How much should we pay our pollies?

Among the many criticisms of politicians is the accusation that they are only in it for the pay and perks, looking after themselves rather than the country and voters.

Sometimes this arises from dissatisfaction with certain politicians, but it also reflects disdain for them all. Many Australians are convinced politicians are self-serving and paid far more than they are worth.

This prompts the question – how much should politicians be paid? Indeed, should they be paid at all? Should parliamentary service be a career, or a form of public service necessitating an element of sacrifice? And if politicians are to be paid, what is an appropriate amount?

In democracy’s ancient home, Athens, eligible citizens all had a civic duty to participate in the governing assembly. There was no salary, although in the 5th century BC an attendance fee was introduced as an incentive.

In the British parliament, on which our parliaments are based, service in the House of Commons was unpaid until 1911. Members of the House of Lords, who are mostly appointed, are still unpaid unless they hold an official position. They can claim an attendance allowance plus limited travel expenses, although many do not bother.

Politicians in several US states receive little or no pay for their service. In New Hampshire, for example, state legislators are paid just US$100 a year plus mileage. In Kentucky, Kansas, Nevada, Wyoming and New Mexico, state politicians are paid less than what Australian local government councillors receive.

Heads of government are mostly better paid. Top of the list is the prime minister of Singapore, at more than two million dollars and over five times the pay of ordinary MPs. Australia is relatively egalitarian; our political leaders are paid roughly double what ordinary politicians receive.

But it is the pay of ordinary politicians that agitates people, and on that Australia is generous. A backbench member of the Federal Parliament receives a package (i.e. salary, allowances and superannuation) of about $300,000. State politicians’ salaries are only slightly lower.

This is far more than what most of them earned before they were elected and, more importantly, more than what they could earn if they lost their seat. This has a powerful effect on their behaviour.

When politicians are unpaid, or even if they are paid modestly, different people offer themselves for election. In New Hampshire, for example, a 2007 survey found that nearly half the members of the legislature were retired, with an average age over 60. Those not retired had jobs or businesses from which they derived income.

In Australia we see this with local government councillors – virtually all have another source of income, whether it’s a job, a business, welfare or investment income.

Politicians also behave differently when unpaid. They do not fear the loss of income if they lose their seats, which means they more willing to act according to their convictions. They have a life outside politics, which makes them less likely to become institutionalised. The worst outcome from losing their seat is a reduction in relevance.

It might nonetheless be argued that if a politician is working long and hard, they should be remunerated appropriately. Otherwise, talented people who might contribute to a better government are likely to avoid entering politics.

When I was a senator, I was often quite busy. There are not only long days in Canberra but also committee hearings and a stream of people seeking help.

But parliament only sits for about 20 weeks a year, and much of the work is unproductive. Most activities undertaken by politicians are actually designed to help them get re-elected. Being paid a handsome salary with generous expenses while doing this gives them a big advantage over their unelected competitors.

The fact is, our MPs have a lot of time-flexibility. Some undertake additional study or write a book, a few maintain a professional interest (such as doctors), while others remain involved in an outside business (as I did). The workload of ministers can be higher, but much of it can be delegated to staff.

The obvious question is, how much work is actually necessary? Do we want parliaments sitting for long periods, constantly introducing bills and regulations? Or are we better off if they sit for short periods and essentially leave us alone?

Parliaments that over-regulate our lives typically sit longer and pay their politicians more. This is seen in California where state MPs are paid US$128,000 a year and sit for 47 weeks a year, and in Illinois where they are paid $89,000 and sit for 20 weeks. Both states are Democratic strongholds.

By contrast, in the Republican states of Louisiana and Florida, the state parliaments sit for just eight weeks a year and their state MPs are paid US$16,800 and US$30,000 respectively.

If entering politics was motivated by service to the country rather than having a lucrative professional career, it would attract people who have done more than navigate their way through a party, work for existing politicians, and manipulate numbers to gain preselection.

They may want to be re-elected in order to finish what they have started, but they would not be so desperate that they abandon their values. They would engage in politics for a specific reason and, having pursued that reason, leave and return to their outside life. A term limit of something like ten years might help ensure that remained the case.

Political service ought not be substantially different from serving on the board of a charity or other non-profit organisation, with reimbursement of expenses and possibly an attendance fee. It should certainly not be a better paid job than anything else an incumbent is likely to achieve. Our politics would be substantially improved if we stopped paying our politicians so well.