Democratic Labor Party senator John Madigan will give away his parliamentary pay increase to provide training equipment to school students.
The Victorian senator, who was elected to parliament in 2010, has said he was "gobsmacked" by a pay increase for federal MPs last year, which saw him earn an extra $50,000 per year.
Senator Madigan told Fairfax Media on Thursday, people were "doing it tough out there".
Senator John Madigan, DLP senator for Victoria, says that after taxes he will give away about $30,000. Photo: Rob Gunstone
"I was sort of gobsmacked at the pay rise, taking into account that the vast majority of Australians don't earn anything like $50,000 a year."
The former blacksmith said that after tax, he was left with about an extra $30,000. He wants to use the funds to buy Australian-made equipment for technical and agricultural schools, to encourage young people into trades, farming, food processing and engineering. Schools can apply for a grant online.
The DLP senator said he also wanted to "encourage our manufacturers not just with our words but with something tangible".
When asked if MPs were worth the money they were paid, Senator Madigan replied: "I believe most people would go into politics probably with the right intentions but with the major parties, they're in a machine."
He later added, "I think that's up to people to decide, the electorate. It's not up to John Madigan , it's not about John Madigan."
Since August 2011, the Remuneration Tribunal has had the responsibility for determining base pay for all members of parliament.
Last year, backbenchers' salaries increased twice - once by about $44,000 and again by $5,500 - taking their annual base salary to $190,550.
In March, 2012, MPs' pay was significantly increased in exchange for the abolition of other entitlements, such as travel perks. In July, the base salary was increased by 3 per cent.
Last year, Labor MP Ed Husic donated his $5500 payrise as a result to a food charity in his local western Sydney area.
Senator Madigan - a long-time champion of manufacturing - said that the announcement that Ford would close its plants in Geelong and Broadmeadows was a "devastating blow" for Australia.
"Once we can't manufacture a car in this country, this is going to have a massive flow-on effect."
Wow how thoughtful If only all politicians did the same