pay peanuts get monkeys

We should pay our politicians significantly more money.

There I said it. And the sky didn't collapse.

It isn't the popular view, and every time it is raised in some way shape or form there is a raft of discourse from people like 'angry of surrey hills', or 'pay them less from wollongong' or 'how dare you from mackay'. And given the group we have currently in office are hardly setting the world on fire, it is an understandable reaction.

However the fact they are so ordinary illustrates my point. If we pay peanuts, we get monkeys. And we've got a few monkeys.

So let's look at what they are paid. The parliamentary base salary is $140,910. This is the reference point from which ministers salaries are determined, the additional percentage of the base salary and the final salary for each role is as follows:

There are various other categories with varying additional percentages from 25% to 87.5% in addition to the base salary. Further to this there are allowances and perks: a funded car, business class airfares, travel allowances, not to mention the lifetime gold pass for travel on retirement. It's a lot of money and for most of us looks like a pretty good wicket. And there is no doubt that compared to the 'average' person they are well compensated. However do we really want 'average' people in the position of driving the country? Or do we want 'extraordinary' people?

When the ceiling of your earnings is in the mid 300′s (notwithstanding the perks) the appeal of going into public office for this calibre of person is reduced, considering their earning potential in the private sector. Particularly when you consider the impact on their personal life: politicians are away from their family for significant periods of time, missing birthdays, anniversaries and pet funerals in the backyard.

Take a look at the annual report of any reasonably sized publicly listed company: CEO's routinely earn high 6-figures, and million dollar salaries are not uncommon. For the purpose of this discussion I'll ignore the astronomical salaries of the bosses of the banks, grocery chains, miners and some others, as they are in the minority. However even ignoring those, it doesn't take long to identify numerous CEO's, or even CFO's, earning the big bucks.

If you are an extraordinarily talented businessman/woman with the necessary skills to succeed in either business or politics, and you had the capacity to earn over a million dollars in the private sector, or a maximum of mid 300′s in politics with the personal impositions that come with it, what would you do?

Unless you're independently wealthy like Malcolm Turnbull or Kevin Rudd, or believe that political life is your calling, it is likely you would choose the money trail. And who could argue. So consider the following scenario:

Currently we have 150 members in the House of Representatives, and 76 in the Senate. It is very important that we retain two separate houses as a 'check and balance', however do we really need this many politicians? If we cut the number of federal politicians in half – the lower house would have 75, and the Senate 38: the saving on current base salaries would be around 16 million dollars annually. For the remainder, we move to the following:

It is difficult to put precise figures on the cost, however my 'back of a napkin' calculations bring it in at an additional cost (from the original salary position, prior to the savings being accounted for) of around 14 to 18 million dollars annually. However even if it costs more than our current salary bill for politicians, I would argue that it's value for money. Quite outside of the raft of savings on perks (the lifetime gold pass particularly!) these salaries provide a far more competitive reason for the extraordinary people we seek to run the country to move from the private sector to politics.

The back benchers, the entry level if you like, receive a modest increase. Whilst this entry level salary should be fair and reasonable, and I think it is, we want the extraordinary people to aspire higher, and to be rewarded competitively for doing so.

Yes these salaries are significant. Yes they are many times more than the average salary. Yes they are a large increase from the current level. But if the CEO's running many private sector businesses in this country can command salaries in the high 6-figures, or over a million dollars, we should be prepared to pay the person in charge of our country somewhere in the $900,000 range if we expect to attract extraordinary people.

And does anybody seriously think we need 226 federal politicians, in addition to state government and local government (that's a whole other discussion!). Will the job of running the country be adversely affected by halving the numbers in the upper and lower houses? Mmmm I don't think so either.

Let's pay more and attract better, extraordinary people to a career in politics. But let's have less of them. We have too many, and too many of the ones we have are duds.

Sadly though, it will never happen, it would be political suicide of any politician to dare raise it.

But I bet they agree with the principle. Except the duds. They know they'd have pre-selection rescinded in a heartbeat.