Saturday, 27 October 2012

Politicians’ Pensions

Recently there have been increasing discussions about the cost of public sector compensation and benefits. In Alberta, after the revelations at Alberta Health Services, the common man was made aware of supplemental pension funds. Now with the start of a new Parliament, the pensions of MPs and the Prime Minister are also coming under the microscope. The trend of supplemental pension seems to exist at all levels of the public sector. The questions are; why do they exist? Why are they so generous? Why do we continue to provide them?
Politicians like most of us are entitled to a pension, so are public sector workers. In the case of politicians, their career may be short lived and in many cases most of us would not agree to spend the time and aggravations they have to put up with.
We can all agree that the size and the formula used for politicians’ pensions are far more generous than most of us. They have large pensions, because in most cases they award themselves lucrative packages; albeit some government use an ‘independent’ individual or committee to award themselves compensation. The results produced by these independent adjudicators seem to always favor an increase rather than a decrease in compensation.
As for public servants we are always told that the pensions and benefits must be competitive with the private sector to attract good workers. All paid for by taxpayers.
I will go further in saying that if they do not like pension plans offered when they sign up, they can go and find a job in the private sector; where we are always told that compensations are better. They have a choice, while taxpayers never have a choice about the level of taxes they pay to support these inflated costs. History shows that public sector costs are rising to such levels that in some instances governments are going bankrupt in the United States, and Europe.
The dilemma faced by politicians who have large pension funds happens when some of them try to cut costs in the public sector. Given their lucrative packages, it becomes difficult to say to public sector unions that their compensations will be cut. Leadership demands that an example should be set from the top. Especially at a time of economic turmoil, there is not only a need to cut public sector costs but also an opportunity to restructure the civil service. How are politicians, of any stripe, be able to reconcile their compensation with major cuts?
The problem is that the public sector is rarely managed like the private sector. The demands of customer service may be the same but in the public sector they are rarely achieved to the customers’ satisfaction. In the private sector at least some shareholders do benefit from the results and share in the profits.
There is no doubt that the greater public awareness of the public sector’s pension funds regime is causing problems for politicians. It is time for politicians to take responsibility and reform their pensions. In our opinion there are better ways to have an equitable system for all. In addition to the proposed changes made by the federal Government it would be nice to see the implementation of the following:
  • Reduce politicians’ pension. At all levels
  • Increase the amount of RRSP and TFSA contribution for all Canadians
  • Reduce the tax rate on withdrawal of RRIFs, and annuities
Now that the federal politicians have agreed to review and change their pensions, it would be nice to see their provincial counterparts do the same thing.
Politicians must remember that their pensions are paid for by tax payers. Only when there is balance can they say they are accountable.
Marcel Latouche
President & CEO
The Institute for Public Sector Accountability

Vacuous Politicians

The first Presidential debate has exposed many of the flawed perceptions created by the main stream media for the past six years. Governor Romney’s performance showed that President Obama was often out of his depth on many issues and was caught like a deer in the headlight. The President often used talking points, so much so that his million dollar supporter Bill Maher, twitted that he may need his teleprompter.

The second debate  would have been worse had Candy Crowley, the moderator not intervened to help the President. The third debate was no better for Obama as he denied the failures of his policies and allowed Governor Romney to look more presidential.

While the race may not be over, the real issue is that the media continues to promote the President as the messiah that he is not. This is a man who promised ‘to slow the rise of the oceans and fixed the planet’, while the U.S economy, which is not entirely his fault, continues to putter along under four years of his policies. The media continues to publish differing polls which gives him an edge, when it is quite clear that the methodology used in certain polls maybe statically biased.

The elections in November are important not only for the U.S but for us Canadians who depend on them for 80% of our trade. Another Obama presidency may well hurt us as well as the rest of the world’s economy.

Here at home Justin Trudeau, he of the great hair and famous name has thrown his hat into the Liberal leadership race. The media is already in a frenzy. Some have even suggested that the Prime Minister should be scared of him. Once again a politician with absolutely no record is being thrusted upon the electorate because of his likeability. Just like a video of the President has been dismissed for being five years old, the media ignores the content and ideology of Justin Trudeau. Remember that Trudeau has made some very interesting remarks in an out of Parliament, including those about women circumcision, as well as his father’s National Energy Program.

He has dismissed these issues, but be wary of what he would do if elected as Prime Minister. Watch out for his support of the middle class, the perennial target for politicians’ support and who yet, always bear the brunt of policies which tax them to the hilt. As a former teacher, he will tout education as one of his platform’s most important issues, but will continue to support the current education system of heavy union involvement and which in recent past has been less than stellar. Watch how he may pander to the oil patch as he woes the West.
 Trudeau may be inexperienced but he will be guided by many astute Liberals who have served his father and are chomping at the bit to recreate what they lost. Problem is, the same old divisive may resurface.

His appeal to the youth of this country will be just as great as it is for Obama. With promises to include them in his future policies, as well as communicating with them on Twitter will resonate and create a formidable opposition to the Conservative Party if ignored.

Given his name and a lack of opposition in the Liberal party a coronation without scrutiny and proper vetting may ensue. Canadians should be careful not to pay too much heed to the media frenzy and hype created by social media. We should demand more in depth analysis of his policies and promises.
 Just like Obama, Trudeau will appeal to the social media followers, most of them Hollywood types, who as it turns out are just as empty as their candidate - more twits than tweets. The result may be another likeable, yet vacuous politician

Marcel Latouche
President & CEO
The Institute for Public Sector Accountability