SUPERANNUATION

The Daily Telegraph - 27/12/2002  page 25

PNG Ministers retain positions despite corruption report

I couldn't fault Professor Bob WALKER's answer but a number of things are a little disturbing about these two telephone calls from STATE SUPER.  One of these things is that both Professor Bob WALKER and the preceding female caller from STATE SUPER were extremely nervous.  Another thing is that Professor Bob WALKER did not supply his name at the start of his telephone conversation - people usually introduce themselves and the entity they represent at the commencement of the telephone call.  Maybe Bob and his staff were a little nervous because of the very poor performance of the STATE SUPER-administered fund (I had been told that the STATE SUPER fund was in trouble financially and that the NSW Government had pumped $38 million into this fund recently).  Also absent-mindedness could have been the explanation for Bob to introduce himself personally at the commencement of the telephone conversation (he didn't use his title "Professor" though even when I requested his name).

A few more things have come to light since these telephone conversations of a couple of months ago (August 2002) though!  STATE SUPER is the only major fund to perform that poorly to lose as much as 7.5% in the last 12 month period!  Oddly enough the report recorded the loss as a negative profit (i.e. "-7.5% profit") which is a little difficult to understand - "Why not record a loss as a loss?"

About three weeks later STATE SUPER has made the news again!  The $2 billion loss (the -7.5% profit converted) has now increased to $2.25 billion!  Perhaps Treasurer EGAN tied his shoe-laces on his highly polished shoes to tightly the day he did the accounts for the state of NSW and this liability led to the error - all $250 million worth!  Or perhaps some sections of the media has been told that if they can get the NSW Government Employees to believe that this loss was initially understated then $250 million will "disappear" from the government account(s)!

Ask the Transport Minister, The Honorable John ANDERSON, how the (Australian Federal) Auditor-General couldn't locate the $2.9 billion discrepancy between the amount gazetted which should have been collected in fuel excise and the higher amount which was collected but couldn't be located!  I believe almost anything but the, "It's in another account", excuse John supplied on television sounds a bit sus!  Someone close to me commented on this with the following, "They don't pinch millions (of dollars) anymore - (and you'll love the punch-line) TOO MUCH PAPERWORK!"

Or perhaps the Deputy Prime Minister just simply had an attack of "EGANitis" the day he did the accounts for the fuel excise - shoe-laces tied too tightly and he could only count up to ten (this leading to the error)!

One can very easily understand that there could be some other entity(ies) owning these approximately at least 21 million BHP shares with Chase Manhattan Nominees Limited being the disguise for the true ownership of these shares!  I think that the employees of the NSW Government will be even more suspicious if they were informed that BHP shares "recovered" in price about $6 per share in April of 1999 (see following graph) - the same year that the approximately at least 21 million BHP shares had their control supposedly transferred to under another entity (Chase Manhattan)!

The glossy-printed Annual Reports, supplied from STATE SUPER, don't clarify the situation sufficiently because in one of these booklets the BHP shares are recorded as a number held and in one of the following booklets the share-value is recorded with no conversion back to the number of shares.  Why produce such an expensive booklet when the situation is left unclear?  Also there are four separate superannuation funds under STATE SUPER - FIRST STATE, SAS Trustee Corporation, etc. and the recording is by way of a "pooled fund" - all these four entities lumped together!  Since SAS Trustee Corporation is obliged maintain a 6% growth in value each year why couldn't the more profitable share-parcels be transferred to SAS at an undervalued rate and so reduce the NSW Government's liability?

 

SUMMATION

I understand that what is presented is not proof but I think that most people would have become extremely suspicious on even just scanning the preceding information and would wonder why an investigation has not been commenced!

 

CARR's Baby

by Peter MORAN

The Parliamentary Superannuation scheme operating in NSW has been described as the most generous in the western world.  It provides benefits wildly out of step with those available to the rest of the community.  It has been said that we need such a scheme to attract the best people into Parliament.  Why then do we end up with a dishonest liar like Bob Carr as Premier?

The Scheme

The Parliamentary Contributory Superannuation Act 1971 is the ticket our "representatives" use to ride the gravy train.  Since his victory in the 1995 state election Bob Carr and his government have amended the scheme on a number of occasions so that it more accurately reflects the governments wishes.  The scheme as it is can be said to be Bob Carr's baby.

This Act requires MPs to pay a superannuation contribution of 12.5% of salary. In return we, the taxpayers, are required to provide them with a lifetime "pension" after just eight years in parliament.  The pension is a minimum of 48% of parliamentary salary and can be as high as 80% of salary, depending on length of "service".  The NSW Government Actuary has said that the cost of funding this scheme would be the equivalent of 58.6% of salary.  Bob Carr ( who wants to sell schools to fund education) believes this is an appropriate use of taxpayer funds.

