficient period following an MP’s departure from parliament; and
• Qualification for the payment is determined by the amount of time served by an MP in parliament, rather than the specific needs of the MP after they leave parliament.

Our survey found that it took 53% of FMPs at least six months after leaving parliament to secure paid employment, while 28% took between six and 12 months and a further 12% took 18 months or more to find work. The remaining 7% reported having not found any new role, although these were mostly former members who had retired, were not interested in paid employment and or only seeking community roles.

Members of VPFMA Welfare Committee have reported instances of FMPs taking up to four years to secure employment, and some FMPs interviewed for this project reported knowing others being unable to secure work three years after leaving parliament.

The survey and interview data confirm that the challenges in securing work after leaving parliament are experienced roughly equally by FMPs who left parliament after a short time and those who have had a long a parliamentary career. Some people who depart after one term are able to take up employment immediately, while others find the time in parliament much more disruptive for their career opportunities. Conversely, some people who have had long parliamentary careers transition quickly into other roles, while others take many months or years to get back to full employment. We conclude that time spent in parliament is not a good indicator of whether or not the separation payment is needed.

The interview data reveals that the delay in securing employment is due to a number of factors:

• Many FMPs, regardless of the nature of their departure, recount a period of physical and mental exhaustion after their time in parliament as a result of the high demands of the job.
• In Victoria, elections are held in November. December and January are slow times for recruitment, so it is often two months or more before a FMP begins to look for work.
• Most MPs who depart parliament involuntarily have little or no plan for a career after parliament, and it takes some time for new opportunities to be sought.
• The majority of FMPs, regardless of the nature of their departure, have experienced difficulty securing work as a result of employer bias against employing former MPs due to concerns about impact of partisanship on the company.
• There is not a full understanding of the skills and expertise held by former parliamentarians within the commercial sector and former parliamentarians often fail to articulate their own value-proposition when seeking new employment opportunities.
• The lack of commercial or industry experience (outside of the political sphere) prior to entering parliament limits employment opportunities once they leave parliament.
• When FMPs do secure work, it often does not equate to a full-time load or equivalent income, and may include a combination of paid and unpaid roles. Chronic underemployment may occur for years.

In the interviews, many MPs related the prolonged difficulties they experienced securing post-parliamentary employment and the financial and emotional stress this caused them and their families. As one FMP who lost their seat after one term stated

[I was] four years out of the normal workforce, and…[the] stigma associated with your CV because of the MP thing…can ruin your career. It can end your career. So what then, and you've got a mortgage? Maybe still got a couple of kids…So public service ruins your life.

Another recounted how

I was unemployed. I was the family's main income earner. All of a sudden, things that you take for granted about, like paying for the mortgage…all becomes a bit shaky, so it was hard.

Importantly, the failure to secure employment in the immediate post-parliamentary period was usually not for want of trying, as this responded who lost their seat recalled:

I started on the Monday [after the election] at my office writing letters…Could you imagine what it was like? It just would have been dreadful…I actually thought my experience was going to land me a job straightaway. That's what I thought…I thought somebody's going to be so impressed by everything that I have done during my eight years [in parliament] that they will want me and they didn't.

A key insight from the interviews is that it typically takes quite a long time to secure employment, sometimes more than a year. One interviewee recalled a former colleague who took more than three years find work. This is why it is necessary to make the separation payment available to those who need it for up to 18 months.

Time is also needed to develop a post-parliamentary professional profile, because as one FMP, who looked for work eight months before securing a job interstate observed,

I don’t think there’s any respect for the skills that an ex-MP has. It was well you’re completely out of touch, you haven’t worked for four years…people don’t understand; they go well so you haven’t been in management for four years. Well actually [I] managed staff…[and] volunteers…I know how to manage but I couldn’t prove that, because MP on your resume says you’re not a manager. Having MP on your resume says you don’t know what the corporate sector is…So there’s that perception that you’ve lost all of your skillset and haven’t gained any.

Applying for jobs is also very time-consuming, especially, as many respondents recounted, they were applying for up to three or four positions per week, often over many months. One FMP even estimated that they applied for at least 100 jobs in 12 months before securing a role that paid less than half their backbench salary.

Having just gone through the ordeal of losing their seat, this FMP believed that they simply were not in the right frame of mind to secure a new role in the 12 months following their departure from parliament, which again demonstrates the need for needs-based transitionary financial support.

I was in such a terrible headspace that I probably wasn't applying as much as I should have been, but I don’t think I was getting interviews for that reason. I've had friends that have been in this position before over the years, when you're depressed and at a low ebb, you kind of don't get traction with potential employers, because I think there's a vibe around that.

Similarly, another FMP who lost their seat in 2018 and had still not gained employment at the time of being interviewed explained that

I actually stopped applying for a long time, and I stopped because looking at SEEK and LinkedIn and all those sorts of things was sending me into a spiral of deep depression…knowing that they were roles that I could do, but…I didn't have any of the qualifications they wanted. I got to the stage where I was so depressed, I was crying all day, every day, crying myself to sleep every night. I just thought, this is actually not healthy. So I stopped looking.

For many respondents who were not beneficiaries of the defined benefit superannuation scheme, and especially those who lost their seats before the introduction of the current separation payment arrangements, the financial impact of electoral defeat was often acute:

The pension was never important until you realise the discrimination that you're faced that prevents you from the most basic…employment and basic financial security...It would have meant an incredible difference for me and everybody else [who missed out]…Some of [my] colleagues that were in the same situation as me, they couldn't pay the mortgage for six months.

Other respondents who were beneficiaries of the old scheme were also concerned about the impacts of its abolition on their former colleagues:

I think this is a problem when they just cut the pensions off completely. I think hindsight's always a wonderful thing, they should have reduced it…One [former MP once said to me that the pension] ‘really saved me because I've got young children’. So…I don't think people quite understand…that it’s not like you lose your job in the ordinary world…and then you can just walk into something else. Because the politics make it very difficult.

The old system that we had stood everybody in good stead…I was happy to…work 80 hours a week knowing that I was going to be compensated for that over the rest of my life…I have to say that I do feel for some people who didn’t quite make the parliamentary pension.

The old pension scheme is a very big benefit to help the transition, versus now, because you can say, bugger it, at least I get something out of it…For a lot of people, having left their jobs to go into Parliament, they can't easily come back to those jobs.

Some FMPs who were in receipt of the pension also expressed concern about the broader consequences of the abolition of the pension for parliamentary democracy in Victoria.

the pension was introduced…on the idea that people take themselves out of the workplace, out of their career for a number of years, and then they can’t find their way back in. I don’t think that’s changed. I think that’s remained the same…I think we’ve got a real problem post 2004…Someone that’s on a $200,000 a year income suddenly drops to nothing is going to be a problem…[It has] been a real disaster…because I think it means two different things. It means that some people will leave too early because they find an opportunity to get a job somewhere…or they stay too long. I think neither of them are good for the body politic. I think the body politic needs to be replenished all the time.

