Friday, 17 October 2014

Balancing Fair Parliamentary Salaries and the Need for Quality Leadership

Opinion by Crosbie Walsh

I'm still scratching my head over the announced parliamentary salaries, wondering why they were decreed before Parliament sat, how they were determined, and how they can be explained or justified. Price Waterhouse may have made the recommendations but an elected Government is under no obligation to accept them unamended. 

The Parliamentary Remuneration Decree fixes salaries until they are changed by a parliamentary resolution that must take into account prevailing economic conditions based on evidence from an authoritative source and may set a lower remuneration level. But couldn't the old rates have been paid until, as NFP party leader Dr Biman Prasad, asked, a parliamentary select committee decided on appropriate new rates?

Prior to the election, Government said it intended to attract high quality candidates by paying attractive MP salaries. More generally, it talked of the need to reduce income inequalities and leading by example. The parliamentary salary situation does not seem to reflect these sentiments.

Relative to the higher salaries in parliament and comparable to "equivalent" salaries outside parliament, the salary of ordinary MPs is insufficient to attract high quality candidates, unless they are motivated by idealism alone. And relative to the wages on which most Fijians live, the higher salaries are an obscenity.
The Parliamentary salaries compared
The PM's salary package ($328,750) is 20 times the country's average wage of $17,394 in 2011 when the median wage, a more accurate measure, was $12,200. For a wider comparison, his NZ counterpart's basic salary ($NZ428,500) is "only" ten times the NZ average wage of $NZ45,000.
The PM's package is six times the basic salary of an ordinary MP ($50,000). The NZ equivalent where MPs earn $NZ147,800 is half that.
There are three levels of ministerial salaries in Fiji: The Minister of Finance earns $235,000, Ministers of Health, Education and Infrastructure and Transport, $200,000, and other ministers $185,000. The Speaker earns $150,000 and the Leader of the Opposition $120,000. In NZ, all Ministers, the Speaker and the Leader of the Opposition are paid the same salary, $268,500.

I know the comparisons with NZ are only crude. No allowance is made for different values of the respective dollars or the allowances paid and non-monetary assistance to members of parliament, but my main concern is in Fiji relativities, between the top and bottom salaries in the Fiji Parliament, and the higher parliamentary salaries compared with the incomes of ordinary Fijians, the people who elected them to office.

Balancing Fairness and Quality
It is not easy to balance principles of equality and fairness with the need to attract the best people to govern the country, but I think the range of parliamentary salaries need to be greatly compressed, with  lower salaries at the top (before the appropriate allowances are added) and higher salaries at the bottom.
There are, I think, three requirements if the balance between perceived fairness and quality leadership is to be achieved:
1. The top (and bottom) end of the salaries need to be in line with approximately comparable positions outside Parliament.
2. Salary differences within the House should reflect the roles and responsibilities of members on BOTH sides of the House.
3. The basic MP salary should be sufficient to attract quality election candidates.

Why only comparisons with the private sector?
A justification for the top salaries is that they compare with those paid to CEO's in the private sector. Why this should be the only comparison I do not know. Few MPs came from or will return to the private sector, and there are other and possibly more appropriate models such as those paid by the University of the South Pacific.
The basic USP salary (without allowances) paid to assistant lecturers ranges between $54- $65,000; lecturers from $66- to $88,000, senior lecturers $91- to $105,000, associate professors from $111- to $125,000, and professors from $129- to $140,000.

Using this model, an ordinary MP would earn a basic salary comparable to a Lecturer (say, $65,000); Ministers, the Speaker and the Leader of the Opposition basic salaries equivalent to those of an Associate Professor or Professor (say $120,000) and the PM a basic salary of $140,000. Allowances for travel, living costs for those normally living outside Suva and superannuation would be added to these basic salaries, and extra payments could be paid for ministers with more than one portfolio.

Two extreme overseas examples
There are, of course, many other models that could be adopted. Using Fiji's choice of a comparison with private sector CEO's, for example, ANZ's CEO David Hisco earned a A$3.26m remuneration package last year, equal to NZ$4.1m at the time, making him the country's highest-paid executive. That's 120 times more than the lowest paid bank worker. Or $80,000 a week, more than most bank workers earn in a year. It is little wonder than ANZ bank tellers in New Zealand are presently on strike!

Evo Morales
At the other extreme is the example of of Evo Morales, Bolivia's first indigenous president. When he took office in 2006 he did not move into the Presidential Palace. He stayed in his old house, wore his same old clothes, and cut his salary by 57%

He then set out to improve the conditions of the poor, curb the power of the elite, and nationalise some US and foreign businesses. He is, for a reason his opponents fail to fathom, immensely popular and has been returned with over 60% of votes three times as president. 

Of course, he's a left wing president, part of the "pink revolution" that has improved the living standards of the poor and thwarted American big business interests in several Latin American countries.

We can hardly expect such idealism in Fiji where there's nothing even vaguely "pink" about Government — or the Opposition parties, for that matter. Such as "pink" was, it went out of the window with the election collapse of the FLP and PDP.
But, surely, after all the hyperbole about basic human rights, poverty alleviation and equal citizenship, we could expect a parliamentary salary structure that showed it was designed in the same country —or at least on the same planet. 

A structure, as the remuneration decree requires, that recognizes the "prevailing economic conditions","fair relativity", that "reflect(s) the ethos of political service which entails making sacrifices", that recognizes "the need to be fair to the taxpayer" and that, in the setting of allowances and benefits, recognizes "the need for public understanding" of the "extra" work done by parliamentarians.

