Saturday, February 24, 2018

Weighing the MPs’ pay scale


Mark Fraser

 Without completing the work on base salaries, the current proposals to increase pension benefits for legislators involve guesswork. As the already costly improvements are being discussed, it is time to return to two more urgent and fundamental compensation points. The November 2013 report of the Salaries Review Commission (SRC) recognised that a job evaluation exercise and compensation survey was imminent. This would resolve the question of the full time or part time nature of an elected member’s work and enable the SRC to get to a more realistic base salary for a Member of Parliament. This work, even before the review of pensions, should be completed urgently and presented to the public with full cost implications. Until then, pension revisions remain guesswork. 

The issue of revised base salaries for members of the House and the Senate was left in limbo in the SRC’s 98th report. The SRC recommended that the full time or part time nature of the role of MPs be dealt with in the job evaluation exercise and compensation survey “which is about to commence”. Base salary is used to calculate pensions and if we improve the formulae for calculating pensions without settling base salaries the final cost of those improvements is unknown. Until the SRC settles that base salary question, all benefits calculated using base salaries should be maintained. 

The SRC recognises that the role of MP is multifunctional and onerous. Without much effort we can see the increased demands on an MP’s time and expertise. These demands will continue to grow. MPs have ongoing obligations to constituents, regulators and other oversight bodies, the judiciary and other constitutional bodies, and the media. 

Other demands are driven by the need for major legislative reform to combat crime, respond to technological changes, meet the requirement of trade agreements, and position the country to compete. This is not a question of the time and expertise MPs commit but the quantum of compensation we must pay for that commitment.

But even with the time commitment question being moot, it should be resolved before the changes to pension benefits are finalised. Even without increasing pension benefits by changing the formulae for calculation, base salary increases will trigger increased monthly pensions. With the reviews underway, we do not know at what levels base salaries will settle and we can only guess the cost of future pension benefits. And, if the formulae for calculating pensions are enhanced without settling the base salary question, we will still not know the full cost. 

Since matters of base salaries and pension benefits to MPs place those very MPs in the awkward position of having to give themselves increases, there must be two pre-conditions. First, the SRC must settle base salaries on an urgent basis. And second, the public must be provided with the full cost of retroactive increases and future payments. To simply approve pension increases leaves the question of cost unanswered. And in the absence of incomplete elements, that cost question is unanswerable.

It is bad enough that Parliament is a rare workplace where “employees” give themselves raises without discussions on performance measurement, rewarding excellence and punishing poor performance. Perhaps that is the function of periodic elections, but in reality elections do not always distinguish between the good and bad. Compensation must do that but we are long way from there when you consider that we cannot see the obvious answer to the question of whether the work of an MP is full time, part time, or guesswork. 

Clarence Rambharat is a lawyer 

and a university lecturer