I'd bring back pensions…because what you have when you don’t have pensions are oldies that you can't get rid of. They hang out in their seat forever, because they want the pay packet…When the pension was there, the people would be put into the seats and then everyone would count if they'd qualified for their pension, and then if they're good, bad or indifferent you can get rid of them and get a new one in who might be better. But you can't dislodge them if they've got nothing to fall back on.

For many, the pension allowed FMPs to continue to give back to the community and use the skills that they developed in parliament, as this respondent explained:

I ended up with a portfolio of responsibilities…it’s this protection of the pension. Didn’t matter whether I was being paid. So, chairing the local…community health board, I think I get $2000 a year to do it [but] I have been known to spend 10 or 15 hours, even more, a week on it.

Recipients of the current separation payment were very thankful, despite the fact that for many it did not see them through to securing employment, even when they scrimped and saved. This again demonstrates the need to restructure the separation payment to become more needs-based, because ‘if you can't get a job because you've been an MP that - there needs to be just some sort of safety net’.

MPs can get their $35,000 or their $75,000, but still in practical terms they're going to be discriminated for a lot longer than that…[because] if you leave after one term, you're going to suffer the same discrimination as somebody who's been there three terms. So having the 35,000 doesn't cut it, because they're going to be discriminated for just as long as the others. With 35,000, you've got to buy a car, so really that could just be taken up with that. Then you've got to find money ongoing for the mortgage or the rent.

It’s good that we’ve now got the…three month or six-month payment and that does give you a bit of time, but if you’re the sole income earner for a family it doesn’t last long.

Comparison of current arrangements with other Commonwealth parliaments

The current separation payment is more generous in terms of amount paid, duration of payment and qualification requirements than 23 of the 33 Commonwealth legislatures surveyed and commensurable with three parliaments, namely Australia’s Federal Parliament, the Queensland Parliament and the Isle of Man Tynwald.

Seven of the Commonwealth parliaments surveyed provide more generous and/or more needs-based transitional payments than the PoV. With the exception of the Welsh Assembly, these are all Canadian provincial legislative assemblies, which is consistent with the limited literature on parliamentary transitions that finds that the most extensive support to departing MPs is provided in Canada (Jacobson, 2015; Roberts, 2017).

The most comprehensive and needs-based transitional support is provided in British Columbia, which we believe offers a model worth emulating in Victoria. In British Columbia, transitional assistance provides the equivalent of a member’s basic salary and benefits in fortnightly payments until they are in receipt of income in excess of the fortnightly transitional assistance amount or 15 months have elapsed, whichever comes first. Should a former member become employed during the transitional period, the transitional assistance allowance will be reduced by the gross amount of any declared employment income and/or member pension benefits.

Members who choose not to stand for re-election or are defeated in a provincial general election qualify to receive the transitional allowance. To qualify for the full 15 months of the transitional assistance allowance, members must have served a full term of parliament. Members elected in a by-election during a parliament, and not running or not elected in the following provincial general election, are eligible to receive the first four months of the transitional assistance allowance, with the remaining 11 months prorated, based on the amount of time served as a percentage of the duration of the parliament. Members who resign or forfeit their seat in the House are not eligible for this assistance. All members who meet the transitional assistance criteria are entitled to receive the first four months of transitional assistance payments, regardless of whether the Members are in receipt of pension or employment income.

Payments made under the Transitional Assistance Allowance for Members are disclosed on the Legislative Assembly’s website on an aggregate basis quarterly after each provincial general election.

An additional retraining allowance of up to CAD$9,000 is also available to former members, upon presentation of receipts for the completion of eligible courses and programmes, including career counselling, tertiary education, professional development, textbooks and other educational costs, including travel costs associated with retraining. To be eligible for reimbursement, training must occur within the 15-month transitional assistance period, except for members not seeking re-election, who may incur costs prior to election day.

Ontario, Manitoba, Nunavut, Quebec, Saskatchewan and Wales also provide more generous and long-lasting transitional support than Victoria. Although the benefits in these jurisdictions are calculated on a time-served basis, the minimum transitional payment as proportion of basic salary or average annual salary remains greater than the three months basic salary provided in Victoria for members who serve at least four years.

Economic modelling

A budget model was constructed to analyse the project’s recommended change to the separation payment from the current time-based scheme to a more needs-based scheme, in which payment depends on how long it takes to find secure paid employment. To reiterate, we propose that all departing MPs (subject to the conditions outlined above) would be paid 6 months’ salary, and they would all be eligible for payments of up to 18 months’ salary via 6-month extensions if they are actively seeking work or have caring responsibilities or health that preclude them from obtaining employment. MPs who secure employment would no longer receive payments, or receive reduced payments, if they have not secured full-time employment.

To estimate the cost of this change if it were introduced prior to the state election in 2022, we assume the following:

• MPs’ salary. The basic salary for an MP in 2022-23 is forecast from the 2021-22 basic salary.
• Number of departing MPs. A central estimate was taken (37 departures) based on recent historical data, with high (52) and low (22) scenarios estimated by adding and subtracting 15 departures, respectively.
• Time taken to find a new job for eligible MPs. Excluded from our calculations are the MPs who are eligible for the parliamentary pension scheme, which closed in 2004. For the remainder, we consider two plausible scenarios (based on evidence from the survey): (i) all members take between 0 and 6 months to find work, and on average 3 months; (ii) 80% of members take between 0 and 6 months to find work, and on average 3 months, but 20% wait the full 6 months. The latter scenario takes account of the ‘behavioural response’ of some members who delay their search for work because of the new scheme.

We estimated the total separation payments following the 2022 election under the current scheme (Model A), under proposed new scheme without the behavioural response (Model B), and under the proposed new scheme with the behavioural postulate (Model C). For comparative purposes, we also considered the new proposal with a low payment, set at the average weekly wage rate in Victoria (computed from the most recent data (November 2020)). This low-cost version of the proposal is calculated under both the assumption of no behavioural response (Model D) and while assuming behavioural change (Model E). The results from these various estimates are summarised in Table 1 below.

It should be noted that there is greater uncertainty in the costings for the proposed new scheme, because the amount that would be paid to each departing MP depends on how long it takes them to find work, which in turn will depend on, amongst other things, the state of the economy and the vibrancy of particular labour markets. By contrast, the basis for payments under the current scheme is simply the number of full terms that have been served, so there is no connection between the overall cost of the separation payment and fluctuations in the economy and labour markets.

There is greater uncertainty in the costings where the time taken to find paid employment is the payment basis. This is because the amount that would be paid to each departing MP is uncertain, unlike the amount that would be paid under the current scheme where the number of full terms served is the payment basis. Due to this uncertainty, the results for all scenarios listed above may not reflect the actual experience following the 2022 election. For example, most MPs that depart after the 2022 election may have served at least 2 terms and find full-time paid employment 2 months after departing parliament. In this instance, most departing MPs would only receive a 2-month separation payment instead of a 6-month payment, resulting in a lower overall cost when comparing the proposed scheme to the existing scheme.

