‘Embarrassing’ MPs’ honoraria increase not carried out with best practice

FULL data: Ministerial salaries and honoraria

An inquiry by the Auditor General has found that the increased parliamentary honoraria that Cabinet ministers paid themselves in 2008 should have been reflected in the money vote of the House of Representatives - rather than being secretively charged to their ministries' budgets - saying the saga had been an "embarrassing experience."

Auditor General Anthony Mifsud described Lawrence Gonzi's decision in May 2008 to award Cabinet ministers a higher parliamentary honorarium than MPs, as a "good example of bad practice that led to a considerable amount of controversy and public outcry."

Mifsud said there had been no evidence of illegal misappropriation of public funds, and that the principle that ministers and parliamentary secretaries receive both honorarium and their ministerial salary as one single payment, was not incorrect.

But the findings of the NAO have shown how the first revelations by MaltaToday back in November 2008 of ministers' increased €500 weekly salary, had only been the tip of the iceberg.

"For transparency's sake, whilst respecting the need to deal with Cabinet's decisions with the utmost confidentiality, taxpayers should be duly informed of such increases," the Auditor General said.

In its findings, the NAO says:

-       the Office of the Prime Minister was unaware from which budgetary vote the honoraria were paid, leaving it at the discretion of the finance ministry;

-       that the increased honoraria were being paid from the respective ministries' allowance accounts, because the honoraria were a temporary measures pending more discussions on the MPs' packages - although the Budget Office had not part in this decision;

-       contrary to best practice, a different accounting treatment was applied: the parliamentary honoraria were paid out of the ministries' salary accounts when these should have been charged to the House of Representatives, from an account specifically called 'holders of political office' from each respective ministry.

-       the House of Representatives was not informed of the increase, leaving the Opposition leader and the Speaker of the House - whose salaries are tagged to those of Cabinet ministers - without the increase.

-       Incorrect implementation of Cabinet decision was mainly attributable to unclear communication among key stakeholders. Clear instructions were lacking.

The Prime Minister increase cabinet ministers' salaries on 5 May 2008 by two measures: increasing their salaries to €38,000 and also awarding them the previously forfeited parliamentary honorarium, however at 70% of the civil service's Scale 1 salary - while MPs, still paid at the customary 50% of Scale 1, were apparently in the dark about the increased honorarium.

Although the Opposition leader and the Speaker of the House had to be awarded this increased salary, since they are tagged to Cabinet salaries, their increase was effectively halted because the House of Representatives cited lack of funds and not being informed officially of such increases.

This left all MPs at their current package of 50% honoraria, while Cabinet ministers were paid their 70% honoraria from another budgetary vote.

Later, the Speaker was also paid the 70% honorarium, whilst no honorarium was paid to the Opposition leader.

In an ensuing two-day debate in February 2011 on the parliamentary honorarium, which followed unrest from inside the Nationalist backbench, the Prime Minister announced that the Cabinet would refund the 'extra' 20% honorarium paid over the past three year.

The refund is being paid back by means of a monthly fixed deduction, to be paid up to December 2012. The former Speaker Louis Galea refunded his surplus honorarium on 30 October 2011.

Former social policy minister John Dalli said he refunded his honorarium on 15 November 2011.

The Auditor General said Cabinet decisions involving MPs should be communicated to the House of Representatives to avoid misunderstandings, and any similar increases have to be given by the responsible authority to ensure all ministries adopt a 'uniform and standard' incidence of charge.