The Salaries Review Commission’s (SRC) dereliction of duty forced the Government to act on judges’ and parliamentarians’ pensions by drafting the two pension bills and forced Parliament to respond.
This is the view of Independent Senator Rolph Balgobin.
Speaking on the Judges Salaries and Pensions Amendment Bill in the Senate yesterday, he asked: “Has anyone resigned from the SRC? I can’t imagine how they could sit there with all of the things we have said about them and sit there.”
Balgobin said the SRC’s failure, over more than a decade, to perform the duties set out for them in the Constitution, “endangers the separation of power by placing the Executive in a position where it feels it must act, and the legislature in a place where it feels it must respond.”
He said if the formula proposed in the pension bills is to calculate pensions for judges and MPs, it would precipitate “an industrial relations crisis”.
“You can’t roll allowances into pension calculation. We just can’t. Allowances are there to help you with the cost of doing the work. When you stop doing the work, you don’t get the allowances,” he said, adding: “An actuarial crisis of significant proportion awaits.”
He said the proposals were not grounded in any sensible pension management arrangements.
“Everyone is trying to move towards defined contributions. Here we are saying we are going to define your benefits and will do so in a way that it keeps escalating, because it is indexed to the current salary. So the SRC’s failure now sees us trying to adjust pensions to make up for what salaries could not do.”
Balgobin said the simple fix is to change the base salaries because they are too low.
He quoted some existing salaries—the Prime Minister $59,000; Commissioner of Police ($31,080); DPP ($32,000); Commissioner of Prisons ($28,720).
He said many of these job titles were in charge of hundreds of millions, if not billions of dollars.
“But we pay pennies. We undervalue.”
Balgobin said the growth of the economy and the budgets had overtaken the arrangements for salaries for key office-holders.
“It causes you to wonder how are we to attract talent to the public sector?”
He said the SRC needs to rid itself of the “Jurassic” assumption that public duty should attract a discount.
Balgobin said salaries should be raised and the retired judges should be given an ex-gratia payment.
“For the retired judges, put a sum of money in the budget...you don’t need to pass a law...to address this specific problem. I don’t think judges who are retired and judges who are currently servicing should be bundled together,” he said. “Truck and trailer are not required here. We should de-link the issue of the retired judges from the existing judges.”
Balgobin said the Integrity in Public Life Act, Section 29 (1) and (2), states that “we should tread carefully, that we should be mindful of our conflict. For those of us who are in support of this, we must be seen not to be making laws to fix up friends and colleagues. We must be mindful that some of us who are in vociferous support today have to appear before some of these people (judges) tomorrow.
“Because if we are not, I can tell you the rest of the country is,” he added.
“There is tremendous heat in the society... Outside there is boiling and these are things that provide a source of ignition. And they are holding this up in some circles as an example of elite capture.”
Balgobin concluded by stressing that the SRC must be compelled to act and not just “protect turf”.