Table 1: Modelling the Cost of the Separation Payment

As the table shows, the separation payment is costlier under the proposed scheme as compared with the existing scheme. In particular, the cost estimates model B scenarios (i.e., the proposed scheme without behavioural change) are on average 16% more expensive than the model A scenarios (i.e., the current scheme). Incorporating behavioural change adds another 6% to the expected costs. Nevertheless, it is not excessively so, and the additional payments would provide an important support to FMPs during a period of significant mental, emotional, practical and employment challenges.

As one might expect, if the separation payment were to be based on average weekly earnings instead of an MP’s basic salary, the cost of the proposal is significantly lower, and indeed would be considerably cheaper than the current scheme (Models D and E). Adopting the separation payment based on the average weekly earnings instead of an MP’s basic salary would also be an acceptable outcome based on our research, and if the other conditions were in place (such as allowing the payment to continue for 18 months if necessary), this would be sufficient to ameliorate many of the acute stressors we have identified in our research. However, we argue that the payment at average weekly earnings might not be enough to remove the disincentives for MPs to leave parliament. For that reason, despite Models D and E being cheaper, we recommend that the separation payment should be the equivalent of an MP’s basic salary.

The full details of the economic modelling are contained in Appendix One.

References

• Jacobson J (2015) Members’ Assistance Programs: Working In a Job Like No Other. Canadian Parliamentary Review (Winter): 5-8.
• Nethery A, P Ferguson, Z Nwokora and M Clarke (2021) Transitioning to Life after Parliament, Report commissioned by the Parliament of Victoria and the Victorian Parliamentary Former Members’ Association, Melbourne (ISBN: 978-0-6452619-0-5).
• Roberts J (2017). Losing Political Office, London: Palgrave Macmillan.

Appendix One:
Full Economic Modelling

Prepared by Daniel Boss

Background

In 2012 and 2013, Malcolm Hazell conducted a review on Victorian members’ salary entitlements, allowances, and other arrangements. One recommendation from the review was that members that lost their seat at an election or did not run for re-election following deselection by their party for reasons other than misconduct are paid a resettlement allowance if they are unable to immediately access a parliamentary pension or access their superannuation (those that joined Parliament after 2004 and do not retire) . Some reasons for the recommendation include that the allowance is like a redundancy payment that is common in the community and that it can be difficult for recently departed members of parliament (MPs) to re-join the professional workforce.

The Victorian Parliament enacted this recommendation later in 2013. The resettlement allowance paid to an eligible member was 3 months of the annual basic salary payable for members who served less than 2 consecutive terms and 6 months of the annual basic salary payable for members who served at least 2 consecutive terms. The resettlement allowance was replaced in early 2019 by the separation payment. The separation payment amount was identical to the resettlement allowance amount, except that it was paid to all departing MPs, aside from those that have a parliamentary pension, are convicted of corrupt conduct, or committed a significant and wilful breach. The departing member is required to repay the separation payment if they are re-elected in the term immediately following their departure, either through a by-election in the Legislative Assembly or casual vacancy in the Legislative Council.

Proposed changes

Change the basis of the separation payment from tenure in the parliament to the duration of finding secured paid employment. Specifically, all departing MPs would be paid 6 months salary and would be eligible for payments up to 18 months salary via 6-month extensions, if they are actively seeking work or have responsibilities precluding them from obtaining employment. MPs that secure employment would no longer receive payments or received reduced payments if they have not secured full-time employment.

The costings for all changes to the separation payment are estimated based on these policy specifications.

Costing calculation

The following components are required to be estimated to determine the cost of a change in the separation payment to members that depart following the 2022 election:

• Basic salary at 2022 election
• Average weekly ordinary time earnings in November 2022
• Number of departing MPs after the 2022 election
• Distribution of departing MPs:
  • How many full terms they served
  • Time taken for eligible members to find paid employment

The steps taken to calculate the cost of proposed changes to the separation payment are outlined on the following page.

1. Estimate the MPs basic salary in 2022-23 by forecasting from the 2021-22 basic salary
2. Estimate the Victorian average weekly ordinary time earnings by forecasting from the most recent data from November 2020
3. Estimate the number of departing MPs
   • A central estimate was taken (37 departures), with high and low scenarios also estimated by adding and subtracting 15 respectively (52 and 22 departures)
4. Estimate the tenure of departing MPs
5. Estimate the time taken to find a new job for all departing MPs that are eligible for a separation payment
   • Those that have a parliamentary pension are ineligible for a payment; the parliamentary pension scheme was changed in 2004
   • There are two scenarios in this calculation: all members that take between 0 and 6 months take 3 months on average, and 80% of members that take between 0 and 6 months take 3 months on average with the remaining 20% waiting the full 6 months (a “behavioural response” of members that can easily find employment after departing parliament)
6. Estimate the total separation payments following the 2022 election by multiplying the basic salary or annualised average weekly ordinary time earnings by the respective proportion based on the tenure or time taken to find a new job for departing MPs eligible for the payment, for the four specified options:
   • Current scheme
   • Replacing payment basis from tenure to time taken to find a new job
   • Replacing payment basis from tenure to time taken to find a new job and replacing the basic salary with annualised average weekly ordinary time earnings
   • Replacing payment basis from tenure to time taken to find a new job but maintaining the same overall cost
     • The salary and percentage change required for this cost neutral policy are also calculated

Assumptions

The estimates are calculated using the following assumptions:

• the MP basic salary and Victorian average weekly ordinary time earnings increase in line with the Victorian wage price index
• the number of departing MPs following the 2022 election is equal to the average number of departed MPs following the 2014 and 2018 elections
• the composition of departing MPs eligible for a separation payment by time taken to find employment is equal to the composition of all departed MPs in the survey conducted by the Deakin Research Team, aside from required manual edits (see Results section)
  • those that did not provide a response to the question of time taken to find employment are assumed to not be looking for work and receive no payment
• all departing MPs that find employment within a set time range take on average the midpoint of the range to find a new job (ie. 3 months for those between 0 and 6 months)
  • the exception to this is when a 20% “behavioural response” is applied to the cohort of departing MPs that take between 0 and 6 months to find employment, where those individuals choose to wait the full 6 months until they resume paid employment
• the composition of departing MPs by length of tenure is equal to the composition of all sitting MPs by length of tenure as at the 2022 election
• no departing MP receives a reduced payment; they either receive a full payment or no payment
• no departing MP left parliament due to being convicted of corrupt conduct and did not commit a significant and wilful breach
• no departing MP is re-elected to parliament in the immediate term after their departure
• the impact of members losing seats due to redistributions is similar in 2022 to previous years.

The cost estimates are sensitive to changes in all assumptions and only estimate the cost from departures following the 2022 election.

