This article is published in cooperation with the Jagiellonian Club think tank.
On Friday, MPs from almost all groups in the Sejm, the lower house of parliament, voted in favour of increasing their own pay by 60%, as well as raising that of president, prime minister and other senior officials. Following public anger, this week the opposition performed a U-turn, voting to reject the bill in the Senate, where they have a majority.
The ruling Law and Justice (PiS) party, which holds sway in the more powerful Sejm, could in theory overturn the Senate’s decision. But, without opposition support, it appears unlikely to do so. This is a missed opportunity, writes Piotr Trudnowski, who argues that the salaries of senior state officials should be increased.
There is never a good time for a pay rise for politicians. Any such decision is greeted with populist and absurd attacks. But now, in the middle of the holidays and silly season, with the longest time without elections for many years ahead of us, from the point of view of political calculation such a move would have made sense.
It could have been the only opportunity for essential reform to take place without a furious attack from the opposition. Crucially, the mechanism of automatic indexation of salaries included in the bill could solve the problem of politicians’ salaries once and for all.
Pay rises for politicians: who will earn more, and how much?
Last week, a bill changing the rules governing politicians’ pay in Poland appeared unexpectedly in the Sejm. Less than two years ago, MPs’ salaries were reduced. The reason for this was a “bonus scandal”, when the public became aware of special allowances and awards used to make politicians’ salaries more attractive.
This dysfunctional system was scrapped, resulting in the reverse effect. Rather than putting an end to the wheeling and dealing by raising salaries, PiS party leader Jarosław Kaczyński opted for the populist gesture of “cuts to all”.
What are the most important changes in the newly proposed legislation? It would raise the gross monthly salary of the Polish president from its current level of almost 18,000 zloty (€4,100) to 26,000 zloty. The prime minister, who currently earns just over 14,500 zloty, would see his earnings increase to 22,000 zloty.
The speakers of the Sejm and Senate would receive the same amount, up from the level of under 12,000 zloty they were reduced to two years ago. MPs’ salaries would also rise, from around 8,000 zloty to approximately 12,600 zloty (though they also receive expenses and bonuses for work on committees).
The most important and desirable salary increase is certainly the one concerning ministers and deputy ministers. After all, it is they who are actually responsible for running the country. Ministers would earn around 18,000 zloty, an increase from 12,705 zloty, and their deputies around 17,000 zloty, up from 10,000 zloty.
Additionally, the legislation would regulate and increase the salaries of deputy speakers of the Sejm and Senate, provincial governors and their deputies, and also “political” local authority employees: heads and deputy heads of provincial executive boards; county council heads, deputies and members; and mayors of cities, towns and villages.
Finally, the bill also proposed introducing a salary (the same amount as a minister) for the president’s spouse. A function that has previously been voluntary would thereby be recognised as a job deserving decent pay.
Indexation included: a sensible step
What was the greatest virtue of this bill? Standardisation of funding rules and the automatic indexation included in the legislation. As a result, if adopted, the regulation would not require further amendments, and politicians’ pay would increase proportionally to the average salary in Poland.
Yet the direct reference point in the legislation is not the infamous “national average”, but the basic pay of a Supreme Court judge. This, as with all judges’ salaries, is linked to the average pay in the economy.
Advocates of pegging politicians’ salaries to results, in this case citizens’ economic situation, should be satisfied. Every year, politicians would earn proportionally more (or, God forbid, less) depending on how much we all earned on average the previous year.
The payment system for politicians would therefore become more transparent and less discretionary. To date, it has been regulated by several different laws, and for example the prime minister, speakers’ and ministers’ pay was set by a presidential decree. Most salaries were based on a rather murky factor system comprising the basic pay and special duty allowances. The new regulation simplifies the system and seems to scrap this institution of supplements.
This change could mean not only avoidance of any future battles over salaries, but also approaching a fully transparent standardised system, in which the representatives of the judicial, legislative and executive branches, but also of local authorities, would earn money in a harmonised way linked to the state of the Polish economy.
