Federal politicians handed pay rise and tax cut

FEDERAL politicians will be at least $4000 better off from next month after they were handed a pay rise on top of a tax cut.

FEDERAL politicians will be at least $4000 better off from next month after they were handed a pay rise on top of a tax cut.

Backbench MPs will be paid more than $200,000 for the first time because an independent tribunal decided to give them a 2 per cent pay rise worth almost $4000 from July 1.

The pay rise is the first for politicians in 18 months but comes at a time when wage growth is at a record low, with some retail, hospitality and fast-food workers also facing penalty rate cuts from next month.

Federal MPs and senators will also no longer have to pay the temporary two per cent deficit levy from July which hit Australians earning more than $180,000.

The combination of a pay rise and tax cut means Prime Minister Malcolm Turnbull — who is already paid $517,000 a year — will now be around $17,000 better off.

Mr Turnbull’s cash bonus is almost half the national minimum wage of $36,134 paid to more than 2.3 million workers nationwide.

Prime Minister Malcolm Turnbull will now be around $17,000 better off. Picture: AAP/Lukas Coch

The pay rise handed to politicians, as well as federal judges and bureaucratic fat cats, was decided by the independent Remuneration Tribunal.

The tribunal said it had received a “notable increase in submissions” asking for pay raises “based at least in part on private sector remuneration” in a sign some of public servants felt they weren’t being paid enough.

Australian Taxpayers’ Alliance executive director Tim Andrews condemned the decision from the tribunal.

“Australia has some of the highest paid bureaucrats in the world earning salaries two or three times their US and UK counterparts,” Mr Andrews said.

“It is an absolute disgrace that at the same time our politicians are raising taxes on struggling families and we have over $500 billion in debt our political class is rewarding itself with more lavish pay rises.”

Former PM Tony Abbott froze the pay of all politicians in the 2014 Budget, when he argued that all Australians — including politician’s and top public servants — needed to make a contribution to repairing the budget deficit.

It had come after a string of extraordinary pay hikes that boosted MPs salaries by $50,000 in just 18 months.

The $1000 a week pay hike at the time for backbenchers was designed to compensate for the loss of perks including global study trips and reforms to the Gold Pass for retired members that awards MPs free flights.

In 2008, Kevin Rudd froze politicians’ pay for 18 months citing the global financial crisis.

POLLIE PAY DAY

PRIME MINISTER MALCOLM TURNBULL

Now: $517,338

From July 1: $527,684

Plus a $6953 tax cut with the end of the two per cent deficit levy

OPPOSITION LEADER BILL SHORTEN

Now: $368,224

From July 1: $375,588

Plus a $3911 tax cut with the end of the two per cent deficit levy

Opposition leader Bill Shorten will be earning more than $375,000 a year after the pay rises take effect. Picture: AAP/Lukas Coch

BACKBENCH MPS

Now: $199,040

From July 1: $203,020

Plus a $380 tax cut with the end of the two per cent deficit levy

Minimum wage: $36,134

Average wage: $79,721

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