Results

For all scenarios:

• there is a higher cost when changing the separation payment amount basis from tenure to time taken to find employment
• there is a lower cost when making this change but calculating the payment based on average weekly ordinary time earnings instead of the MP basic salary.

The costs of the two separation payment schemes based on the time taken to find employment increase by a range of 5.5% to 5.9% when the “behavioural response” for the cohort of departing members that take between 0 and 6 months to find employment is accounted for.

These results are driven by both the costing assumptions and discrete nature of the costings (ie. fixed number of departing MPs for each cohort – no decimals used). This is evident in the annual payment for the cost neutral scenario, as the split of departing MPs eligible for separation payment by tenure had to be edited to ensure consistency (see italicised ‘Check’ numbers).

There is greater uncertainty in the costings where the time taken to find paid employment is the payment basis. This is because the amount that would be paid to each departing MP is uncertain, unlike the amount that would be paid under the current scheme where the number of full terms served is the payment basis. Due to this uncertainty, the results for all scenarios listed above may not reflect the actual experience following the 2022 election. For example, most MPs that depart after the 2022 election may have served at least 2 terms and find full-time paid employment 2 months after departing parliament. In this instance, most departing MPs would only receive a 2-month separation payment instead of a 6-month payment, resulting in a lower overall cost when comparing the proposed scheme to the existing scheme.

Excel summary

Excel models and instructions on how to use them are available upon request.

24 February 2023

To: The Victorian Independent Remuneration Tribunal Secretariat
Melbourne Victoria
By email: enquiries@remunerationtribunal.vic.gov.au

Re: Members of Parliament (Victoria) salaries and allowances Determination 2023 – submission

Thank-you for the opportunity to make a submission to this process. I am a resident of a metropolitan electorate, and involved in local community issues and campaigns, primarily at the local government level. The local State MP and Federal MP are both from the political party that is in government.

It is my submission that the salaries and allowances of MPs and office-holders should not increase by even one cent. If it were possible, then the salaries and allowances should be slashed.

MPs are already paid an excessive amount, that does not provide value for money to the Victorian public.

It is my honest opinion that I have not had representation by a State MP for this district for the past 8 years. On the occasions that I have contacted my local State MP I have not received any response, but on at least one occasion I could see that the information I gave to the MP was then used against me.

In 2022, I visited the electorate office of my local State MP to request assistance on a community issue that had been causing widespread concern for more than 12 months. The electorate officer informed me that their office had not received any complaints about the issue.

That demonstrated how disconnected the MP was from their “community”. Local people just didn’t bother with the State MP.

By contrast the Federal MP for this electorate had contacted our community group one year earlier, and held several meetings with us to provide assistance.

The Federal MP was performing the role of both the State MP and the Federal MP.

I have found however that electorate officers are not a consistently reliable source of information, neither at the Federal electorate office or the State MP’s office. It is more effective to have done my own research and followed politics, in order to balance the electoral officer advice against my own information.

RESPONSE TO THE QUESTIONS FOR DISCUSSION

Since the Tribunal’s 2019 Determination, what substantive changes, if any, have occurred to: • the role of an MP?

I have not observed any positive difference in the role of an MP since the Tribunal’s 2019 Determination. My local MP has continued to not represent me, nor provide assistance through their electorate office.

It has been very disappointing that some government MP’s have failed to properly disclose potential conflicts of interest on their Members Interests Returns.

There were some prominent examples of this in 2022:

(redacted)

In my opinion, the enacting of legislation for “Improving Parliamentary Standards and the Victorian Independent Remuneration Tribunal” Act of 2019 should have been the trigger for Government MP’s to be more careful with their Interest Returns, and accepting appointments to various roles.

But that has not been the case.

Since the Tribunal’s 2019 Determination, what substantive changes, if any, have occurred to:
each office holder role?
how MPs and office holders perform their roles?

The Premiers Private Office (PPO) has continued to increase, and now has over 90 stafff https://www.afr.com/politics/daniel-andrews-confirms-he-has-90-staff-but-that-s-just-the-start-20220811-p5b920.

Instead of public servants and elected MP’s performing their individual roles, there are politically appointed staff in the PPO who act without transparency or scrutiny making the important decisions instead.

(redacted)

It is not financially sustainable, reasonable nor fair.

My local MP is a member of the Andrews Government, and therefore can only provide assistance to constituents within the limitations placed by the PPO and the Premier.

If I want genuine assistance from an MP, then I would have to contact a non-ALP MP and even then I would have to hope for the best.

Do MP salaries, including additional salaries paid to office holders, provide fair and reasonable recompense for MPs performing their public duties?

No. In my opinion the salaries of MP’s are way too high.

The average Australian wage is somewhere around $80,000 per annum.

The base salary of a State MP should be no more than double the average wage, and the salary of the Premier should be no more than triple the average wage.

I think there should be a comparison to how politicians in some European countries, such as the Netherlands, are paid.

State MPs have no particular skillset that makes them deserving of such high salaries.

The Victorian ALP branch is still under administration, and ALP candidates for the 2022 State election were chosen by the Federal ALP Executive.

The Victorian ALP has done next to nothing to stamp out branch-stacking during the past 8 years.

(redacted)

Do the relativities between the basic salary paid to all MPs and additional salaries paid to office holders accurately reflect their respective responsibilities?

No it does not.

My observation is that Ministers are very rarely responsible for anything.

Cabinet documents are locked up for 10 years, avoiding transparency and scrutiny of high-level decisions. The Premiers Private Office is exempt from public sector obligations.

Integrity legislation is full of loopholes, meaning that “grey/soft” corruption has grown exponentially.

There is currently no effective way to make office holders responsible or accountable.

Are there any other matters that you believe the Tribunal should consider in setting the value of MP salaries?

Yes.

1. The Tribunal made a Determination about Local Councillors allowances in March 2022, that Councillors would be paid less than $40,000 per year to “represent” their community.
   
   The current salaries of MPs is totally out of proportion to the allowances of Councillors (not the Mayor), and is likely to further encourage local Councillors to run as candidates in State elections and Federal elections. This impacts negatively on local government.
   
   Councillors take leave of absence, sometimes for 4 months or more, to run in these other elections. This leaves local communities with reduced “representation”, and with local Councillors making decisions that serve their political ambitions instead of doing what is best for the community.
   
2. School Councils in government schools are still run by unpaid volunteers. Government schools in Victoria have the highest additional costs to parents of any State in Australia.
   
3. If the salaries of MPs were to be slashed, then perhaps there would be money available to pay Local Councillors and School Council members a fair and reasonable salary also.
   
4. The State of Victoria relies on too many not-for-profit and volunteer organisations to provide essential services to the community. It is not fair or reasonable that State MP’s are paid $200,000 per year, or more, when so many other important workers are on minimum and low wages.
   
5. In my opinion, there should be an analysis of whether or not the Parliamentary Standards have improved.
   
   My position is that Standards have not improved at all.
   
6. For the current and projected economic conditions and trends, the Tribunal has used labour market data from the ABS only (national unemployment rate).
   

