Independent Commission for Remuneration of Public Office Bearers: briefing

Q:  A journalist asked whether mechanisms were in place to discern against the distinction between party and constituency work, in respect of the R120 000 tax break. Furthermore, the question was raised whether the difference between the figures from 2007 and 2008 was a recalculation of the Consumer Price Index at 11%, and not 7%.

A: Mr Justice Moseneke replied that the salary increase was motivated by changes in the CPIX and that the motivation for this was outlined in the Government Gazette. He stressed that the R120 000 figure was not a tax break and stated that there was repeated representation by parliamentarians that they had to use their own funds for constituency work. He added that the policy around this needed to be worked out by the Receiver of Revenue.

Q: A journalist stated that headmen had complained about their salaries of traditional leaders not being equal to salaries of other House Members, and asked whether this discrepancy had been addressed.

A: Mr Justice Moseneke replied that the Commission’s recommendations covered all fields except headmen. He added that the legislation needed to be brought in line, and that there were various different pieces of local legislation that governed this. The problem would be addressed, through legislation.

Q: A journalist asked what was the difference between a percentage increase and what was being espoused here. He also asked for explanation why the recommendations had been ignored up until now.

A: Mr Justice Moseneke replied that he did not know, and stated that the process had been a back-and-forth exchange between all concerned parties. He added that the baseline increase was not a percentage increase. It was clear after the 2007/08 period that the previous recommendation was undermined by the passage of time.

Q: A journalist asked how the recommendations concerning those who had served for five years and longer would apply for individuals who had served from 1999 to 2004.

A: Mr Justice Moseneke replied that the motivation was that the average stay in parliament was between seven and eight years. Previously, if a Member had served up to five years then one third of his or her pension was paid out upon resignation, and the remaining portion was paid over the course of his or her life, which had created a burden on the system through constant small payouts. He added that this would not apply to the 1999 to 2004 period, but the pension would backdate to 1994.

Q: A journalist asked why it was necessary for MPs to receive a gratuity payout after five years of service.

A: Mr Justice Moseneke replied that a lump sum payout paved the way for exit of Members of Parliament. He noted that much attention had been paid to the fact that there was a need to attract the best South Africans.

Q: A journalist asked when the recommendations would be approved and when they would come into effect. He also asked if former-President Mbeki would receive back pay.

A: Mr Justice Moseneke replied that the recommendations would be effective from 1 April 2008 and that anyone on the books from that date would receive back pay. He added that he was unaware when the President would approve the recommendations.

Q: A journalist asked how big the salary difference was between Speaker and Deputy President.

A: Mr Justice Moseneke replied that usually the executive was paid more than the judiciary or the legislature, but that the figures were all available and that they could be worked out.

Q: A journalist asked whether comparable economies were used for international comparisons.

A: Mr Justice Moseneke replied that the Commission tried to do so, but that it was difficult, as most countries did not make this information available to the public.

The briefing was adjourned.

INDEPENDENT COMMISSION FOR THE REMUNERATION OF PUBLIC OFFICE BEARERS

Press release statement               

Wednesday, 15 October 2008

On 30 March 2007, the Commission published a report and recommendations following a major review of public office bearer remuneration (First Review Report).  As required by law, the First Review Report was submitted to Parliament and to the President for approval and was published in the Government Gazette.  However, the First Review Report did not include a consideration of pension, medical benefits and tools of trade due to public office bearers.  After a further and extensive review, the Commission released another set of recommendations (Second Review Report) on pension and medical benefits.  The Second Review Report was submitted to Parliament and to the President and thereafter it was published in the Government Gazette on 17 April 2008.

Neither the First Review Report nor the Second Review Report was adopted or implemented by the President and Parliament.  However, in relation to the financial year starting on 1 April 2007 the President and Parliament implemented an alternative recommendation of the Commission premised on an inflation based cost of living increase on existing remuneration.  Again, when the Commission made its recommendations in the Second Review Report it also included alternative recommendations informed by inflation related cost of living increase on existing remuneration with effect from 1 April 2008.  It follows from what has been said that the Second Review Report of 2008 should be considered together with the First Review Report of 2007.

It is important to keep in mind that the Commission consulted with public office bearer representatives during its processes, communicated its draft recommendations contained in the First and Second Review Report directly to public office bearer representatives, received and considered submissions and only thereafter published its recommendations in March 2007 and April 2008 respectively.

On 19 August 2008, the President requested the Commission to advise him on submissions received from certain public office bearer representatives on the Second Review Report and on an inflation linked percentage increase to all public office bearers for the 2008/2009 financial year.

On 5 September 2008, the Commission met to consider the fresh representations referred to it by the President and having considered all the relevant circumstances, resolved not to change its recommendations in the First and Second Review Reports, except in the following respects:

By adjusting the remuneration levels recommended in the First Review Report by a CPIX of 11% annum with effect from 1 April 2008 instead of the 7,5% per annum that was used in the calculations in the Second Review Report published in the Gazette of 17 April 2008.

By recommending a once-off gratuity or terminal benefit in the following terms:

A member of Parliament or of the provincial legislature who has served a period of 5 years or less should not be entitled to a pension but rather to a once-off terminal payment equal to 45% of pensionable salary for every year of service;
A member of Parliament or of the provincial legislature who has served more than 5 years and whose term of office has ended be entitled to a once-off gratuity equal to 4 months pensionable salary for every 5 years of service or a pro-rata part of the 5 year period; and

By recommending that the allowance provided for in section 8(1)(d) of the Income Tax Act, 1962 be increased from R40 000 per annum to R120 000 per annum in relation to every member of Parliament or of a Provincial Legislature.

The Commission has revised its recommendations on remuneration of public office bearers to be found in the First Review Report by proposing inflation based increase from 7.5% (that was recommended in the Second Review Report) to 11%.

In view of the above considerations, the Commission recommends a general percentile increase in salaries, allowances and benefits for all public office bearers from 7.5% recommended in the Second Review Report to 11% per annum with effect from 01 April 2008.
The Commission recommends that all municipal councils be entitled to the allowance permitted by section 8(1)(d) of the Income Tax Act, 1962 of R 120 000.00 per annum.
As required by the applicable legislation, the Commission has, consulted with the Minister of Finance, the Minister of Justice and Constitutional Development and the Chief Justice.

A Government Notice setting out detail revised recommendations will be published in the Government Gazette on 15 October 2008.