IN A LANDMARK case of the Liberal Party listening to the Labor Party for the first time in eight years of ALP Opposition, John Howard apparently knew a good thing when he saw it in Mark Latham’s plan to axe the luxurious superannuation scheme for federal MPs.
Howard is yet to disclose any strong opinions about slashing those lavish “hidden” benefits that judges also enjoy. Members of the judiciary shout mercy while the Law Institute of Victoria (LIV) and the Law Council of Australia have condemned Latham’s pledge to cut these as well, saying it would deter top quality lawyers from moving to the bench.
Late last week, Latham promised to make the change as part of a plan to fine tune politicians’ superannuation schemes. He said that like politicians, judges were being awarded payouts that were beyond what the average Australian received.
“They offer superannuation benefits seven times more generous than the current contribution scheme available to the general public,” said Latham last week.
Arguing that the superannuation scheme for judges was particularly generous because they don’t make any contribution to their superannuation, Latham said the superannuation scheme for judges and politicians was indefensible and had “become out-of-date”.
The LIV said the superannuation level was in part aimed at attracting the top legal brains in Australia. LIV president Chris Dale said that “if you are to attract the best judicial talents, there is a need for proper superannuation remuneration for judges.
The quality and experience of lawyers moving to the bench would otherwise be hindered, Dale said. “Many of the top lawyers in the country join the judiciary in order to serve the community and the administration of justice. They should not be unfairly penalised by [the Government] cutting their superannuation.”
Speaking on ABC radio last Friday, former Chief Justice of New South Wales, Sir Laurence Street, agreed that a judge’s overall package “has to bear a relativity to what a top lawyer might be earning”. He further suggested this would be the final straw, discouraging top lawyers from the bench.
Street pointed out that “at the Bar, if you suffer an illness or are unable to practise, well, your income dries up that very day, so the security of a regular salary and the certainty of a pension of an adequate amount is very significant in attracting top lawyers to the bench”.
Latham’s point is that the superannuation scheme for judges should only be brought down to represent the reality for most Australians.
Apparently seeking alternative boosts for judges, if the super schemes crumble beneath them, Dale said that “if we start tinkering with the superannuation levels of judges, we would need to review their salary levels.”
The Law Council has labelled the Opposition’s proposals as “cheap populism”, claiming that although it was legitimate for Latham to raise the issue of judicial remuneration, his reported statements had so far just been “headline grabbers”, rather than considered policy.
Law Council president Bob Gotterson QC agreed with the LIV’s Dale, and said that to attract and maintain the “best minds for the courts” the existing remuneration package was essential.
Latham’s proposals were recommended in 1996 by the National Commission of Audit, ordered by Treasurer Peter Costello, which also suggested judges and MPs should be shifted to the type of super schemes that apply to most workers.
But last week Costello defended the generous super scheme for politicians, ahead of the PM’s later support for the axing, and said it was quite restrained by private sector standards.
In an interview with Lawyers Weekly, Shadow Attorney-General Nicola Roxon discussed the Law Council and LIV’s concerns. Acknowledging the importance of paying judges appropriately “for the important job that they do”, Roxon said if she became the next Attorney-General she would want to be able to appoint the very best people to the judiciary.
However, she said the Labor Party believed that the existing “very secret superannuation scheme” was not necessary to attract the very best people. “Schemes need to be transparent and they need to be on a community standard.”
She said Chris Dale’s assertion that the salary levels of judges would need to be raised if Labor’s proposals were implemented had already been considered by Labor. “This may mean that judges’ salaries are increased and we are willing to talk to the profession about this,” Roxon said.
Predicting the proposals were likely to incur “very serious consequences”, Roxon added that the party would ensure federal appointments would not be disadvantaged “and we will refer their remuneration package to the remuneration tribunal to assess appropriate rates of pay”.
The tribunal has previously taken into account judges’ superannuation when fixing judges’ salaries, Roxon said, so it would be expected their salaries would be reassessed if their superannuation changes.
But Roxon rejects the Law Council’s claims that top lawyers would not be attracted to the judiciary if judges’ super was decreased. “I believe it’s incorrect to focus on superannuation schemes as the only thing that attracts lawyers,” she said.
The concern for Labor was that at a federal level, superannuation schemes for judges were not transparent. “Public appointments should have transparent payment schemes,” she added.
Acknowledging that it must be a surprise to the profession to hear Labor’s plans to change judges’ superannuation entitlements, Roxon added that despite this, “it is important to get the right package for the future”.