The Malta Independent 15 November 2018, Thursday

PAY RISE: proposal for PM’s salary to double in 2018, PM opposes increase, PN reacts (UPDATE 2)

Neil Camilleri Sunday, 4 January 2015, 09:46 Last update: about 5 years ago

-Commission recommends full-time MPs, with three times the current honorarium -PM opposes pay rise

A committee appointed by the government in 2013 has recommended a significant pay rise for members of the Cabinet as well as the President, the Leader of the Opposition and the Speaker of the House of Representatives. The committee has also proposed the introduction of full-time MPs, whose pay packets would essentially be tripled.

According to the as yet unpublished document seen by The Malta Independent on Sunday, the Prime Minister's salary would increase by almost 90 per cent to over €94,000 a year. The President's salary would be rounded up to €95,000, and Ministers, the Speaker and the Leader of the Opposition would earn over €70,000. Reacting to the story, the PM today said that he opposes the increase (scroll to end of article).

In the case of MPs, pay would almost triple from the current €20,000 a year honorarium to a full-time annual salary of €59,000, which would be halved if the proposal is not accepted and they remain part-time parliamentarians. However, this would not affect the increase in salaries of the Prime Minister, Ministers and Parliamentary Secretaries, the Speaker and Opposition Leader.

Report kept under wraps for a year

The commission, consisting of Ombudsman Joseph Said Pullicino, Auditor-General Anthony C. Mifsud and Chief Electoral Commissioner Saviour Gauci, was appointed by Prime Minister Joseph Muscat in April 2013. The report was handed in back in December 2013 but has been kept under wraps for over a year.

The commission was charged with designing a new remuneration mechanism for the President, Prime Minister, Ministers, Parliamentary Secretaries, Leader of the Opposition, Speaker and Deputy Speaker, Whips, Parliamentary Committee chairmen and Members of Parliament.

One of the aims was to ensure that Members of Parliament who are also Cabinet members are adequately paid for their duties, thus increasing public confidence and ensuring transparency.

The document seen by this paper says this is intended to eliminate the possibility of the public reaction of 2008 following the MPs' pay rise (honorarium) furore. It says the present government committed itself to a new remuneration package, as proposed by the commission, taking effect after the current legislature, as long as agreement to its implementation is reached.

The committee took several assumptions into account, including the fact that MPs are legally obliged to attend parliamentary sittings but their salary is possibly not considered to be adequate. In such circumstances, the committee considered what increase in remuneration should be given to MPs to be considered adequate for their full functions and duties as Ministers and Parliamentary Secretary. The three principles adopted by the Commission were: pegging with Scale 1 of the civil service pay grades, serving as a sense of duty and the ethos of the political service.

 

Professional salaries for professional politicians

The committee said that, while a good salary should not be the motivation behind anyone's wish to enter politics, those who go down this path usually sacrifice a great deal. Malta cannot afford to have underpaid politicians, in view of the fact that many of them actually sacrifice their personal lives to enter politics. A good salary will also discourage corruption.

The committee held a number of meetings with MPs from both sides of the house as well as Alternattiva Demokratika. Its recommendations included a deduction from payments in the event of unauthorised absence from the house, MPs' pensions and restricting 'outside interests'.

MPs need to be paid a professional salary for doing a professional job and comparisons were made between an MP's pay and the average national earnings, including in the private sector.

 

President's salary up by 70%, PM's by 90%

It proposed that the President's salary, which stood at €56,310 in 2013, be increased by 69 per cent to €95,000 and the Prime Minister's pay - €50,276 in 2013 - should be increased by 90 per cent to €94,975. A Minister's pay should be raised by 65.3 per cent from €44,234 to €73,131 and that of a Parliamentary Secretary should also be increased by 65.3 per cent, from €42,232 to €69,806.

The Speaker's salary, currently €42,232, would be raised to €73,132 and that of the Leader of the Opposition, currently €42,232, should be raised to €71,469.

The Committee also proposed that the Deputy Speaker's remuneration should be increased from €25,137 to €69,806, Whips' from €30,165 to €69,806 and the salary of chairpersons of Parliamentary Committees from €26,143 to €68,144. The committee said consideration should also be given to whether or not the increases should be introduced in stages.

 

Full-time MPs

Perhaps the most radical proposal is for Members of Parliament to work full-time with a proposed salary of €59,834. MPs currently receive an honorarium of €20,110 that is not afforded to members of the Cabinet. Should the recommendation for full-time MPs not be accepted, the Committee recommended that the above-mentioned salaries for the posts of MP and Committee chairperson should be halved and those of the Deputy Speaker and Whips be reduced by 25 per cent.