I would like to request that the Tribunal uses data from Roy Morgan also - for unemployment and under-employment data https://www.roymorgan.com/findings/9176-australian-unemployment-estimates-january-2023. In my opinion, the methodology of Roy Morgan is more fair and accurate than what the ABS uses.

(redacted)

The Tribunal is supposed to be an Independent body, and therefore it should be able to use a variety of sources of data.

I also think that one of the economic indicators could be the number of children living in poverty. Has this number reduced since 2019? Probably not.

Thank-you again for the opportunity to make a submission to this Determination.

Kind Regards,

De-identified submission to MP salary Determination (redacted)

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Submission from Parliament of Victoria Clerks to Remuneration Tribunal

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23 February 2023

Mr Warren McCann
Chair
Victorian Independent Remuneration Tribunal
Suite 1, Ground Floor
1 Treasury Place
Melbourne VIC 3000

By email: enquiries@remunerationtribunal.vic.gov.au

Dear Mr McCann

Consultation paper – Members of Parliament (Victoria) salaries and allowances Determination 2023

Thank you for the opportunity to provide a submission on the Tribunal’s consultation paper. As Relevant Officers for work-related parliamentary allowances, we provide the following input for the Tribunal’s consideration.

Potential roll-in of expense allowance into additional salary (Consultation Paper, page 19)

The Tribunal seeks input on whether part or all of the expense allowance should be rolled into the additional salary for eligible office holders and the advantages and disadvantages of this approach.

We do not have a view on this change, but thought it may be helpful to outline how we currently deal with expense allowances, and raise an area where the Tribunal may wish to provide further clarity.

Under the Tribunal’s Determination, some specified parliamentary office holders are provided only an additional salary and some are provided an additional salary and an expense allowance.

Under section 6(3) of the Parliamentary Salaries, Allowances and Superannuation Act 1968:

A Member who concurrently holds more than one specified parliamentary office is only entitled to receive one additional salary, being the highest additional salary to which the Member is entitled.

The Act is silent on how to treat a member who concurrently holds more than one specified parliamentary office that receives an expense allowance. Our current practice is to not pay the same member multiple expense allowances, but to pay the member the highest expense allowance to which the member is entitled, consistent with the principle in section 6(3). The office that receives the highest expense allowance can be different to the office that receives the highest additional salary.

If the Tribunal proceeds with rolling in the expense allowance into additional salary, the Tribunal may need to consider the impact on members who concurrently hold more than one specified parliamentary office.

If the Tribunal decides to retain additional salaries and expense allowances for office holders, we would appreciate the Tribunal providing some clarity around how members who hold more than one specified parliamentary office should be treated — whether a member should be paid the highest expense allowance to which the member is entitled, or whether they should be paid multiple expense allowances.

We thank you for the opportunity to provide this submission, and would be happy to meet with you and the Tribunal members to discuss these matters further.

Robert McDonald
Clerk of the Legislative Council

Bridget Noonan
Clerk of the Legislative Assembly

Parliament of Victoria

+61 3 9651 8911

parliament.vic.gov.au

info@parliament.vic.gov.au

Parliament House

Spring Stteet, East Melbourne

Victoria 3002 Australia

Parliament of Victoria - Speaker of the Legislative Assembly and President of the Legislative Council

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28 February 2023

Victorian Independent Remuneration Tribunal
Suite 1, Ground Floor
1 Treasury Place
EAST MELBOURNE VIC 3002
By email: enquiries@remunerationtribunal.vic.gov.au

Dear Tribunal,

Submission on the Members of Parliament 2023 Determination

Thank you for the opportunity to make a submission to the Tribunal’s Members of Parliament 2023 Determination. We also welcome the consultation paper that the Tribunal has circulated for consideration. Our submission relates to two areas which have been raised with us by regional Members of Parliament (MPs).

Parliamentary Accommodation Sitting Allowance (PASA)

We note that the Tribunal has referenced potential reforms to the PASA in its consultation paper including considering removing or phasing out the PASA. Whilst the travel allowance has provided an alternative way for all MPs to claim accommodation expenses related to their parliamentary business, there are unique challenges faced by regional MPs which favour maintaining the PASA.

The PASA applies specifically to regional MPs and allows them to maintain a second residence in metropolitan Melbourne to assist them in carrying out their public duties (provided all eligibility criteria are met). This is distinct from the travel allowance which operates on a reimbursement basis for overnight stays. And MPs who claim the PASA are not eligible to claim the travel allowance.

Whilst on the surface these two allowances appear similar, we respectfully submit that there remains a need for the PASA to be available for regional MPs.

The PASA allows regional MPs with significant metropolitan-based commitments (for example, ministers, shadow ministers or committee members) the certainty of having accommodation which they can utilise when the need arises for them to be in Melbourne. An example could be given of a regional-based shadow minister who receives notification late in the day of a requirement to be at a press conference in Melbourne early the next morning. The reality is that MPs can have very unpredictable workflows.

The PASA also imposes less of an administrative burden than the travel allowance which would require regional MPs to submit individual claims and associated paperwork for reimbursements for their numerous trips to Melbourne.

We believe that as much as possible, regional MPs should not be disadvantaged or discouraged from taking on the often onerous and time-consuming responsibilities that are required in their roles. This includes attracting potential future candidates to run for office in regional areas.

We therefore submit that the tribunal consider maintaining and strengthening the PASA. One option the Tribunal could consider is merging the PASA and the travel allowance so that the actual costs incurred by MPs are accounted for but that also allows regional MPs the certainty of an ongoing residence in Melbourne to ensure they can diligently carry out their public duties.

Commercial Transport Allowance

The Tribunal will be aware that prior to the introduction of the current salary and allowances scheme, regional MPs were able to claim the cost of commercial transport for driving to the city for parliamentary sittings. This is no longer available to regional MPs who must drive themselves to and from Melbourne for parliamentary sittings.

Parliamentary sitting weeks can sometimes be demanding of MPs with a range of commitments inside and outside their respective chambers. Additionally, the hours which Parliament sits can often be unpredictable, particularly for the Legislative Council, and may include unexpected late-night sittings.

For regional MPs required to drive long hours back to their electorates at the end of the sittings, this presents a potentially significant health and safety risk. Moreover, the time spent driving to and from Parliament results in a less equitable ability to manage their workloads as compared with their metropolitan counterparts.

We submit that the Parliament, the communities represented by regional MPs, and the Victorian community more broadly has strong an interest in regional MPs being able to represent their electorates to the best of their abilities, with as few barriers to participation as possible.

We therefore request that the Tribunal give strong consideration to extending the commercial transport allowance to allow regional MPs to cover the cost of motor vehicle transport to and from Melbourne for parliamentary sitting weeks.

Thank you for your time and consideration of this submission. We would be happy to discuss any aspect of this submission further or provide further detail should the Tribunal request it.

