Premier Dominic Perrottet says termination payments for MPs has ‘merit’ but not a priority

The Premier has “guaranteed” politicians won’t be getting redundancy payments in the upcoming state budget, as Daily Telegraph readers vote overwhelmingly against the idea.

Premier Dominic Perrottet says introducing termination payments for state politicians who lose their seat or step down has “merit”, but has insisted the measure isn’t a priority for his government.

Parliament Speaker Jonathan O’Dea believes termination payments for MPs who lose their seat or quit at an election, but Mr Perrottet said he could “guarantee” there’d be no redundancy payments introduced in this month’s state budget.

“I appreciate that and people lose their jobs and they haven’t got any entitlement. I understand that…but ultimately, right now, what we’re focused on is the New South Wales budget and I can guarantee you, there’ll be no politician redundancy payments in this upcoming budget,” he said.

Mr Perrottet said the proposal had merit but it was not the government’s focus.

“I think there is merit obviously in what the Speaker is putting forward in terms of people who lose their jobs and not having a leave entitlement…I appreciate that but it’s just not something we are focused on at the moment,” he said.

Premier Dominic Perrottet may come up with his own scheme termination payments scheme Picture NCA Newswire/Gaye Gerard

The Daily Telegraph revealed the push within parliament for some kind of termination entitlement to be introduced, from as early as next year.

The change is being considered to ensure MPs who resign or lose their seat at the election are able to pay the bills while looking for another job.

Unlike most full-time workers, NSW MPs do not get redundancy payments or termination packages, and because MPs do not get annual leave, they cannot be paid for any unused holidays when they resign or are fired by voters.

Strict rules about employment after politics also mean that ministers who quit at an election or lose their seat are blocked from taking up a job that relates to their portfolio for 18 months, unless they seek advice from the Parliamentary Ethics Adviser.

Consideration is being given to one of either two ways of implementing the payments.

The independent Parliamentary Remuneration Tribunal (PRT) could be tasked with coming up with a scheme to pay MPs when they leave at an election, or Premier Dominic Perrottet could move to implement his own scheme.

The Telegraph understands that Mr Perrottet is concerned that if the matter is left to the PRT, the statutory body may recommend wage increases or termination payments too large to be politically palatable.

Speaker Jonathan O’Dea is understood to have raised the issue with the Premier, and his predecessors, thinking that it should be addressed as a matter of fairness to be consistent with community standards.

One argument cited in favour of giving MPs termination packages when they resign is that it would encourage politicians to work “diligently” for their constituents until the end of their career, rather than spend time searching for a new job.

Those in favour of granting termination entitlements believe there should be strict rules in place to only grant termination packages if MPs leave at an election, discouraging the need for by-elections.

However senior government figures believe it would be “politically impossible” to do before the public sector wage cap is lifted, something which will occur in the State Budget next month.

The base salary for a lower house MP is $169,192. Each MP also receives an electoral allowance of between $52,205 to $146,685 based on the size of the electorate.

The allowance can be kept by the MP, but it is commonly used to pay for things in their electorate, such as raffle tickets or flowers for grieving constituents.

The Premier gets $407,980, excluding the electoral allowance.

Any move to grant MPs extra entitlements is set to be opposed by Labor leader Chris Minns.

“Taxpayers shouldn’t have to fork out money if they have dispatched an MP, particularly right now when everybody is so badly squeezed,” he told The Telegraph.