The Act provides for "pensions" to be paid even in circumstances where the former MP involved is still a member of the workforce.  Thus Bob Carr considers it appropriate that someone such as Nick Greiner should collect a pension in excess of $110,000 p.a. even though he is thought to be earning up to $1,000,000 p.a. by sitting on the boards of various multi-national companies.  Another example of this is found in the case of John Fahey.  This former NSW and federal MP( who also sits on the Board of Macquarie Bank) was appointed to the Board of Integral Energy by Bob.  The salary of $50,000 is just a top-up for his $130,000 pension.  In 1995 we were told by Bob that John Fahey couldn't run a chook raffle, now he would drown Mr Fahey in rivers of our gold.  No doubt Bob has his eyes on the future, when he too will want to leave his snout in the trough after he leaves parliament.

Until Bob came to power, recipients of the states generosity via this scheme were allowed to commute part of their entitlements to a lump sum by foregoing part of their pension.  A former MP aged 55 was entitled to commute half of his/her pension to a lump sum equal to 10 times the pension commuted.  If a 55 yr old was entitled to a pension of $100,000, they could convert half of it to a lump sum of $500,000 ($50,000 x 10) and collect a pension of $50,000 per annum.  The part of the pension that could be commuted to a lump sum increased by 1% for every year of age over 55.  Someone aged 60 could convert 55% to a lump sum. Former MPs aged 65 could convert 60%. There was an upper limit of 80% of salary that could be commuted. 
This wasn't enough for Bob, though.  He and his toadies in the parliament decided that all of the pensions paid under this scheme should be able to be converted to a lump sum, irrespective of age or need.  Under Bob's changes to the scheme, our 55 yr old former pollie on a pension of $100,000 can now commute all of the pension to a lump sum of $1,000,000.  Even better though, this former pollie would still be entitled to a pension after converting all of their pension to a lump sum.  In the case above, the former MP who converted all their pension to a lump sum would still be paid an increased pension every time Parliamentary salaries increase.  When Parliamentary salaries rise by 5% (as they historically do each year) our former MP would be be paid a pension increase based on the amount they would have been receiving had they not taken a lump sum.  In our example, which presumes salary growth of 5% p.a., the former MP who converted all his pension ($100,000) to a lump sum ($1,000,000) would collect a pension of $5,000 the following year ( 5% x $100,000), $10,250 in yr 2 ( $5,000 + 5% x $105,000 ), $15,762 in yr 3, ($10,250 + 5% x $110,250), $21,550 in yr 4 ($15,762 + 5% x $115,762) and so on.  Within a few short years they will be back to the position of collecting a full, generous and rapidly increasing pension even though they have supposedly commuted all of it to a lump sum.  Talk about having your cake and eating it too!

Of course this is only one of the changes this government has made to the scheme.  Bob thinks politicians are so special that they deserve all the taxpayers funds he can divert to them.  That is why the ALP legislated to ensure that some pollies aren't required to contribute to super, and some can in fact begin to collect their "pensions" even before they leave parliament.  Where ordinary people are required to contribute to super up to the age of 75, and cannot collect a pension while still working, Bob has decreed that NSW pollies should not have to contribute to super after reaching the age of 65 and those over 70 should in fact have to take their super even though still in the workforce.  What a working class hero!  He must be very proud of himself for creating a situation where serving MPs can convert their pensions to a million dollar plus lump sum while still in Parliament.
The generosity of this scheme extends beyond MPs to their spouses.  The surviving spouse of any deceased former politician is guaranteed a pension for life of at least 40% of a backbenchers base salary, and usually more according to the service history of the MP concerned.  The average pension paid under this provision seems to be about $50,000 per annum.  These pensions are paid irrespective of age, re-marriage, employment or length of time married to the MP.  If a former MP is married to a 20 year old bimbo when he dies, she's on the payroll for life.
It's interesting to compare this treatment to that given to to firemen and their families.  Many of the states firemen are not covered by a full death and disability cover while serving the community.  Indeed, in recent years, some widows of firemen killed on the job have been given whole-of-life payments that are less than the average annual pensions paid to widows of former MPs.
The Carr Labor government says it can't find the money to ensure the families of those who risk their lives for us are adequately cared for.  That says it all about this mob, doesn't it!