Yours sincerely

Hon Maree Edwards MP

Speaker of the Legislative Assembly

+61 9651 8575

speaker@parliament.vic.gov.au

Hon Shaun Leane MC

President of the Legislative Council

+61 3 9651 8676

president@parliament.vic.gov.au

Agreed summary of oral submission to the Victorian Independent Remuneration Tribunal forthcoming Members of Parliament (Victoria) salaries and allowances Determination 2023 and review of the Members of Parliament (Victoria) Guidelines

The Hon. Peter Walsh

9 March 2023

Parliamentary Accommodation Sitting Allowance

• The Parliamentary Accommodation Sitting Allowance (PASA) supports regional Members of Parliament (MPs) to represent their constituents at Parliament on sitting days. MPs, party leaders and Shadow Ministers also undertake other Melbourne-based public duties on non-sitting days.
• The PASA enables regional MPs to access residential accommodation in Melbourne, which has advantages over short-stay commercial accommodation. These include:
  • Providing a stable base in Melbourne for MPs, particularly those with young families or other caring responsibilities. For example, MPs with young children are better able to provide care for their young families and partners from residential accommodation (as opposed to from short-stay accommodation).
  • Reducing claims from MPs for short-stay accommodation and incidentals, such as meals and laundry.
  • Being able to arrive in Melbourne the night before or stay the night after long days in Melbourne and not being forced to travel long distances early in the morning or late at night following completion of their public duties and the concomitant risk of fatigue.
• The PASA is well-understood, and is simple and easy to administer, while potential alternatives (such as the travel allowance) are more complex and require MPs to submit claims for reimbursement and for claims to be assessed and processed by parliamentary staff.
• Issues that may need to be considered in replacing the PASA with the travel allowance include the different eligibility criteria for these allowances. For example, the PASA is available for ‘public duties’ while the travel allowance has different distance criteria for ‘electorate business’ and ‘other business’ (80 kilometres and 28 kilometres respectively).
• Reforms that limit the ability of regional MPs to obtain suitable accommodation in Melbourne may:
  • affect their ability to effectively represent their electorates — for example, by deterring them from undertaking some public duties in Melbourne
  • deter prospective candidates from standing for Parliament — for example, regional MPs with caring responsibilities for young children.

Transport/travel allowances

• There are limited flight connections between regional Victoria and Melbourne, which means that most regional MPs are required to drive to and from their electorates for parliamentary sitting weeks and other Melbourne-based public duties.
• Driver fatigue may be an issue in certain circumstances — for example, driving long distances after extended parliamentary sitting days and/or extended travel times due to congestion.
• Extended travel times between regional electorates and Melbourne may also reduce the ability of regional MPs to undertake public duties.
• The Tribunal could consider reforms to travel or transport allowances — for example, regional MPs were previously able to employ a driver to drive their electorate car for long distance travel, which may be worth considering, with appropriate safeguards.

Role and functions of an MP

• MPs are experiencing a significant increase in communications from constituents via text message, email and social media platforms in addition to regular mail, phone calls and in-person visits.
• The quota for each electoral district has increased to approximately 50,000 constituents. In addition, there are significant increases in the size of some electorates due to the lack of population growth in those regions between redistributions and substantial changes in some electorate boundaries after a redistribution.
• MPs and electorate offices experienced a significant increase in workload while COVID-19 restrictions were in place, as constituents sought advice and support on the COVID-19 restrictions and other support or advisory services may have been unavailable or difficult to access due to them being closed.
• The staff in electorate offices increased from 2.0 FTE following the 2014 redistribution to 2.5 FTE to handle the increased numbers of constituents in electorates but hasn’t increased with the 2022 redistribution. This is despite another substantial increase in the number of constituents in electorates and the subsequent increase in workload.
• Online and remote working because of COVID restrictions created challenges for MPs and electorate offices, including to ensure accurate and timely responses to issues raised by constituents and to establish effective working relationships that support MPs to undertake their public duties.

MP salaries and allowances

• Adjustments to MP salaries and allowances should take account of the Government’s wages policy.

Agreed summary of oral submission – Hon Peter Walsh MP

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Agreed summary of oral submission to the Victorian Independent Remuneration Tribunal forthcoming Members of Parliament (Victoria) salaries and allowances Determination 2023 (2023 Determination) and review of the Members of Parliament (Victoria) Guidelines (MP Guidelines)

Agreed summary of oral submission - De-identified

16 March 2023

General observations

• The changes made to the regulatory framework under the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards Act 2019 (VIRTIPS Act) have been very positive, particularly in providing structure and meaning.
• There is room for improvement in bridging the gap between the role of the Tribunal in making the MP Guidelines and the Department of Parliamentary Services (DPS) in interpreting the Guidelines.
• Improvements to the framework could include:
  • the establishment of a consultative committee consisting of MP representatives and DPS to discuss matters of interpretation
  • DPS being required to make automatic submission to Tribunal in matters where differences in opinion between an MP and DPS about the interpretation of a Guideline.

Communicating with the electorate

• Recent changes made by the Tribunal to the MP Guidelines resolved many issues related to joint communication, although there are some remaining issues.
• The first issue relates to authorisation of joint claiming of costs (s 14(1)(2) and (3)) of the Guidelines. DPS have raised concerns where joint communication uses first-person language, and has introduced a ‘content’ provision, for example, that a joint communication should contain an approximately even distribution of photos of MPs.
• The second issue relates to advertising, where s 14(1) states that advertising with another member is allowed within the MPs electorate area. This means that:
  • An upper house MP sharing a geographic region with several lower house MPs is only being permitted to jointly advertise with only one lower house MP, rather than all of the relevant lower house MPs in the region and would only be permitted to advertise with one other upper house MP in the same region.
  • An MP cannot jointly advertise with other MPs in different geographic regions, for example, taking out a joint advertisement in a community newspaper to wish constituents ‘Season’s greetings or ‘Happy national day.’
  • When MP’s advertise in multicultural publications/media for significant occasions, like National Day’s, they are required to specify that the message is directed to electors in their districts/regions, even though the message will be seen more widely by those celebrating the occasion who don’t understand why the MP is not extending the same message to them.
• The third issue relates to advertising in a statewide publication, for example, the State Emergency Services’ magazine for volunteers. This is currently not permitted, as it is distributed to areas outside an MPs electorate.
• The fourth issue relates to the interpretation of s 15(1) (2) and (3) of the Guidelines, whereby claims have been denied for communicating about services being provided outside the MPs electorate (for example, a hospital; road project), even though constituents are accessing these services.
• A potential improvement would be for DPS to proactively produce and maintain a ‘bank’ of communications materials that would provide examples to MPs of permitted communications. This would save time.

Petitions

• Section 9(1)(j) of the Guidelines states that the Electorate Office and Communications Budget cannot be used for petitions that are not in an appropriate form for either House of Parliament. In practice, this means that costs of an MP initiating or supporting petitions for other legitimate purposes and for other levels of government (e.g. Councils) are considered to be not consistent with the Guidelines.

