Andrew Laming
Andrew Laming (Image: AAP/Lukas Coch)

Andrew Laming has been effectively deselected by his local party — but he will still leave Parliament as a winner.

Under Parliament’s so-called “resettlement allowance” arrangements, Laming is now in line for a golden goodbye worth $105,625 — six months of his base salary — when he is replaced as the member for Bowman at the next election.

Laming initially said he wouldn’t stand for reelection but seems to have had a sudden change of mind, forcing his local party to block him from the preselection process. He will have known, as all MPs do, that resettlement payments are only available to members who “involuntarily” lose their seat, either through party deselection or defeat at the ballot box. Retiring from Parliament gracefully gets you nothing.

Maybe Laming’s change of heart was about the money. Maybe it wasn’t. Either way, Laming had 105,625 reasons to force his party to deselect him instead of merely walking away. It is what economists call a perverse incentive, and it is perverse indeed.

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The law says MPs deselected for “misconduct” are not eligible for resettlement payouts, but nobody is ever blocked from receiving them because the term misconduct is not defined in the legislation, and Parliament never got around to implementing a code of conduct for MPs.

It’s happened before, with no shame

Even disgraced MP Craig Thomson managed to bag himself a hefty resettlement payment when he left Canberra in 2013, despite facing serious charges of criminal fraud and theft at the time. It was alleged that, as national secretary of the Health Services Union (HSU) between 2002 and 2007, Thomson stole thousands of dollars of union funds to pay for sex services, fine dining and other personal spending, as well as misusing HSU cash to help him win his seat in Parliament.

(He was convicted in 2014 of 65 fraud and theft offences, though most were later quashed on appeal. He ended up with a fine of $25,000.)

Labor dropped him like a hot rock when the allegations became public, but Thomson made sure he got a big payout. He simply stood as a no-hoper independent, lost handsomely, then picked up his $95,275 resettlement payout after the ballots were counted ($27 for each of the 3444 votes cast in his name). Even if he were deemed to have been deselected by Labor for misconduct, his unsuccessful reelection bid sealed the cash beyond doubt.

Court papers put forward by Thomson’s lawyer before polling day made it abundantly clear Thomson knew exactly what he was doing.

“If the respondent does not recontest his seat, he will receive no payment when he ceases to hold office,” an affidavit filed on behalf of Thomson stated. “If he does contest his seat and is defeated, he will receive $95,275 before tax according to law after the election is declared.”

He played the game and secured himself a big money prize. It would be surprising if other MPs leaving Parliament did not make similar calculations.

Allowances cost taxpayers dearly

At least 20 MPs and senators are likely to have been paid a resettlement allowance after the 2019 election, which The Australian has estimated would have cost taxpayers somewhere around $1.3 million.

We can only speculate on the exact numbers, however, because House of Representatives officials refuse to provide official figures on the payouts. Australian taxpayers aren’t allowed to know these things.

Prime Minister Scott Morrison has previously defended the payments as being similar to redundancies for private-sector workers.

“These are arrangements that were put in place some time ago, and I’m sure when anyone leaves a job not of their own choosing, there are arrangements in place for people to do that,” Morrison told reporters in 2019. “All I’m saying is 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.”

Yet the value of MPs’ resettlement payouts are well above statutory redundancy awards and few Australians get a six-month salary cushion when they lose their job.

The Fair Work Act specifies that employees losing their job after two to three years (the equivalent of one term in the House of Representatives) are entitled to six weeks’ pay, while those working in the same job for more than 10 years, like Laming, get 12 weeks’ pay as statutory. Few Australians enjoy six-figure redundancy payouts.

Life and trials of an MP

There is merit in having some kind of parachute payment for parliamentarians who suddenly lose their seat, given MPs are effectively contracted only until the day of the next election and cannot feasibly apply for other jobs until the results come in.

But it is surely difficult for parliamentarians to credibly argue their payouts should be higher than the Commonwealth redundancy rates they set for other Australians. Six weeks’ base salary, or $24,375, would be more than adequate compensation for an MP who loses his or her seat after just one term.

Andrew Laming and other MPs who are deselected well before an election should arguably be disallowed from collecting any resettlement money when they leave Parliament, given they have ample time to seek out new employment before the end of their term. Finding a new income stream outside Canberra should be their responsibility, not ours. Or, as Scott Morrison put it when talking about welfare recipients, “job seekers on taxpayer support have no excuse to refuse opportunities”.

MPs have every right to put themselves forward for reelection to Parliament, Andrew Laming included. But such an important decision should not be coloured by a six-figure sweetener — and Andrew Laming should not be allowed to leave Parliament as a winner.