13:30 AEST Sat Oct 1 2011
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Federal MPs could soon be in line for an exceptionally generous pay boost, with backbench salaries tipped to almost double to around $250,000.
The Federal Remuneration Tribunal is currently looking at a major overhaul of the system, with politicians expected to trade allowances for bigger base pay packets.
Journalist and political commentator Laurie Oakes has told News Limited it could lead to rises of $110,000 for backbenchers, boosting their annual salary to around a quarter of a million dollars a year.
And the pay packets of Prime Minister Julia Gillard, her ministers and also shadow ministers could be a whole lot fatter.
Ms Gillard, who now earns $366,366 annually, could get as much as $650,000 under any new system while Opposition Leader Tony Abbott's could go up from $260,000 to almost $480,000.
All federal politicians currently receive lucrative office and travel entitlements.
But a review, led by former senior public servant Barbara Belcher, recommended earlier this year that the remuneration tribunal weigh up the value of politicians' work and decide whether MPs deserved a pay rise.
It said the tribunal should decide whether some types of positions - such as shadow ministers, who currently get no extra pay - deserve a higher pay bracket.
Legislation passed in June allowed the tribunal free reign to set the base pay of politicians.
Previously, the government was able to reject tribunal recommendations about pay increases.
On Friday the tribunal said it was conducting a comprehensive review of politicians' entitlements.
"As a first step ... the tribunal is conducting, with the assistance of a consultant, an assessment of the work of federal parliamentary backbenchers so as to establish, first, a defensible basis for assessing appropriate remuneration and, secondly, a benchmark for future assessments," it said in a statement.
Its initial report is expected by the end of the year.
Because of the legislation passed in June, the government would not be able to knock back any such increases, even if they were politically unpalatable.
Finance Minister Penny Wong said the issue of politicians' pay was always a difficult one.
But she said the bipartisan move earlier this year to give the decision to an independent tribunal was the right choice.
"I think it's much more sensible if these things are done independently rather than ending up in a sort of parliamentary debate," she said on Sky News.
"I don't know what the remuneration tribunal is proposing to do ... and I do think that's as it should be."
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