Travel allowance

• During parliamentary sitting weeks, MPs may claim the travel allowance for costs of attending the usual sitting days of Tuesday, Wednesday and Thursday. However, they are only able to claim the travel allowance for the Monday of a sitting week under limited circumstances, which is a day where planning and preparation for the sitting week and other meetings are usually held.

Airport parking costs

• MPs are unable to claim the costs of parking at the airport when undertaking their public duties. This would be more cost-effective then claiming the allowable costs of taxi fares to and from the airport.

Post-election expenditure prior to the return of the writs

• Returned MPs are unable to claim for expenditure incurred in accordance with the Guidelines until the return of the writs. This means that for example, MPs are unable to send out Christmas cards to constituents due to mail deadlines. An alternative would be to allow MPs who expect to be re-elected based on provisional results to be reimbursed prior to the return of the writs.

Authorisation of materials

• Potential issues with the interaction of Victorian Electoral Commission requirements and MP Guidelines regarding authorisation requirements.

Electorate office costs funded by DPS

• It would be helpful to have a definition of the standard costs of an electorate office that are funded by DPS. For example, cleaning costs are not covered and are the responsibility of the MP.

EO&C Budget formulas

• The formulas for the EO&C Budget result in an approximate equivalence between the values of the EO&C Budget for each electorate, even though upper house MPs generally have greater numbers of constituents compared to lower house MPs.

International travel allowance

• While outbreaks of COVID-19 restricted the ability of MPs to undertake international travel, parliamentary committees are now adopting both remote and in-person work practices. This may have future implications for the value of the international travel allowance.

Agreed summary of oral submission - De-identified submission 16 March 2023

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23 March 2023

General observations

• The Tribunal’s Members of Parliament Guidelines (MP Guidelines) govern the use of work-related parliamentary allowances and the Electorate Office and Communications Budget (EO&C Budget). It is important that proposed changes to the regulatory framework, for example, the introduction of a parliamentary ethics committee, complement this role.
• In some cases, it would be desirable to align the Guidelines with other jurisdictions, particularly the Commonwealth Government. For example, there are different definitions of ‘party political activity’ in the Victorian and Commonwealth approaches. This means that a marquee/tent can display a party logo at the Commonwealth level, but would not be permitted under the Victorian approach.

Authorisation requirements

• Prior to the last election, the Department of Parliamentary Services (DPS) issued guidance to MPs that if communication material was deemed by the Victorian Electoral Commission to require authorisation, then it would not be eligible for reimbursement from the EO&C Budget.

Approval processes

• DPS does not have a pre-approval process, whereby MPs can purchase items and be assured that they will be able to claim back from the EO&C Budget. Rather, DPS may state upfront that they do not see an issue with the purchase, but may deny the claim as non-compliant with the MP Guidelines once submitted.
• A potential improvement would be for DPS to proactively produce and maintain a ‘bank’ of examples of permitted communications materials. For example, pictures of pens with permitted detail would be helpful.
• There were examples, including for tent logos and pens, where there were successful appeals that other MPs were unaware of, or inconsistent advice from other DPS staff.

Joint advertising

• DPS’ interpretation of the Guidelines means that MPs are restricted from advertising with more than one member. Any joint advertising also has to be within the MPs electorate. It would be better value for money if MPs were permitted to jointly advertise with multiple MPs, including with MPs from different geographic areas.
• The demise of local papers, particularly in metropolitan areas, means that advertising in state-wide publications is increasingly important.

Adequacy of EO&C Budget

• Increases in Australia Post charges means that it the EO&C Budget is only sufficient for one communication mail-out per year, rather than two.
• Australia Post provides discounted rates for bulk mail outs to Commonwealth MPs and local councils, but not to State MPs.

Opportunity for greater use of shared services

• There is an opportunity for DPS to explore greater use of shared services. For example, each MP incurs multiple subscriptions costs for software licences, for example, Adobe professional.
• MP often pay for expensive items on their credit cards, for example, a couch for their electorate office, and have to wait 8 -12 weeks for reimbursement, resulting in additional credit card charges.

Role of an MP

• The outbreak of COVID-19 resulted in a substantial increase in the number of queries to MPs’ electorate offices. While the volume of queries has since reduced slightly, the volume is still much higher than pre-COVID-19 years.
• The use of social media to communicate with, and respond to, constituents is also much more common than previous years.

Post-election expenditure prior to the return of the writs

• Returned MPs are unable to claim for expenditure incurred in accordance with the Guidelines until the return of the writs. This means that for example, MPs are unable to send out Christmas cards to constituents due to mail deadlines.
• An alternative would be to allow MPs who expect to be re-elected based on provisional results to incur the expenditure, and then be reimbursed on return of the writs (i.e. the MP would bear the risk).

Parliamentary accommodation sitting allowance (PASA)

• The PASA enables eligible regional MPs to have a stable residence in Melbourne in which to stay when undertaking their public duties, including undertaking Committee business. This is a particular issue for MPs with family responsibilities.
• If the PASA was not available, MPs would have to rely on claiming the travel allowance, a more cumbersome process in terms of collecting and submitting receipts compared to claiming the PASA on a once a year declaration.

Other matters

• MPs support retention of the existing 28km boundary for claiming the travel allowance for undertaking parliamentary business, committee business or Ministerial business.
• Consideration should be given to allowing road tolls to be claimed from the EO&C Budget.
• Further clarification could be provided about allowable use of the EO&C Budget, for example, seedlings for the local fete; school breakfasts; small gifts for delegations visiting Parliament.
• If new parliamentary committees are created, consideration should be given to how Chairs and Deputy Chairs of those committees are remunerated.
• Regional electorate staff are unable to claim reimbursement for travelling to their principal place of work, which may be 2-3 hours away in some cases.
• Need to carefully consider consequences of any further roll-in of allowances to salary, for example, impacts on superannuation entitlements.

6 May 2022

Samantha Ratnam MLC

State Member of Parliament for Northern Metropolitan Region

Leader of the Victorian Greens

Suite G01, 60 Leicester St Carlton VIC 3053

Electorate Office Phone: 03 9348 2622

Email: samantha.ratnam@parliament.vic.gov.au

Tribunal Secretariat

Victorian Independent Remuneration Tribunal

Email: enquiries@remunerationationtribunal.vic.gov.au

Dear Tribunal Secretariat

Submission from Australian Greens Victoria Members of Parliament

I wish to make the following submission on behalf of the Members of Parliament from the Australian Greens Victoria for consideration in your next determination of salaries and allowances provided to Members of Parliament (MPs) in Victoria.

1.Salary cap of 1.5% for Members of Parliament

The Australian Greens Victoria MPs propose that if the Tribunal was considering increasing MP salaries, any increase should not exceed 1.5% given our generous base salary and the public sector wage cap that the Victorian Government has imposed on the rest of the Victorian Public Service. No more than a 1.5% wage increase is appropriate and is consistent with the Victorian Government’s current wages policy and enterprise bargaining framework. We believe it is unnecessary and inequitable for members of parliament to receive wage increases in excess of those being offered by the government to other public sector workers.