Furthermore, in the logic of the bill, the “salary hierarchy” follows the symbolic precedence of people in the state. The president would earn the most, followed by those in the second and third most important positions (the speakers) and the prime minister, and then ministers, etc. This somewhat symbolic-conservative justification of salaries seems – for want of an alternative fair criterion – a sensible solution.
Pay rises and the state budget
While the public are not particularly interested in provincial heads and local authorities, the earnings of the president, prime minister, MPs and the first lady arouse heated argument. Let us therefore concentrate on these individuals fulfilling the most important state functions at central level.
Unfortunately, the bill does not contain an estimate of the costs of the change. According to my own calculations, though, they come to around 55-60 million zloty annually for politicians at national level.
From the perspective of state expenditure, this figure is a drop in the ocean. Compared to the pre-crisis state budget for 2020 (which will ultimately be much larger), it represents just 0.013% of the budget. And yet we are talking about better pay for the people responsible for the remaining 99.987% of state money.
Of course, it would be inappropriate to make light of several tens of million zloty, especially at a time of an increasingly pronounced economic pandemic crisis. Nevertheless, it is important to remember that this is about rewarding the people who carry enormous responsibility for the working of the state and public money, whose salaries were not only stationary for years, but in 2018 were even reduced.
As the authors of the bill point out, in the last five years average earnings in the national economy have increase by more than 26%, while pay in the civil service grew by over 21.5% between 2016 and 2019. In a comparable period, the base level for payment of people in key political positions increased by 1%, and in the last 16 years it has gone up by just 6%.
Politicians have therefore begun to be paid badly not only compared to rival leadership positions in the private sector, but even in the state administration. Let us go back to the most understandable example, of ministers and deputy ministers, who are often responsible for budgets and decisions worth hundreds of million zloty or more. In practice, deputy ministers have often earned less than their subordinates – and increasingly this has not just concerned directors, but more junior officials too.
There is never a good time for this decision
The obvious context for interpreting the unexpected bill civilising politicians’ pay is of course the overall economic situation. We are in the brink of recession, many Poles have begun to earn less, and payment freezes are expected in the budget sector. This is all true, and makes the timing of the new proposals dubious.
In today’s tabloidised reality, however, any time for such a bill would be bad. It will always be met with populist opposition. In the eyes of the public, there will always be “others” who deserve pay rises first – even if the sizes of the groups (several hundred politicians at national level vs hundreds of thousands of teachers or nurses) mean that the costs are completely incomparable.
However, there is one important factor in favour of making this change now – the political calendar. We are in the middle of the holidays and political silly season. It has been many years since we have had so long to wait till the next elections. This means that the political costs of a necessary change delayed for years by successive governments should be lower than at any other time.
This was visible immediately, as opposition politicians generally backed pay rises for their profession. In the Sejm, the bill passed to its second reading with a rare majority – just 28 MPs voted against (from Confederation, Together, Kukiz’15, the Greens and a few other, young Civic Coalition members) or abstained. The rest of those present were in favour.
At any other time, the opposition would not have passed up the opportunity to start a populist row over the government’s plans with their allegedly Byzantine financial intricacies. It seemed today that, as one of the beneficiaries of the rises, they were willing to spare us the unseemly anti-state spectacle.
The shameful reality of compromise
Unfortunately, a few bitter words about the Polish political reality are inevitable.
Firstly, it is sad that such a necessary and sensible bill should need to be adopted suddenly, quietly and at express pace. In an ideal world, it ought to be a widely consulted government bill, complete with a reliable evaluation of the consequences of the regulation. The government legislative process would at least permit avoidance of such gaffes as voting on a bill with one clause stating that provincial governors will earn 75% of the salary of a Supreme Court judge, and another giving the figure of 85%.
Unfortunately, this kind of proper procedure would probably had made a “compromise” passage through the Sejm impossible. It is obvious that large sections of the media would “grill” the idea of pay rises. Sooner of later, one of the opposition factions, scenting political interest, would begin to attack the bill. On this occasion, a rapid procedure in the holidays meant bypassing not just mean consultation procedures, but also our public debate, broken by anti-state particularism.
