Kicking Old Politicians Off Their Rich-Ass Pensions Could Save $350 Million

Costings out of the Parliamentary Budget Office show Aussie taxpayers would save $350 million if an old, six-figure pension given out to retired politicians was axed and replaced with the current policy.

The figure comes after The Greens requested the PBO cost its policy of cutting off access to the pre-2004 pension scheme. While the rules have since changed, politicians who retired before 2004 still get to swim Scrooge McDuck-style to the lucrative pension if they choose.

A bunch of current politicians who were elected before 2004 are still eligible for the scheme as well, including Tony Abbott, Anthony Albanese, Julie Bishop, and Peter Dutton. 

The Greens proposal means that the $350 million amount would be made back over an 11 year period.

Under the policy, retired politicians would still be paid the general public service contribution of 15.4% of their salary over that period, which is part of the pension scheme that replaced this big money one.

It works like this: over 450 former politicians and their spouses are on the old pension scheme, which meant they had the option to either take a lifetime pension or a lump sum. Depending on how long they served for, they all qualify (at the very least) for 50% of their parliamentary allowance if theyve had their job for eight years.

That might seem like a long time, but consider how many elections that would be: not many. From there, 2.5% is added to that 50% figure for every additional year served. It caps out at 75%.

If that pension plan sounds insanely good, it kind of us – and that’s why the decision was made to no longer make it available to politicians elected after ’04. Of course, while the tap was turned off for newcomers, it’s still running for those who were already qualified.

The Greens proposal would be expected to increase the fiscal and underlying cash balances by $90 million over the 2019-20 fwd estimates period alone, cutting expenses by $146 million but also decreasing taxation revenue by $56 million.

The PBO did note, however, that it hadn’t assessed the feasibility of the policy or wether there would be related to the Australian Constitution if it was enforced.

Greens Senator for Queensland Larissa Waters said in a statement that the $350 million in savings could pay for a federal corruption body, domestic violence survivor grants, or an increase to Newstart.

“Politicians raking in $350 million over the next 11 years in bloated pensions after they retire from the job is why ordinary people think politicians are out of touch and motivated by self-interest,” she said.

More Stuff From PEDESTRIAN.TV