A group of retired politicians trying to claw bigger pensions and more free travel from the taxpayer will get their day in court next month.
The High Court has agreed to hear the challenge by four former federal MP’s – Labor’s Barry Cunningham, Tony Lamb and Barry Cohen, and Liberal John Moore – seeking a big boost to their entitlements.
While the federal government has sought to have the case thrown out, the court’s full bench will hear the case on June 16, returning politician’s,” perks to the spotlight just two weeks before the election.
If the case is successful it cou1d between $80,000 and $ll8,000 a benefit up-to 350 former po1iticians year, not including bonuses, and up and 1OO spouses, adding millions to the pension bill to the $40 million taxpayers already pick up every year.
Most MPs who entered before 2004 are “entitled” to generous pensions under a defined benefits scheme. The four plaintiffs already receive annual pensions worth between $80,000 and $118,000 a year, not including bonuses, and up-to 10 free business class return flights a year, but they believe they are entitled to more.
The four plaintiffs already changes that have slowed the receive annual pensions worth growth of their retirement allowances, which they say should be based on a percentage of the full salary of current backbench MP’s, which is about $199,000.
Under the Gillard government changes, their allowances were instead based on a percentage of 2011 salaries- about $154,000. They claim the changes were an unlawful acquisition of their property by the Commonwealth – the same argument the Kerrigan family used to fend off developers who wanted to take their home in The Castle. Under section 51, the Commonwealth can only acquire property on “just terms”.
But in its submission to the court, the government argues the plaintiff’s claims “fail at several levels”. It says the payments do not meet the definition or property and Parliament has he right to make changes. Such decisions are made with “regard to a wide range of factors including the Commonwealth’s fiscal and economic circumstances and community concerns”, the government said.
It also points out that “each plaintiff has already received vastly more by way of retiring allowance than they contributed during their service in the Parliament”. It singles out Mr Lamb, revealing be paid just $35,297 into his super account during his nine-year parliamentary career – but has so far been paid $1.3 million in retirement benefits.
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As at June 2014, there were 332 politicians drawing on the pension scheme.
Each year retired politicians and their spouses rack up approximately one million dollars of business class flights. Additionally former Prime Ministers continue to dig deep into the public purse with former PM John Howard leading the pack with his “entitlement spending” of $2.4 million dollars plus, pension and other perks not included.
There has never been a better time to be a politician!
Mr Cohen and Mr Moore are also mounting a further challenge to resurrect the original version of the Life Gold Pass, which entitled them to take an unlimited number of domestic flights at public expense.
Changes in 2012 limited the controversial scheme to 10 return flights a year but they want the changes rolled back so they can once again travel with no restrictions. Mr Cohen was a minister in the Hawke government and Mr Moore was a minister in the Fraser and Howard governments.
Mr Cunningham and Mr Lamb were both Labor backbenchers.
At least an extra 20 retiring politicians will be entitled to it after they leave Parliament at the July 2 election, including former Speaker Bronwyn Bishop. She is expected to get up to $255,000 a year for the rest of her life under the scheme.
