Ministers' honoraria were paid as ‘allowances’ directly from ministry budgets

The OPM admitted this week with MaltaToday that ministers were paid out of an ‘allowance’ budget from their own ministries, and not from the budget allocated to the House of Representatives.

This led to an explosion in the OPM’s own budget, from €400,000 in allowances in 2007 to €650,000 in 2008, and then €1 million in 2009. From here, the prime minister and his two parliamentary secretaries were each paid €26,000 in the form of an honoraria and another €8,000 as duty allowance.

This means that when MaltaToday first revealed the unannounced Cabinet decision in November 2008, the OPM misleadingly told this newspaper the salary increase was due to ministers receiving an MP’s honoraria.

What was in effect a 50% salary raise was defended in parliament this week by Prime Minister Lawrence Gonzi, who said it was “unfair” that ministers lost their honorarium while other MPs earned salaries from public employment.

And while the Cabinet memo tabled in parliament indicates that the same changes had to apply to the Speaker and the Opposition leader, no such honoraria were ever legislated in parliament.

Which is why the finance ministry simply decided to pay out the alleged honoraria from the ‘allowances budget’ of each government ministry, and for two years never needed to legislate the increase, while MPs who voted on two successive budgets never knew they were effectively voting in favour of increased salaries.

The Speaker of the House has yet to reply to a letter from former Labour leader Alfred Sant, who is accusing the government of being in contempt of government. Sant said that while other parliaments had transparent processes and parliamentary resolutions to regulate salaries, while these never existed in Malta, Parliament “had never been treated in this way before”.

MPs are paid €19,000 in honoraria apart from other benefits. But previously civil servants were not allowed to continue in their employment if elected as MPs. When this anomaly was removed, in 2008 the Cabinet decided to pay ministers the MP’s honorarium they previously forfeited when appointed. They were however paid a €26,000 honorarium which other government MPs, it was revealed this week, were unaware of.

While MPs are still going to retain their €19,000 raise, they are now going to have to refund the extra €14,000 they cashed in over the past two years as part of Lawrence Gonzi’s damage-limitation exercise.

2008 ‘hush-hush’ decision

In November 2008, MaltaToday revealed that Lawrence Gonzi had given his ministers, parliamentary secretaries and himself a lavish pay rise of over 40% in a decision taken after March’s election.

The decision, which remained unannounced by the government, was incorrectly reported to have cost €14,966 extra for each of the eight ministers and six parliamentary secretaries. The increase turned out to be €26,000.

The increase was expected to stir controversy – it never did back then – at a time when the government was imposing tough measures on the people in the face of economic austerity. It contrasted with the meagre €4.08 cost of living adjustment given in the 2008 budget; today the COLA is a weekly €1.16.

A spokesman for the prime minister had defended the decision, justifying the ministers’ role as members of parliament as a separate job. “The discussion on the ministerial wage and MPs’ honorarium must be viewed within the context of the anomalies which were experienced in the past legislatures; wherein government employees that were elected to parliament could no longer retain their public employment, and wherein elected MPs that had been given a ministerial portfolio would have to forfeit their MP honorarium,” the spokesman had said.

MaltaToday's digital edition.