Honest Bob or Bullshit Bob?
"Honest Bob" Carr has been quite clear in his public statements relating to this scheme. In March ' 99 - just before the state election - he was quoted in both the Daily Telegraph and the Sydney Morning Herald as saying he wanted parliamentary super to "reflect that of every other person living in NSW."  How noble of him.  He then went on to claim that "an overhaul of the superannuation system, based on an independent review would take effect when the new parliament was elected."  Daily Telegraph - 22/3/99.  The review was being conducted by the Parliamentary Remuneration Tribunal ( PRT ). That claim of Bob's was a lie and he knew it to be a lie.  It can be shown to be a lie if we look at a letter from Mr Col Gellately, a senior public servant, to my local Member, Mrs M. Saliba.  The letter states "In relation to Parliamentary superannuation, the Parliamentary Remuneration Tribunal has no power to undertake review or make recommendations."

We can see "Honest Bob" knew it to be a lie if we look at the Parliamentary Remuneration Amendment Act 1998. This Act stripped the PRT of the power to do anything in relation to parliamentary super except approve proposed amendments.  "Bullshit Bob" set out to deliberately mislead the electorate in order to protect his own financial interests.  In many sectors of the corporate world he would be rewarded with "porridge" not a pension!  It's no wonder so many of the corporate figures Mr Carr is so keen to support and seek support from (e.g. Rodney Adler, Karl Suleyman) end up sitting in the seats with the worst view of the courtroom.

What Bob really wants
Premier Carr has already shown what he really wants to happen with parliamentary super.  In 1997 his government passed what became known as "the Jones Amendment". This made super between 30% and 60% more generous for backbenchers with slightly less generous increases for office holders ( Ministers, Parliamentary Secretaries, etc.).  We know that's what he really wants because that's how he acted when he thought no-one was looking!  It was passed in record time (only 1 minute in the Lower House) in the very early hours of the morning just before the Christmas break.  Bob and his cronies on both sides of Parliament acted like thieves in the night until they were exposed, then they meekly reversed it, not forgetting to massage it in their favour as they went.

A better way?
As long as our politicians have access to their own, special super scheme they will use it as an instrument for increasing the total value of their remuneration packages.  By making the super scheme more generous and more valuable they give themselves a de-facto pay rise.  The Parliamentary Remuneration Tribunal was established because it was recognised by all ( including pollies ) that it was inappropriate that MPs should control their own pay.  Why then are they still running this rort?
Both major parties support this scheme, even if for different reasons.  The coalition, with that born-to-rule attitude, believe they deserve anything they can get.  The ALP uses it to keep the cattle in line.  Anyone who would dare to think or speak independently can be threatened with loss of preselection and so loss of increased benefits.
In a time when politicians are seen as being increasingly isolated from the electorate, when the publics level of respect for our representatives is plummeting, as the public increasingly comes to view politicians as greedy and self-serving surely one day they will look for a more equitable, more transparent and more appropriate method of remuneration.  One suggestion is that they could be paid a salary commensurate with their position in the community and have a standard super package of 9% paid into a normal, non-parliamentary super account under the same terms and conditions accepted by everyone else.  It could be argued that an appropriate salary might be 3 x Full-time adult ordinary time earnings.  At current levels (about $870 per week) this would translate to a salary of approx. $135,000 with a super contribution of a further $12,000.  This total package of $147,000 compares with the current situation where MPs are effectively paid nearly $160,000 with a super benefit of 58.6% on top of a $100,000 salary.
    - the change would result in savings for the NSW taxpayers. 
    - the change would give politicians a higher disposable income.
    - the change would remove the possibility of pollies scamming us with their super. After all, the NSW Parliament can't amend federal super laws!
    - the change would make politicians take more responsibility for the effects their rule has on we ordinary folk.  At present, MPs are the only section of the community who are immune from the effects of any economic downturn or mismanagement. They always tie increases in salary and pensions to whatever economic indicator is rising fastest, be it the C.P.I., Average Weekly Earnings or political donations.
    - the change may go some way towards building a symbolic bridge between us and our representatives. The present scheme breeds cynicism among the general public and alienates voters. Why wouldn't it? They seem to consider themselves better than us, special.

Looking for change
I have recently been in contact with a number of NSW politicians regarding this scheme and how it might be amended in line with the Premiers statements just before last election.  Needless to say, I have had very little satisfaction. Indeed, David Campbell (Member for Keira) tried to have me prosecuted by ICAC.  There was a time when the ALP would defend ordinary people against the excesses of the favoured few.  Now, their MPs are among the favoured few and would seek to prosecute those who question their greed.
For more details of the lies, deceptions and rorts of Bob Carr and some of his cronies, keep watching this space.  There's plenty more to come.

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