If PM Bainimarama wishes to be re-elected, or elected three times like Evo Morales, I'd bet a fistful of his surplus  dollars that he needs to be much closer to Morales's “moral” example than to that of the ANZ CEO. 


  1. > wondering why they were decreed before Parliament sat


    1.) Now the discussion about salaries is going to use the massive new rates as the base to start from.
    2.) The people involved with that discussion will have lived a few weeks or months under the massive salaries, and will be loath to give them up
    3.) The masses will be happy to hear about the meagre reduction in salaries that will be the outcome of the discussions.

    If you love him, our Minister of Finance is a master strategist; If you hate him, the guy's an evil genius.

  2. Croz
    At times your naivety is laughable. What is the point of staging a coup, corrupting the judiciary, intimidating those who challenge the evil and putting in place a sham democracy if you don't fill your pockets? Watch the space - much more to come.

    1. @Fill .... I take it you disagree with me. Therefore I'm naive .QED

    2. Deserving immunity for treasonSaturday, 18 October 2014 at 20:41:00 GMT+13

      Well said Croz. I'm with you. There is nothing naïve about supporting a treasonous coup and a corrupted judiciary.

    3. This whole issue of parliamentary salaries is a tricky one. My basic view is that members of Parliament should be well paid. And being a member of Parliament should, by statute, be made a full time job; no outside employment.
      Where the issue becomes sticky is when one gets to matching salaries with qualifications. Parliament is made up of those elected by their constituents. You get what you vote for. By and large I do not think that Fiji's current Parliament has a large number of high powered minds with formal or other credentials.

      Some Ministers and Assistant Ministers are plainly intellectually shallow, weak material. There are many problems associated with this. Intellectually weak and inexperienced Ministers and Assistant Ministers become captives of the Heads of their Departments. The Minister or Assistant Minister become the tail and the Head of the Department becomes the dog. In constitutional theory and practice, with Parliament being supreme, Ministers are supposed to be in charge. Ministers, in short, are supposed to be the dog, not its tail. When Ministers are weak--weak in the sense that they do not know what to do, how to run a Department, the bureaucrats run the Minister. In this process, good, creative, governance falters and then fails.
      The chemistry between a Minister and the Head of Department and his staff is a tricky one to be stabilized. Ministers who do not know their business, who rely on being spoon fed by their Departments, their Department Head in particular, end up being failures. Ministerial failure is infectious. Ministerial failure eventually--often quickly--becomes government failure.

      Lest I am misunderstood this point is also relevant: There is very little real talent in the ranks of SODELPA and the NFP. But their job is not to govern of course but to make the government of the day uncomfortable and to eventually unseat it. So one is entitled to ask this pertinent question: Would the Opposition, if it were to come to power, be able to field a more competent set of Ministers and Assistant Ministers. I do not think so.

      A mere election does not in and of itself make democratic government work as it should.

      Given the skill level of members of parliament in both the government and the Opposition parties I think the pay scales are somewhat higher than they ought to be. But I still hold to the via that MPs in general should be well paid. The problem is to get talent that deserves to be well paid. So far that has not happened and is not likely to. That's the rub.

    4. 'Therefore I'm naive', NOOO Croz, to quote you, you are not 'naive', just 'optimistic'!! Always ready to defer to the regime or whatever guise it is in now.

    5. where is jim anthony? which world- two of nfp's mps? one is a former professor of econmics and one is a lawyer of repute and another is a former leader

  3. The PMs real wage is more than four times that amount when you take into consideration unlimited first class travel for him and his wife ( think 40-50k a trip and he's a prolific traveller ) then the free car, house, phone and help. While away he pockets daily allowances despite having all expense being paid.

  4. An egregious and gratuitous carbuncle on the face of democracy. Do they sleep perchance to dream of more?

  5. Look like the the boys from the coup, who selflessly have worked for nothing these past eight years are getting what they see fit, before they accept any oversight from parliament of course. Looks like 'noses in the trough' is good enough for this bunch eh Croz?? Altogether too quick to look after themselves and lock in a pay generous pay increase??

  6. 'Using Fiji's choice of a comparison with private sector CEO's, for example, ANZ's CEO David Hisco earned a A$3.26m remuneration package last year, equal to NZ$4.1m at the time, making him the country's highest-paid executive'. What a stupid comparison and joke on the people of Fiji , the salaries in Fiji are paid by the tax payers. If Bainimarama and his cronies wanted that sort of money they should had a coup in ANZ bank.

    1. @Jo34 ... You misunderstand me. My local comparison was with USP salaries. I used it because I don't know Fiji private sector salaries and thought USP would be reasonably close. The overseas comparison between NZ CEO Hisco and Bolivian President Morales was to demonstrate extremes based on different ideas (ideologies) on what is right and just.

    2. Huh? Croz your confused logic is making the brain dead fool lockington look good?

  7. The Uruguayan President beats everyone for frugality

    But it's not just about living a frugal lifestyle - it's about a hands off style of government. Something that most politicians in every country in the world would do well to learn from.

    In general you are not needed. In general you are a blight on the countries you purport to govern. In Fiji this has been proven time and again by virtue of the coups. Without a parliament the country didn't stop - the population continued to work, make money and live.

    A functioning civil service is all that's required to help grease the wheels of commerce. Not the self aggrandising dictators, the elected parliamentarians or the pompous diplomats that produce..... nothing.


All polite, reasoned, original comments welcomed. Please use your real name or a pseudonym by clicking on the down arrow next to Comment and then select Name/URL. You do not need to fill in URL. . Anonymous comments make discussion difficult..