A week after The Times gave details of the May 2008 pay rises awarded to ministers and the anomalous way in which they were applied, the government is insisting this case is “closed”. The following is an explanation of the two main questions that remain largely unanswered, the context involved and the government’s arguments.
Question: Why did the Opposition Leader not receive his honorarium?
What happened?
In December 2010, Finance Minister Tonio Fenech answered a parliamentary question outlining a previously unannounced decision taken by Cabinet in May 2008. He said that “...the Prime Minister, ministers, parliamentary secretaries, the Opposition Leader and the Speaker would no longer lose the honorarium paid to other MPs”.
According to Cabinet minutes, published later, the decision was meant to be implemented immediately and was backdated to March 2008.
Mr Fenech also said the honorarium would be raised to €26,700 from €19,100, a decision that was later reversed when outraged government MPs found out ministers had already been receiving the new rate while other MPs were kept in the dark and on the old rate.
The Prime Minister ordered his ministers to refund the difference they had pocketed but allowed them to keep the honorarium at the old rate. He then asked the House Business Committee to decide whether an MP’s honorarium should be raised. No agreement was reached because the government rejected the Labour Party’s proposals to widen the discussion to the salaries of all political office holders.
Last month, The Times reported that Joseph Muscat had still not received his MP’s honorarium at the old rate, which he had been promised by Mr Fenech and which he had pledged to give, in full, to charity.
Besides his honorarium, Dr Muscat was also deprived, from day one, of an increase in his basic salary and higher duty allowance, which he was to receive according to the Cabinet minutes of May 2008.
What is the government saying?
When The Times first asked the Finance Ministry why Dr Muscat was not given his honorarium, a spokesman refused to explain, saying, after several requests: “I don’t have the information at this time.”
The day an item on the issue was published, the same spokesman said Dr Muscat would not receive the honorarium because “the package is closed for everyone”. He said the matter was referred to the House Business Committee and, since no agreement was reached, things would remain as they were.
When questioned, the Prime Minister offered a different explanation that contradicted Mr Fenech’s statement in Parliament. Lawrence Gonzi said the Opposition Leader was never entitled to an honorarium in the first place because he was not a government employee and his salary in fact included his honorarium already.
More recently, the Nationalist Party offered yet another explanation: “Dr Muscat has gone on record to say he doesn’t want the money. If he doesn’t want the money, isn’t it better it remains with the taxpayer rather than be used to subsidise the Labour Party?”
To clarify the matter, The Times sent fresh questions to the Office of the Prime Minister. This was the reply: “No money which is due to the Opposition Leader is being kept from him. The Prime Minister has already explained in Parliament the decision was reversed and the situation returned to the state of affairs of the previous legislature. In fact, the Prime Minister, ministers and parliamentary secretaries and the former Speaker are refunding the difference.
“The honorarium for MPs, including the Prime Minister, ministers and parliamentary secretaries, stands at 50 per cent of scale 1 while that of the Opposition Leader and the Speaker stand at 100 per cent of Scale 1.”
However, the Prime Minister, ministers and parliamentary secretaries did not go back to what they received in the previous legislature but were allowed to keep an honorarium of €19,100 and an increased duty allowance of 20 per cent of their pay (a raise totalling €500 a week – not €367 as the PN had said in January).
Question: Why was Speaker Michael Frendo placed on a different pay packet to that of his predecessor, Louis Galea, back in April 2010?
What happened?
According to the May 2008 Cabinet proposals, the Speaker’s salary – like that of the Opposition Leader – was meant to increase in three ways: his basic salary was meant to go up to 105 per cent of scale 1 from 100 per cent, his duty allowance was supposed to rise to 20 per cent of his salary (€8,031) from €2,329 and he was expected to receive an MP’s honorarium.
Dr Galea received such a pay packet, though it is as yet unclear whether he was given this package immediately – like the ministers – or at a later stage. But once he was succeeded by Dr Frendo – some eight months before controversy erupted over the pay rises as announced by Mr Fenech – the new Speaker was placed on the pre-2008 package of a basic salary of €38,245 and an allowance of €2,329.
Therefore, before ministers were told to refund part of their honorarium, the new Speaker had been denied his enhanced honorarium, increased duty allowance and higher basic salary.
In January, when ministers were asked to refund part of their honorarium, Dr Galea was asked to also refund the difference in his basic salary between 100 per cent and 105 per cent of scale 1. He was, however, allowed to keep his honorarium at the old rate and his fully increased duty allowance.
What is the government saying?
Contradicting the Finance Minister, the government now says Dr Frendo was never entitled to an honorarium or a duty allowance because he opted to keep his private practice.
This was never mentioned in the May 2008 Cabinet minutes published in January or in Mr Fenech’s parliamentary reply. The standard practice for a Speaker is to retain his private practice so it is unlikely the government would have made proposals based on the exceptional case of Dr Galea who opted to be a full-time Speaker. But even if this were the case, it does not explain why Dr Frendo was denied his increased basic salary from day one.
When asked, the government first said the Speaker’s package was among the items referred to the House Business Committee but were no agreement was reached. But Dr Frendo was appointed many months before the controversy, which, ultimately, ended up before the House Business Committee. So The Times asked the question again.
This was the reply: “Again, this is incorrect. Dr Frendo is receiving the same honorarium as Dr Galea.”
Here the Office of the Prime Minister is not referring to the MP’s honorarium but to the Speaker’s basic salary, which is “the same” because Dr Galea was asked to refund the difference he received between 105 per cent of scale 1 and 100 per cent.
The question remains: Why was Dr Frendo placed on the old scheme back in April 2010?
Asked whether it was constitutional to have such discrepancies between the pay packets of ministers and those of the Opposition Leader and the Speaker, the government spokesman said the Speaker and the Opposition Leader were not government employees and were not paid by the Treasury. He added that, unlike members of Cabinet, they were free to have a full- or part-time employment.
Other unexplained matters
The government has also not explained why it never said it had increased the duty allowance of political office holders by some €6,000. It insisted this was public in January when the Prime Minister tabled the Cabinet minutes in Parliament. At the time, The Times had asked whether this was a new allowance but the questions remained unanswered.
Nationalist MP Jean-Pierre Farrugia recently said government MPs had no way of knowing about the increased duty allowance because the old rate was never supplied.
Till today, the government has not submitted a clear breakdown of the exact current pay packages of political office holders and what they were like before the 2008 changes.