Involuntary acts of generosity
“We are the best value MPs in Europe,” says Gerhard Hess of the Swiss Democrats. Swiss parliamentarians – MPs and senators, are unique in Europe, if not the world, in that they do not receive a salary. This means that while Swiss workers as a whole are among the most expensive in Europe, their parliamentarians are among the cheapest.
But, as we know, cheap does not necessarily mean good value.
The idea of a ‘Berufsparlament’ - literally professional parliament - is entirely at odds with the Swiss psyche. It is not just Switzerland’s parliamentarians that fall into the voluntary service category. The army and fire brigade are further examples of professions that provide their services voluntarily.
The reason given is the ‘Milizgedanke’ – a philosophy of voluntary service which runs to the core of Swiss society and which has deep historical roots. “We never had kings or lords,” says Bruno Frick, speaker of the Council of State of the Swiss senate. “The Swiss have been used to ruling themselves.”
The tradition of rule by the people manifests itself in the fact that all new laws are subject to a referendum. “People would reject the idea of paid MPs,” says Beat Waber at the Neue Zürcher Zeitung. “People take the view that the combination of a profession and parliamentary service ensures that parliamentarians are in touch with reality and know what’s going on in the outside world.”
In fact, while Switzerland’s parliamentarians are not paid a salary as such, a system of allowances means that they are compensated for their time. Daily attendance allowances
are the main element of this and last year MPs received on average CHF70,554 (E45,930); senators around CHF74,000. And even though this amount is an allowance, it is taxed as normal income. The idea is based on the principle that half of an MP’s time will be spent in parliament so that the remaining time is available for earning a living. “This is considered the employer’s contribution to the national good,” says Frick.
Furthermore, pension provision is left to the employer. After all, pensions are based on salary, and as there is no parliamentary salary, there is no formal parliamentary pension. In its infinite generosity, however, the Swiss state makes an annual contribution of just over CHF9,000 to each MP and senator to put towards a private pension arrangement.
The Swiss political system is characterised by a strict division between the legislative function which encompasses the upper and lower houses of parliament, and the executive function which comprises the members of government. It is only the members of the government – seven of them in total – who have the luxury of a full-time job in which to perform their duties, and as such it is deemed appropriate to pay them a salary. Indeed, it compares well with their ministerial counterparts elsewhere. Not only that – they also receive a pension (see box).
There is a feeling that the increasing pressure of political life is putting strain on an MP’s capacity to make a living at the same time. Waber notes: “The workload of MPs is increasing, which ever more gives rise to the question: can I afford to become an MP? Is it possible to combine political life with a profession? The increasing workload also means that the system favours better-paid professions.”
MP Gerhard Hess of the Schweizer Demokraten is a case in point: He notes: “I spend 70-80% of my time on parliamentary matters. Due to financial considerations I had to think long and hard about whether I wanted to continue as an MP after my first term of office. I had to tighten my belt.”
He explains the dilemma: “If you are on the board of even a small bank you would get CHF1,000 per day whereas only CHF400 is paid for a day’s attendance at parliament. So do I go to the parliament or to the bank? I think MPs should earn the same as the director of a bank – enough to live on comfortably. It would be better if we were in a position to concentrate 100% on the job of being an MP.”
He adds: “Small parties need to spend more time per head on administration, so they are not favoured in this system and democracy suffers.”
Democracy is at the heart of any discussion about parliamentary pay, and nowhere more so than in Switzerland. “I have been in this field for 25 years and in that time have seen a significant deterioration in the quality of our MPs,” says Werner Nussbaum of the Pensions Education Centre in Bern. “We can see it in the quality of thinking and the quality of legislation; if MPs were paid adequately the quality would improve. Furthermore, MPs should have the resources to hire an assistant to look in detail at things like scientific research. As it stands there are no checks and balances. Polls show that distrust of MPs is increasing among the public – they are seen as lacking the necessary time, training and support. It is tragic but true.”
The most serious concern to arise from the voluntary system is that of bribery. “The fact that MPs are so poorly paid means that there is a risk of corruption or at least a lack of transparency,” Nussbaum says. “We may wonder how much money an MP might have received to press a certain opinion in parliament. It definitely happens that money flows into political lobbying – it is not against the law but it is neither transparent nor democratic. I could understand several Swiss MPs taking a bribe because they are so poorly paid.”
Comparison with other parliaments in Europe does not help the movement for change in Switzerland. By European standards parliamentary attendance in Switzerland is good, with an average of 170 out of 200 MPs per sitting. “MEPs are very well paid but their attendance is very poor,” says Hess. “The same is true in Germany. Part of the discussion in Switzerland is that the people view that as waste and don’t want to see the same happening here.”
But in spite of this there are those that believe that things may change with time. Nussbaum is one such optimist. “There is a tradition of voluntary service in Switzerland, but traditions are not necessarily permanent,” he says. “They may change their minds when people see how much work and responsibility is involved and when they learn that the head of Novartis earns CHF21m. But there must be good communication.”
He continues: “I believe that on the level of the federal parliament, in the medium term, there will be measures to introduce a payment that is appropriate given the amount of work and risk involved and the need to guarantee a certain level of quality and independence. I hope that this will also reduce the impact of influence and lobbying. The politicians know that the system needs to be changed but don’t have the will to do so.”
Currently the seven members of the Swiss government receive an income of CHF404,971 (e262,263) which is pegged to that of a senior magistrate. This places it well above many ministerial salaries elsewhere in Europe.
The pension scheme is of the pay-as-you-go variety and is non-contributory. The full pension is one half of the salary of a serving member of government and is increased in line with members’ salaries.
A member must serve a minimum of four years or leave the government on health grounds. The average length of service is between eight and nine years.
If a former member of government receives an income that, together with the pension, exceeds the salary of a serving member of government, the pension will be reduced by that amount. The rationale is that a former member should not, through receipt of state funds, earn more than a member of the government. Pension rights accumulated elsewhere have no impact on rights to the government ministers pension.
There are only 12 former members of government who now receive a pension. Last year the cost of pension payments was CHF11.5m.