2.Electorate Allowance and Electorate Office and Communications Budget

In previous submissions to the Tribunal, we have outlined how the work of cross-bench MPs differs from that of Government and Opposition MPs. Notably, that the structures to support the work of Members of Parliament, including staffing and the system of remuneration and entitlements, are designed around the assumption of a two-party system.

The current system treats all MPs who are not Ministers or Shadow Ministers as being in one category equivalent to government or opposition backbenchers. However, the reality of the Victorian Parliament is that these categories do not reflect the role, workload and functions of our work or that of the significant number of Victorian MPs on the cross-bench.

Our experience is that we operate more like the opposition shadow cabinet, with shared portfolio responsibilities on top of general representative and local constituent work. We are required to be across all legislation and other parliamentary business, develop positions on matters within all portfolios, as well as meeting the needs of our tens of thousands of constituents engaging with our electorates and constituencies on what we stand for, what we are doing and how it affects them.

To give you an idea, MPs are given 2.5 EFT staff to cover all their work. As Greens MPs we tend to structure our offices so that we have a role that focuses on managing the office and responding to constituents as well as managing the MPs diary, local events and relationships with community groups and all correspondence received by the office; a role focused on supporting all our parliament and policy work; and a role focused on communicating our work to the electorate.

Communications is becoming a more intense job in the digital age including needing to monitor and respond to several social media platforms, manage posts and responses, especially now we are often held accountable for ensuring comments on our social media by other people are not defamatory or abusive.

Each of these roles is at least one full time job if not much more - yet we are required to fit them into 2.5 EFT so we need to rely on part-time staff or on significantly utilising the Electorate Office and Communications (EOC) budget to engage additional staff. This is further problematic because such staff can only be employed on a casual basis.

While there has been evidence out of IBAC about electorate office staffing entitlements being misused by some members this is not a reflection of the work that is actually done in a functioning committed local MP’s office, particularly the cross-bench.

While we appreciate you have not requested submissions on the structure of the staffing and entitlements we believe this provides important context for your decision-making especially because it relates to significant pressures on our limited EOCB allocation.

In relation to the Electorate Allowance and Electorate and Office Communications Budgets, we primarily use these budgets to communicate with our constituents both online and offline. However, it also needs to be used to cover additional staffing needs, security and servicing of the office, buying office equipment, other local constituent costs, local and online advertising, phone bills and other administrative costs.

We note the increases in postage costs, in particular, as well as general inflationary pressures mean the existing EOCB and EA are reducing in value. For example the EOCB can now only provide for one (maximum) addressed mail to the electorate per year. It generally costs around $50,000 or more to send one very simple letter/piece of mail to every household (not even every constituent) in one lower-house electorate. This means we’re required to spend roughly a third, if not more, of our entire combined annual EOCB/EA budget just sending one letter to each household in our electorate, before we even factor in additional staffing needs, costs to run our office, other community needs and everything else we need to cover from these budgets. It is becoming increasingly difficult to effectively communicate with our constituents about our work on the budgets supplied. Our constituents expect to hear more regularly from us as their elected representatives, and we regularly hear this from people in our communities.

We request you consider the extent to which the EA and EOCB are being reduced in value, particularly in respect of providing the means for effective communication with constituents and adequately cover staffing needs, particularly of cross-bench MPs Thank you for considering this submission.

Yours sincerely

Samantha Ratnam MLC

Leader of the Victorian Greens.

Submission from Samantha Ratnam MLC, Leader of the Victorian Greens, made on behalf of MPs from the Australian Greens Victoria

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Agreed summary of oral submission to the Victorian Independent Remuneration Tribunal forthcoming Members of Parliament (Victoria) salaries and allowances Determination 2023 and review of the Members of Parliament (Victoria) Guidelines (MP Guidelines)

Victorian Parliamentary Former Members Association Inc.

27 March 2023

Background

• There are just over 300 former MPs in Victoria, and the Association has active contact with about 275.
• The Association’s financial membership comprises around 190 former MPs, and the Association provides services to former MPs in care at no cost.
• The Association works closely with the Victorian Parliament, and has also been pleased to see that its past submissions to the Tribunal have been considered.

‘No disadvantage’ test

• The ‘no disadvantage’ clauses in the Tribunal’s governing legislation clearly demonstrate Parliament’s intent that both current and former MPs could be affected by the Tribunal’s Determinations. For example, superannuation/pension arrangements can be affected by changes to the current values of salaries and non-salary components. VPFMA submits that the “No Disadvantage” indicates Parliament’s intent and should be interpreted broadly.

Post-MP life and the adequacy of the separation payment

• Following an election, the Association contacts MPs who have lost their seat in the following February. Those who have planned their departure are generally better placed to find another role or return to their previous profession. Others with unplanned departures are often shell-shocked to have been ‘rejected’ by their electorate and require professional help. There can be similar feelings to those experienced by professional athletes whose career is ended earlier than they would have expected.
• Former MPs who previously worked in a profession, such as law, teaching or medicine, can find it difficult to return to their profession. For example, they have been unable to keep up their professional accreditation or registration requirements, or the profession has moved on.
• One solution would be for the Parliament to support MPs keeping up their professional accreditation while in Parliament.
• The separation payment is preferred to the former resettlement allowance in supporting defeated MPs. However, there can be significant difficulties for defeated MPs in finding suitable employment:
  • As the election falls in late November, the chances of finding suitable employment over the November to February period is low — for a one term MP, this means the payment runs out as the employment market gains strength.
  • Many companies, fearing perceived partisanship, hesitate to take on someone from the opposition party particularly after a change in government.
  • In most cases, it can take more than 6 months to find employment as a norm, and in some cases up to 4 years.

• Consideration should be given to:
  • Whether the separation payment is its serving its intended purpose, given these difficulties.
  • The feasibility of support to current/former MPs to complete a tertiary degree, trade or other vocational qualification during their time in parliament, or within two years of leaving. Parliament currently pays for an Australian Institute of Company Directors course but few former MPs end up as company directors.

Work value of an MP

• The role of an MP is changing rapidly, in line with increased community expectations and the speed of electronic communications. For example, the volume of email received is enormous.
• The Tribunal in looking at workload, should consider not just legislation passed by the Parliament, but also legislation which is introduced/debated but does not proceed.
• There are much greater security requirements for MPs compared to in the past.
  • The physical barriers to entering an electorate office, and separation between electorate office staff and members of the public who enter offices are an indication of risk to MPs
  • There can also be considerable risk to the personal safety of MPs when they are in public.
  • Security risks can also affect a MPs family.
• The quality of a democracy cannot be separated from the quality of the people who serve in Parliament. Without quality people, democracy suffers, and remuneration plays a part in attracting and retaining of MPs.

Agreed summary of oral submission - VFMPA March 2023

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