AM - Friday, 15 February , 2008 08:00:00 Reporter: Samantha Hawley TONY EASTLEY: Australiaís federal politicians last received a pay rise double that of inflation in July last year, but under Kevin Ruddís rules they wonít be getting another one until midway through 2009.



His move to freeze politiciansí salaries will no doubt go down well with voters, but itís causing some angst among those directly affected. The Government says itís setting a wage restraint example and it wants the corporate world to do likewise. Weíll hear more on that soon.



While the Opposition leader, Brendan Nelson, supports the move, others in the Coalition say itís a stunt and if Kevin Rudd was serious about curbing inflation he should also freeze the wages of Commonwealth public servants.



Samantha Hawley reports.



SAMANTHA HAWLEY: Year in year out federal politicians face questioning about their pay. Normally theyíre defending the latest pay rise. But last night as they filed out of Parliament House, the shoe was on the other foot.



MEMBER OF PARLIAMENT: I have no doubt that the Australian people will think itís a marvellous idea that weíre restricted from pay increases.



MEMBER OF PARLIAMENT 2: The pressures are real, and are very happy to put my shoulder to the wheel and do my bit in terms of showing some national leadership on this issue.



MEMBER OF PARLIAMENT 3: Yeah, I think itís the right thing.



SAMANTHA HAWLEY: The year long pay freeze announced by the Prime Minister Kevin Rudd applies to all parliamentarians. It could even affect some state and territory politicians.



The Opposition leader, Brendan Nelsonís issued his support for the move, but others in his party arenít so sure.



TONY ABBOTT: Well, I think itís a bit of a popular stunt.



SAMANTHA HAWLEY: Opposition frontbencher, Tony Abbott.



TONY ABBOTT: For Kevin Rudd to suggest that we should have a pay freeze but no-one else I think is just a popular stunt.



SAMANTHA HAWLEY: His colleague Joe Hockey agrees. He says if Kevin Rudd was serious heíd freeze the pay of a 100,000 Commonwealth public servants as well.



JOE HOCKEY: Obviously, if the Government is trying to set an example, it will extend the pay freeze beyond just the politicians to the people that actually do have an impact on economic management, and thatís the public service. But they wonít do that because this is all part of the stunt.



SAMANTHA HAWLEY: Most MPs and senators earn about $130,000 a year plus allowances. Government ministers earn more. Last year the independent Remuneration Tribunal granted them a pay rise of 6.8 per cent which was more than double inflation.



Ron McCallum, a professor in industrial law at the University of Sydney, says in many cases the wage rises are defendable.



RON MCCALLUM: We want to attract the best people into Parliament. We should ensure that they have appropriate wages for their status. I think one has to be careful about making these symbolic measures.



SAMANTHA HAWLEY: The Prime Minister says the Governmentís taking the lead at a time of high inflation. Heís urged big corporate companies to follow suit. But heís told Lateline applying the same principle to the average wage is not under consideration.



KEVIN RUDD: Iím not talking about a wage freeze at all. What Iím seeking to articulate is we at the level of political leadership understand that weíve got to lead by some example here, and Iíd call upon our friends in the corporate community, and Iím no enemy of free enterprise, Iíve worked as a businessman myself and my wife runs a business.



Itís just that itís important to exercise restraint in terms of their own salary asks in the year ahead.



TONY EASTLEY: The Prime Minister Kevin Rudd, ending Samantha Hawleyís report.