The Mum Network

Australian Politicians Get a Payrise And People Are Outraged? Really?

Ok people. CALM DOWN!

Australian’s Politicians are set to see their salaries soar. Backbenchers set to receive an extra $40,000 a year, up to $180,000. The Prime Minister to get a $90,000 payrise, earning $470,000 and the Aussie media are loving making the point that our PM will now be paid more than Barack Obama. In my opinion, Obama is grossly underpaid.

I was the Managing Director of a big company a few years ago and in the very early days the business wasn’t doing as well as it could but we knew the potential and we knew we could make it phenomenally successful. My management team and I decided that we would put a freeze on our own salaries and work towards making the company the best it could be (insert my holier than thou Halo here). Once we had achieved our goals, we knew the proof was in the pudding and everyone was rewarded for years of hard work but it was a strong message to our staff and to our shareholders that we had a common goal and that success should and could be rewarded. It’s all about timing.

Like Allan Joyce, the Qantas CEO who bumped his salary up from $3million per annum to $5million per annum recently, our politician’s timing is appalling. It’s very insensitive to announce budget cuts and how they’re going to save money to get the budget into surplus and then award themselves a massive payrise. It’s absolute proof that our current politicians will put themselves first before their constituency.

However, there is a separate issue here and I’m pretty sure it was the Late Kerry Packer who first planted this in my mind (I could be wrong). If we pay our politicians crap money, we’re going to get crap politicians. If we offer decent salaries to our politicians, we’re going to attract a higher caliber of professional who knows what they’re doing and we won’t have to put up with mediocre politicans anymore.

Anyone who knows a politician will know the good ones work harder than than any of us. A 40 hour working week doesn’t exist, they’re available 24/7 and there is no such thing as a weekend. In addition to looking after their own constituency, a politician with a portfolio has to be across everything. Kevin Rudd is one politician who’s known as a workaholic. I met his Chief of Staff when he was Prime Minister and the hours that entire office worked were incredible. They were on and available for the PM at all times. If he didn’t sleep, they didn’t. It’s grueling and on top of that, we the Australian Public expect more from them. The PM’s job is the highest in the land, they manage the money in, the money out, the people, the international relations, business and social fabric of the land and we pay that person less than a guy who runs an airline? I think it’s appalling.

Let’s give some perspective here. Ministers in Singapore are the highest paid politicians in the world, receiving a 60% salary raise in 2007 and as a result Prime Minister Lee Hsien Loong’s pay jumped to S$3.1 million, five times the US$400,000 earned by President Barack Obama. Although there was a brief public outcry regarding the high salary in comparison to the size of the country governed, the government’s firm stance was that this raise was required to ensure the continued efficiency and corruption-free status of Singapore’s “world-class” government.

Singapore pay their politicans more money because they want to avoid corruption and if the pollies are paid well, there’s less temptation to abuse the power given to them. It’s a sound argument and whilst I’m not saying our guys are corrupt, can you imagine if we did attract some of the smartest business leaders in the land to run our country because we offered decent pay?

The best business people won’t apply for the role of PM  in Australia because they can earn ten times more in the private sector and not working as hard under the microscope of the Australian public. When you’re running the biggest business in Australia, that of the Australian Government, you should be paid the highest salary. If you don’t do a good job and earn that salary, you will be ousted. The Australian public would ensure that much.


  1. Stu

    I think the problem with this argument is that in corporate world, if a business leader is not performing, they must answer to the shareholders through the board. More importantly, that board has the power to remove the leader at any time during their tenure if they feel they are not up to the job of running the business.

    Given that we vote for our political leaders at elections, that same mechanism doesn’t exist here, and it is certainly showing at the moment as a good thing for the current government. If there was a board watching their performance and actively representing the best interests of the shareholders (us, the Australian people), then I’m not sure that the government would still be there. Well, I suppose technically this is a function of the GG’s role, but it is rarely exercised, perhaps with good reason.

  2. simon

    You ought to get an updated perspective on the sky-high singaporean’s politicians situation again. The public has been angered by the move for over 10years, and finally they have given the stick to the ruling party (PAP) because they have had enough. The outcry in the recent election has demanded that their salaries are revised downward, and a committee is being set up to correct it by year’s end (2011). And the results will be announced shortly.

    We believe public leaders is NOT the same as private CEOs.

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