 

The honorarium issue

Without a doubt, one of the factors that led to the PN's massive election defeat in 2013 was the honorarium issue. The Gonzi cabinet was heavily criticised for "giving itself a €500 weekly pay increase". Two decisions were taken during the 2008-2013 legislature. First, it was decided to top up the parliamentary honorarium for all MPs from €19,000 to €26,278 and then the second decision was to allow Cabinet members to retain their (increased) honorarium over and above their ministerial salary. It was argued at the time that it was not fair for Cabinet members who were also serving MPs to be denied their right to an honorarium, even in view of the fact that several MPs who worked in the private sector earned much more than the PM.

However, the PN government messed up for a number of reasons. Firstly, the increase for cabinet members was introduced before that of other MPs. Secondly, the money came out of the respective ministries' budgets, rather than from the House's budgetary estimates. Thirdly, the decision was kept hidden from the public. In the end, the increase in the honorarium was frozen (for all MPs). The Gonzi Cabinet then refunded the difference between the original honorarium and the increased sum - amounting to some €7,000 for three years for a total of €21,000. In 2012, Cabinet members stopped receiving the honorarium altogether and, to this day, Cabinet members do not receive an honorarium while other MPs receive €20,110.

 

The difference between the two proposals

The Gonzi administration did not really opt for a pay rise but rather to extend the Parliamentary honorarium, which should be given to all members of parliament, including Cabinet members. Cabinet members, including the Prime minister, also attend parliament and several ministers are members of its relative committees.

So, essentially, the PN cabinet had given itself the right afforded to all other MPs.

In the case of the 2013 proposals, however, there is a clear difference. MPs are to have an honorarium of nearly €30,000 if they are part-time parliamentarians or a €60k salary if they are full-time MPs.

In the case of Cabinet members and the other posts, the rise is not directly linked to their parliamentary duties because the amount will not be halved if Malta does not have part-time MPs. It is, in essence, a pay rise rather than an increase in the honorarium. This can be considered to be discriminatory because, while MPs will get a €10,000 increase (from €20,000 to €30,000) if they remain part-time parliamentarians, the Cabinet, Speaker and Opposition Leader will still get a hefty increase, irrespective of whether parliament becomes full-time or not.

 

What the proposal will cost

The new proposal would mean an additional yearly expenditure of almost €2.6 million. The cost of salaries for the PM and his 22 ministers and parliamentary secretaries alone would increase from €1 million to more than €1.6 million. While the increase in the Prime Minister's salary would amount to €38,690, that of 14 ministers would increase by €404,432 and the increase in salaries for eight Parliamentary Secretaries would increase by €220,592.

In the bigger picture, the highest increase would go towards MPs' salaries. There are currently 31 MPs who are neither members of Cabinet, Whips, Deputy Speakers or committee chairpersons. At €20,110 each, the current sum paid to them in salaries is €623,410. That figure would skyrocket to €1.8 million if they are each paid a full-time salary of €59,835.

Salaries for committee chairpersons would increase from €287,573 to €749,584.

The new proposal is even more expensive than the much criticized PN honorarium increase for cabinet. In 2008, with the newly introduced (and increased) honorarium, Lawrence Gonzi was paid around €76,000 a year. If the commission's proposal is adopted, the Prime Minister would earn just short of €95,000 - an extra €18,000.

With the current proposal, MPs would be paid €59,834 - much more than the €26,278 they were going to be paid under the PN. Then again, the PN proposal was for the honorarium to be increased for part-time MPs. The new proposal may be more justified in that the proposed €60k salary is for full-time MPs. If this is not the case, MPs will get around €30,000 a year, which is still higher than the 2008 honorarium increase.

PM opposes pay rise

In reaction, the Office of the Prime Minister said that the report was commissioned on the basis of a “clear point” in the Labour Party’s manifesto to be considered for the next legislature.

This report was given to political parties in order for them to examine it, the OPM said.

“As has already been said a number of times, the Prime Minister does not agree with pay raises for politicians. The Prime Minister’s position will remain consistent even after 2018.

There are points made in the report regarding the role of members of parliament that merit discussion, the OPM said. 

PM should stop taking people for a ride – PN

In reaction to the Prime Minister's declaration that he is against a pay rise, the Nationalist Party said Prime Minister Joseph Muscat should stop taking people for a ride.

“It was he who wanted an increase in pay for politicians because it was he who commissioned this report. If what the PM said today is true, he has taken the Ombudsman, the Auditor-General and Chief Electoral for a ride when commissioning the report.”

“How can the people believe Dr Muscat when he says that he is against an increase in pay for politicians? It is he who passed a law which enables his own backbenchers to have an increase in their pay through various roles that they now occupy.

“Dr Muscat says he is against a pay rise for politicians and he himself gave a rise to [Labour Mps] Deo Debattista, Anthony Agius Decelis, Silvio Schembri, Carmelo Abela, Charles Buhagiar, Joe Debono Grech, amongst others.

“Once again, Muscat excels in hypocrisy,” a spokesperson for the PN said. 

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