Friday, February 23, 2018

A case of robbery with V!

Like thieves in the night, or in this case like thieves in broad daylight, the politicians in our Parliament, all of them, on both sides of the aisle, conspired on Friday 13 last to perpetrate on this already battered nation the most blatant and boldfaced act of self-enrichment ever witnessed in our political history.

The vehicles used for this political grand larceny were the Judges Salaries and Pensions Amendment Bill 2014, and the Retiring Allowances (Legislative Service) Bill, 2014, both of which were passed in the House without objection or opposition from any quarter and which now go to the Senate for debate.

These two bills propose sweeping changes to the structure of pensions for judges and parliamentarians the result of which is that these persons would immediately receive huge increases in their pensions; would receive these for life; and in the case of the judges can never have them reversed.

First the judges, and let us in this context note that the bills for amending the pensions of judges and those of MPs were brought together. In this case we have the irony of parliamentarians seeking to hide behind the robes of judges as they carry out their plan.

The Judges Salaries and Pensions Amendment Bill proposes, first of all, to index the pensions of judges to the current tax-free salary and tax-free allowances of sitting judges. There are two glaring problems here. First, while the principle of indexation of pensions is a well-known and laudable one, such indexation is commonly tied to cost-of-living increases so that the individual’s actual pension is protected from inflation.

It is fiduciary madness in the extreme to index pensions to the current salaries of sitting judges. This means, in fact, that recurrent salary expenditure will expand exponentially and can never be controlled.

The second major problem is the fact that the bill not only indexes pensions to current salaries but seeks to include all tax-free allowances as well. This is unheard of in pension management anywhere and, if passed, would immediately result in a huge explosion of the current pension costs.

For example, the Chief Justice currently receives a salary of $50,350, a housing allowance of $28,000, a judicial contact allowance of $118,000 and a transport allowance of $5,040. Monthly allowances therefore add up to more than $42,000. So the pension of a retired CJ, instead of being $50,000, will jump to approximately $92,000. The same principle would apply to all other judges and judicial officials.

For the MPs much the same principles apply. The only difference is that the pensions of parliamentarians are subject to tax and there is a graduated percentage of the salary and allowances depending on years of service. But for parliamentarians too, allowances are now to be included in pensions and indexation is based on current salaries and allowances paid.

In addition, there is now to be introduced a termination benefit for members of the Lower House when they leave office, which equates to one half of their annual salary in addition to the gratuity paid to all MPs at the end of every term.

There is no justification for any of this except the blatant and corrupt desire to enrich themselves at taxpayers’ expense. In so doing they set themselves apart from all other citizens and declare themselves untouchable.

When you and I work all our lives and contribute to our pension plans current legislation decrees that we can only receive as a pension a maximum of two-thirds of our final salaries. Our pensions do not include any allowances which we may have received and in most instances there is no indexation, not even to the cost-of-living, far less to current salaries.

It is interesting further that both of these bills were introduced and passed in the House without any actuarial report or any kind of financial estimate to suggest what their provisions would mean in terms of costs going forward.

Almost a year ago, in one of these columns entitled “The corruption plague”, I wrote that “the inability and incapacity of those in government to perform properly leads to a situation in which the best of intentions, even if such existed, swiftly degenerate into a rapacious self-interest as their failure to perform raises the dire prospect of being thrown out of office next time around.”

That is exactly where we are with this Government. Note that the current Opposition is not even bothering to wait until it gets into government before it unapologetically indulges in its own rapacious self-interest.