Cost of keeping the bastards honest: new watchdog to cost $80 million a year


How much will it cost to keep the bastards honest?

The Turnbull government will spend $80 million a year on its new parliamentary entitlements authority, with its public servant CEO to be paid a $340,000 salary package.

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The government’s budget papers reveal for the first time what it will cost to set up and run the Independent Parliamentary Expenses Authority – announced in the wake of the travel scandal that ended Sussan Ley’s frontbench career in January – to monitor, administer, advise, audit and report on MPs’ entitlement claims.

The authority will cost taxpayers $313 million over the next four years, starting at $76 million next year and peaking at $82 million in 2019-20.

The annual figures include the roughly $35 million of travel expenses it will pay out to MPs each year, plus more than $30 million in annual “special appropriations” and $10 million in departmental expenses, made up primarily of the wage bill for 66 staff.

However the government says the authority will only cost taxpayers $3 million a year more than what’s already being spent. The rest of the money will come from the Department of Finance, which currently administers the system.

The government has appointed department official Leonie McGregor to be interim chief executive of the body and is now searching for someone to fill the position for a five-year term, to start when the authority fully ramps up on July 1.

The CEO will be paid a base salary of $247,810 and a total package of $339,460, based on a recent decision by the Remuneration Tribunal. The CEO will also be entitled to business class flights and generous travel allowances.

The decision puts the CEO on the same level as the Human Rights Commissioner and the head of the National Mental Health Commission.

The CEO will earn more than most of the people they are charged with monitoring: backbench MPs are paid $199,040, plus loadings and allowances. Cabinet ministers earn about $344,000 a year and junior ministers $313,000.

The authority will also have five part-time board members: a former MP, a former judicial officer, an auditor, a public administration expert and Remuneration Tribunal president John Conde. The government will announce the board in coming days.

While the Remuneration Tribunal has not yet determined what board members will be paid, government board members are paid anywhere between $25,000 and $106,000. Mr Conde himself will not be paid extra for his contribution.

When Malcolm Turnbull introduced the legislation to set up the authority he called it the first step in the biggest reforms to the expenses system in a generation.

“Politicians must be accountable for their use of taxpayers’ dollars,” he said. 

“Australians are entitled to expect that we, their representatives, spend their money carefully, ensuring at all times that our work expenditure represents an ethical, prudent and cost-effective use of public resources. It is taxpayers’ money.”

The IPEA is modelled on a similar body in Britain that has been successful in curbing entitlements spending. The Turnbull government hopes the Australian version will prevent future damaging expenses scandals.

The government also detailed in the budget how much it will save by abolishing the Life Gold Pass, a travel perk that gave former MPs free business-class travel on the taxpayer: $2.6 million over the next five years.

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