In Estimates I asked the Finance Minister why retired Canberra bureaucrats should be receiving pensions much higher than those in the private sector, especially when the bureaucrats were highly paid throughout their working careers.
The cost of these pensions as modelled by the Finance Department is $335 billion for 165,000 retired bureaucrats. (I am not referring to the military pension.)
This works out at $2 million per bureaucrat. There are 40,000 who receive over $75,000 at a cost of $137 billion or almost $3.5 million each despite these people being very highly paid throughout their careers.
The fact that both major parties have sat on their hands about this shows they are in bed with the Canberra bureaucracy.
Don’t believe them when they say they care about hard working Australians. They don’t. If they did they would stop this rort immediately.
People First is the only party that has a policy to end this theft of taxpayers money.
Finance and Public Administration Legislation Committee
05/11/2024
Estimates
FINANCE PORTFOLIO
Department of Finance
Senator RENNICK: I have a question for you, Minister. It’s been reported recently that David Anderson, the former CEO of the ABC, is expected to retire on about 37 per cent of his final salary. His final salary was about $1.1 million, and he’s expected to retire on a 37 per cent defined benefit scheme. In other words, he’ll get approximately $400,000 or 37 per cent of his final salary. Do you think it’s fair and equitable that well-paid bureaucrats are paid such a high amount of money in retirement? Would you consider means testing such generous gold-plated defined benefit schemes?
Senator Gallagher: Means testing in the sense of having an income limit?
Senator RENNICK: For a pension, for example, if you’ve got assets of more than around $850,000, you don’t get a pension if you’re a retiree, and the full pension starts to diminish once you get to $312,000. So people in the private sector have to have an assets test and an income test to get the pension. Would a similar thing apply to the bureaucrats who’ve retired? For example, if David Anderson’s been earning something over $1 million for the last five years, should he really be getting another $400,000 every year until he passes away?
Senator Gallagher: I presume his employment arrangements are subject to the Remuneration Tribunal. We have no plans to change that. These are matters that are determined independently of politicians.
Senator RENNICK: I realise that, but we can decide to put a threshold on this figure. We’ve got a cost-of-living crisis, and there are lots of people out there that could do with a bigger tax cut, for example. I just don’t think it’s fair—and I say this as a matter of policy—that someone who earns more than $18,200 has to pay 16c plus two per cent Medicare, yet we can have other retired bureaucrats getting a large swathe of money despite the fact that they were paid very well throughout their working career. It seems upside down to me.
Senator Gallagher: There’s a new chair of the Remuneration Tribunal. That’s where these arrangements are agreed and set for the ABC, I presume—or is that done by the board? Anyway, we’d have to check.
Mr Williamson : Yes, we’d have to confirm. It think it probably would be, ultimately.
Senator Gallagher: It’s a broader point you’re raising, because it’s not just about one individual.
Senator RENNICK: No; it’s not just about one individual. There are approximately 40,000 people who get more than $75,000 a year. I’d imagine that a lot of those people would’ve been paid very well throughout their working career. I know the original purpose of the defined benefit scheme was to compensate those who weren’t paid as well, but many people in the public sector now get paid more than people in the private sector, so it’s no longer necessary to have a defined benefit scheme. We got rid of it for—
Ms Wilkinson : Those schemes are closed.
Senator Gallagher: Yes, those schemes are closed for those reasons.
Senator RENNICK: I realise that, but there’s still something like a couple of hundred billion dollars worth of outstanding liability out there. As I said, we’ve got low income earners paying a decent rate of tax. I would’ve thought that was a policy issue rather than a Remuneration Tribunal issue.
Senator Gallagher: As far as I’m aware, the government is not considering changes to that.
Senator RENNICK: You don’t think they should consider it? It’s not a policy you’d consider?
Senator Gallagher: I certainly have had some discussions with the new chair of the Remuneration Tribunal around making sure that determinations are commensurate with positions of equal value and stature in the private sector. We have to attract people into these jobs. Often the public scrutiny can be a bit of a disincentive, so I think you do have to have a good remuneration offering to offer people, but I also think it needs to keep in line with community expectations.
Senator RENNICK: That’s a very good point.
Senator Gallagher: I have had that discussion with the Remuneration Tribunal chair.
Senator RENNICK: So it’s the Remuneration Tribunal chair?
Senator Gallagher: Yes.
