| 20.05,09. 07:01 AM |
Big chill: MPs hit by freeze on wages
May 20, 2009
POLITICIANS, judges and senior government executives will have their pay frozen until at least September 30 under a surprise ruling handed down by the Remuneration Tribunal.
The tribunal had been expected to announce a wage rise from July 1 and its decision to defer its annual pay review comes after it faced criticism that it was ignorant of the recession after it awarded federal MPs a $4700-a-year rise in their electorate allowance to $32,000.
Last night's statement, posted quietly on its website, means federal MPs face the prospect of the pay freeze imposed by the Prime Minister, Kevin Rudd, last year to fight inflation, lasting for at least 15 months.
Mr Rudd's office confirmed he would extend the freeze for another three months and did not rule out extending it further.
"The freeze will remain in place until the Remuneration Tribunal makes a recommendation, at which time the Prime Minister will consider the matter," a spokesman said.
But a week after the Government handed down a budget predicting a record $58 billion deficit and unemployment to hit 8.5 per cent, Mr Rudd is expected to face protests from some of his backbenchers who have been grumbling about last year's decision which froze the pay for a backbencher at $127,060, and denied them a pay rise of $5400.
"That pay cut did not win a single vote but it has hurt politicians and in the long run it will make it harder to attract good quality candidates to stand for public office," one MP said.
Another said they feared Mr Rudd would be stung by the 10-point drop in his approval rating in this week's Herald/Nielsen poll and extend the freeze to boost his numbers.
Senior executives in more than 40 government-owned businesses and agencies such as the Reserve Bank, ABC, electoral commission and the Productivity Commission, will also have their pay frozen, as will judges, who had been in line for a 6 per cent pay rise.
The Attorney-General, Robert McClelland, sent the tribunal a letter two weeks ago, urging it to tone down the proposed pay rise for judges. "The global financial crisis has had a significant impact on the national economy and is an important factor to consider," the letter said.
The three-person tribunal, headed by businessman John Conde, sought to defend itself from recent criticism by the Greens leader, Bob Brown, and the independent senator Nick Xenophon, saying it considered data from "various sources as well as external factors".
The statement set out the case for a pay rise saying inflation increased by 2.5 per cent in the year to March and average pay rises in the public sector were 4.4 per cent. It said senior public servants' pay had risen by between 5 and 6 per cent.
The tribunal also said it was concerned that the pay of ministers and senior officer-holders was falling behind senior public servants "notwithstanding the fact that economic circumstances remain difficult".
But despite laying the ground for a rise it held its fire. "The tribunal has therefore decided to defer any decision on an annual adjustment until after 30 September 2009," it said.
Senator Brown, who last week said the tribunal members were "living in some isolated world" where the recession does not exist, said he was puzzled by the statement.
" I can't help thinking they've put off this decision for three months in the hope they'll get some political signal.
"The tribunal doesn't know what to do. Maybe they should take a pay cut."
He called on Mr Rudd to impose a further 12-month freeze on politicians' pay during the worst point of the recession.
One concession awarded to MPs was that they will be able to claim their parking bills at airports if it was cheaper than using a taxi or comcar.