Entitlements Review: This Is A Problem Of Definitions

To be a parliamentarian is to have a strange job. To be speaker of the house in federal Parliament is to have an even stranger one.

Recall that Bronwyn Bishop’s first line of defence was to say that she flew to the Liberal fundraiser in Geelong to talk about the role of Parliament. Is that really what she is employed to do? Does that count as party business or political business or parliamentary business? Should we be paying for it?

It’s easy to say we want to reform the entitlements system. But it’s much harder to decide what constitutes “official” business that taxpayers should support, and “political” business that taxpayers should not. There’s not always a bright line separating the two.

Yes, a helicopter to Geelong, or charging taxpayers for attending a wedding, clearly crosses the unacceptable line. But what about arranging meetings in Melbourne to justify attending a party function the night before, as Tony Abbott did in August last year? I challenge you to write a rule that prevents tricksy scheduling.

Unsurprisingly, a 2010 review into parliamentary entitlements concluded that there were “unclear and sometimes inconsistent definitions” of what constitutes parliamentary, party, electorate business.

So let’s start with first principles. In the business world, employees’ expenses are covered on work trips. The job of employers, or their human resources staff, is to monitor employees to ensure that the firm and its shareholders aren’t being ripped off through extravagance. Our parliamentary entitlement regime tries to ape this private sector practice.

But parliamentarians aren’t employees. They have no boss. Yes, when they’re ministers or parliamentary secretaries they report to the prime minister. But as representatives, they answer only to voters, and they only answer every few years.

In fact, parliamentarians are much more like sole traders, who, through an election, win contracts to represent us – to act as our agent in the legislature.

This is a distinctly unromantic vision of the work of a politician. But if we’re trying to figure out what politicians are “entitled” to we should first figure out what their job is.

This subtly amusing parliamentary fact sheet tries to derive the “job description” of a parliamentarian by observing how parliamentarians exercise their time. They do parliamentary work (voting, committee hearings), constituent work (pressing flesh, going to fetes) and political work (party conferences, branch meetings, scheming).

But just because politicians do a lot of things doesn’t mean we should pay for those things. We elect them to represent us in federal parliament, not to visit fetes. They might enjoy being local celebrities but why should we pay for them to campaign?

A few years ago my IPA colleague Sinclair Davidson spelled out in The Australian an alternative model for dealing with expenses. Politicians should be well paid – probably a lot better than they are now. But once they’ve received that lump sum, they should pay their expenses themselves, just like any independent contractor would.

Those expenses – not “entitlements”, expenses – would then be treated as work-related deductions. Under that model, if Bronwyn Bishop wanted a helicopter ride she would have declared it not to parliament but to the Australian Taxation Office in her 2014-15 return.

(Ministers’ expenses – who actually are employees of the government – would be strictly controlled but covered in the same way employees have their expenses covered.)

This model has many advantages over the present system.

First, it would keep expenses in check. It’s easy to be loose with taxpayers’ money. It’s harder to be loose with your own.

Second, it avoids the interminable debate about what counts as parliamentary or political expenses. Either way, it all constitutes work-related expenses for tax purposes.

Third, it leaves subjective questions of whether spending is extravagant to the politicians themselves. Bishop wants a helicopter? Up to her.

Fourth, it leaves the question of what constitutes work-related to the tax office. I said politics is a weird job but it is not so weird that the ATO wouldn’t be able to handle these questions. They have a lot of experience here. Anyway, we’re at the mercy of the tax office. Our representatives should be too.

And fifth, it would be a hell of a lot less complicated than what we have now. The Finance Department says there are 300 separate entitlement codes in the existing entitlement management system, belying the complexity and confusion that surrounds political compensation.

There’s a deeper problem revealed by the Bishop affair.

Tony Abbott has been eager to blame the vagueness of the rules about entitlement use for the scandal. But all that means is the current system rests largely on individual judgment.

And if our parliamentarians are unable to exercise their individual judgment in a way that accords with the expectations of voters, then we have a serious problem.

Politicians are expected to make some of the biggest decisions affecting our lives. We place them in positions of great trust to act on our behalf.

What does it say about representative democracy if our politicians don’t even have enough judgment to prudently and responsibly arrange their own travel? Nothing good.