Secondly, it is hard to be enthusiastic about the fact that an extra-party compromise in important state affairs is only possible when the beneficiaries supporting it are all political alliances separately, and not just the state.
Of the cited costs of 55-60 million zloty for raising the salaries of politicians at national level, some 70% will constitute the cost of increasing MPs’ pay. Yet these were certainly the least urgent, and could be regarded as the “political cost” of introducing essential increases for the executive branch. Just to be clear: the political cost both for the opposition and for the ruling camp’s MPs.
Added to this, we have the question of increasing political parties’ subsidies by half. While it is fundamentally worth defending budgetary funding of parties (reduced as a crisis measure in 2011), right now this expense seems unnecessary, and could easily have waited for economically calmer times.
Except, of course, that the potential benefits from improving the financial situation of parliamentary parties are shared by practically the entire political class. Especially considering the impending economic crisis and the possibility of appearance of an “anti-systemic”, non-parliamentary competition for all the parties in the Sejm.
But if one of the parties decides to criticise the bill, they should not limit themselves to easy and media-friendly finger-pointing at incompetent ministers or the introduction of a salary for the first lady, based on populist and empty comparisons with the pay of teachers or doctors. Constructive criticism of the bill should be based on support for systemic regulation and improving the pay of the executive branch while calling for “waiting for better times” to increase MPs’ earnings and raising party subsidies.
More money? Greater responsibility, transparency and efficiency
Finally, let’s recall two basic arguments as to why politicians should be paid better and consider what political consequences pay rises would entail.
Most importantly, politicians should earn good money in order to eliminate the profound disproportion between key positions in the private sector and the often even more important functions in the public sector. Low salaries have for years bolstered the phenomenon of “negative selection” for the profession of politician.
The famous words of former minister and European Commissioner Elżbieta Bieńkowska, that “only an idiot or a thief can work for six thousand [zloty]”, however politically incorrect, convey well the non-partisan understanding of the negative consequences of such low pay for important individuals in the state.
It is also significant that low earnings increase the risk of pathologies in public life. Corruption, nepotism, “retirement” in state-owned companies as an element of the political path, susceptibility to illegal forms of lobbying, open “revolving doors” to former politicians – these are all phenomena which will never be fully eliminated, but better pay would ensure that the political class will be less open to such temptations.
Cross-party agreement on pay rises for politicians should therefore also make them more accountable for their work to citizens, providing systemic support for transparency of public life and tightening anti-corruption mechanisms. The other side of this coin should be comprehensive regulation of financial transparency on the basis developed during the previous PO-PSL government by the justice ministry, an end to limited access to public information, adaptation of lobbying laws to reality or introduction of transparency, at least for the political and nepotistic aspects of employment in state-owned companies.
Here, though, cross-party agreement of the political class seems unlikely. Again, the opposition will be in favour, and the ruling party opposed, and should the government change, roles will be reversed.
Part of a larger reconstruction
Lastly, an important context of the mooted pay rises is the planned consolidation of ministries. This is a promising reform, which demands a deeper interpretation than analysis solely in the context of political moves in the ruling camp. What it should mean – although this is a subject for a separate analysis – is better coordination of public policies, more horizontal state administration and expected strengthening of the prime minister’s office in the political process.
Fewer ministries could also bring (though this should be a positive side effect, not an objective) savings justifying the costs of the pay rises. It will certainly also be necessary to put the very best specialists in the top positions in the newly formed super-ministries.
In this sense, the government reshuffle expected in the autumn can be treated as a test of politicians’ intentions. If state-focused thinking prevails, we will see a sensible structure of ministries and strong names at the helm. Then we should have no doubt that the calls for pay rises are justified by the government plotting a more meritocratic course.
But if the political calculations sustaining the silo mentality of an ineffective state triumph, then come the next elections, voters will remember MPs’ desire to award themselves higher salaries.
The original version of this article can be found here. Translated by Ben Koschalka.