Former Labor minister Barry Cohen is one of four former MPs in a High Court bid for better taxpayer-funded retirement benefits. Photo: Supplied Former speaker Bronwyn Bishop’s pension is approximately $255,000 a year. Photo: Rick Stevens
Retired federal politicians will get bigger pensions and more free travel paid by the taxpayer if the High Court rules in their favour this week.
The judgement will be handed down as the Turnbull government continues to drag its feet on reforms to the entitlement system for current MPs.
The court will give its ruling on Wednesday after it heard a challenge by four former MPs – Labor’s Barry Cunningham, Tony Lamb and Barry Cohen, and Liberal John Moore – seeking a big boost to their entitlements.
But if they’re successful, the ruling won’t just benefit the four of them. It could benefit up to 350 former MPs – including recently retired politicians like Bronwyn Bishop and Philip Ruddock – and 100 spouses.
That would add millions of dollars to the $40 million pension bill taxpayers already pick up each year.
Most MPs who entered Parliament before 2004 are entitled to generous pensions under a defined benefits scheme, which pays them around $120,000 a year – regardless of how much they contributed to their fund.
Those who occupied senior positions like the Speaker’s chair get even more: Mrs Bishop gets an estimated $255,000 a year.
Mrs Bishop lost her job as Speaker after amid public fury over her profligate use of entitlements, including her decision to charter a $5000 helicopter to attend a party fundraiser in Victoria.
The scandal ultimately led to an independent review of the entitlements system, which delivered its report in March. The government said at the time it accepted all 36 of the review’s recommendations but more than six months later it has not actually implemented a single one.
Special Minister of State Scott Ryan says the government continues to support the changes and he is working with the Department of Finance and Remuneration Tribunal to implement them.
“The government remains committed to creating a framework which is transparent, clear and has the confidence of the public,” he told Fairfax Media.
A positive ruling from the court could also give former MPs unlimited free business-class travel on the Life Gold Pass. Changes have limited them to 10 return flights a year but the plaintiffs want that overturned.
They are using section 51 of the constitution – made famous in the Aussie comedy classic The Castle – to challenge legislative changes that have slowed the growth of their retirement allowances.
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.
But in its submission to the court, the government argued the payments do not meet the definition of property and Parliament has the 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 told the court.It also pointed out “each plaintiff has already received vastly more by way of retiring allowance than they contributed during their service in the Parliament”.
It singled out Mr Lamb, revealing he paid just $35,297 into his super account during his nine-year parliamentary career – but has so far been paid $1.3 million in benefits.
While the pension scheme is not available to anyone elected after 2004, more than 187,000 Australians have signed an online petition this year calling for it to be scrapped altogether.
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.