Losing Politicians Set to Receive Millions in ‘Resettlement’ Payouts

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The “stating the bleeding obvious” award this week goes to New South Wales Premier Dominic Perrottet who publicly declared to the mainstream media that the ‘major political parties have lost voters’ trust.’ 

Mr Perrottet made the remark in the wake of Saturday’s Federal Election win by Labor – but in any context, it’s a statement that many Australians would wholeheartedly agree with right now. 

Ineffective government

Politics across the nation over the past few years has been characterised by systemic pork barreling and funding rorts, as well as other questionable decision making and deflection from multiple crises, all in the context of increased governmental controls, including cover-ups and the suppression of dissent under threat of criminal prosecution.

There have been corruption investigations at a state level, convictions also at a state level, and major, expensive and embarrassing bureaucratic bungles – here at home, and on the international stage. 

Adding to this are allegations of bullying, sexual harassment and even sexual assault in the workplace, along with plenty of examples of generally poor, unethical and disingenuous behaviour at the hands of those who are meant to represent the public. 

There has been appalling treatment of refugees, no significant change in the inequities facing Indigenous Australians or the number of them dying in custody. We have an increasingly militarised police force which is moving further and further away from effective community policing. 

We have laws which erode our privacy and encroach on our freedoms, climate change is a neglected concern, and homelessness, standards of aged care, the embattled health system, domestic and family violence, violence against women, poverty and rising living costs continue to pervade a nation once known as the ‘lucky country’.

Australians are champing at the bit for real and meaningful change – whether or not we’ll actually get it under Anthony Albanese’s reign remains to be seen. 

Payouts for ousted politicians

Amongst all of this, taxpayers will foot a $2 million dollar bill to remove MPs and senators who were voted out on election day. 

The ‘resettlement’ allowance is designed as a sort of redundancy allowance, to assist former MPs to return to civilian life and find other jobs. 

Former federal treasurer Josh Frydenberg is one MP who will be entitled to the allowance (capped at 6 months’ worth of salary) as he leaves office, and his $400,000 job behind. 

Former Prime Minister, Scott Morrison won’t receive the payout because he has indicated that he intends to stay in Parliament, but he was a champion of the allowance when it was first introduced in 2019. 

To be eligible for the payment, MPs need to serve more than a full term – for some it’s worth more than $100,000. Other MPs and senators who lost their seats but don’t qualify on length of service are entitled to three months’ pay – valued at around $50,000. 

Former PM defends the payments

Scott Morrison recently defended the payment – for which about 20 Federal MPs will be eligible for, saying:

“…these ­arrangements exist in the private sector and public sector and they don’t discriminate whether you’re a politician or you’re a journalist”. 

But many believe that making blunt comparisons between the public and private sector is never a case of comparing apples with apples, most notably because the private sector has in-built mechanisms to measure both employee performance and accountability, which our public sector seems to lack. 

Fostering poor performance and unaccountability 

This begs the question of whether it is fair or even necessary that politicians receive the same kind of financial entitlements as those offered in the private sector. Affter all, election day is a bit like the ultimate performance review. 

Politicians are voted out when they’re no longer meeting the expectations of the public – it’s how the democratic system works, and what every politician accepts as the nature of the job at the time of signing on. 

Furthermore, as an example, if an employee in the private sector had been investigated and found to have allocated funds without adhering to the strict guidelines set down by company policy and then was found to have shredded important documents in relation to those funds, then that employee would, most likely face the consequences and be dismissed – most likely without warning and potentially without any financial payout or other benefits. 

By comparison, when such wrongdoing occurs in the public sector, there are often no repercussions for those involved. 

While the New South Wales Independent Commission Against Corruption (ICAC) does a credible job of investigating serious allegations of misconduct, much is allowed to be swept under the carpet – often through blame shifting or PR spin or because of ‘other priorities’. 

Notably, at a Federal level there is no equivalent and it’s long overdue. 

Federal Integrity Commission must be high on the agenda 

With a change in leadership, now is the ideal time to establish some kind of national integrity commission not just to reinstate trust in the political system and democratic processes, which is desperately needed, but also to ensure more transparency around spending public money to ensure that funds are allocated for necessary public purposes and not political gain, and to ensure that decisions are made with accountability. 

Without it, we will have just elected a government that, as its predecessors have done, turns a blind eye to the potential for corruption and which condones low standards of performance. 

In the absence of real accountability, the sense of entitlement that exists amongst many of our politicians is likely to persist, and that represents a very slippery slope for democracy. 


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Sonia Hickey

Sonia Hickey is a freelance writer, magazine journalist, and owner of 'Woman with Words'. She has a strong interest in social justice and is a member of the Sydney Criminal Lawyers® content team. Sonia is the winner of the Mondaq Thought Leadership Awards, Spring 2022.

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