Linda Reynolds (WA, Liberal Party) Share this | Hansard source

We have option A—zero per cent—and we have option B, which is currently 1.5 per cent. The bill is very short and it is very clear, as has been confirmed by the speakers who preceded me. That is the first reason why it is a bad bill, because it will clearly reduce the salaries of ADF members.

The second reason I think this is a well-intentioned but bad bill is that under the bill the members of the ADF will have their pay assessed arbitrarily by the Minister for Defence under section 58B of the Defence Act. I argue for this reason alone that the entire premise of this bill is not correct. The Minister for Defence does not and should not make determinations on ADF pay. In fact, under the Defence Act the power is reserved specifically for the Defence Force Remuneration Tribunal—the DFRT—pursuant to section 58H(2)(a) of the Defence Act. Unlike what is said in the explanatory memorandum, the powers of the minister in relation to ADF remuneration of the Defence Act relate to determinations regarding conditions of service to ADF members other than salary—that is, not pay. In the past, these determinations have included housing benefits, relocation support, leave entitlements, the Abbott government's rollout of the National ADF Family Health Program and a range of other nonsalary related allowances.

In fact, the Hawke government, in the Defence Legislation Amendment Act 1984 established the Defence Force Remuneration Tribunal, which now comprises three independent members: the vice-president of Fair Work Australia, a person experienced in industrial relations matters and a person who has been a member of the ADF—a truly representative tribunal. This is a fundamental and critical fact that this bill has ignored and which I therefore believe actually renders it invalid. The DFRT determinations are to be made by already taking into account the special skills and capabilities required of ADF members and their unique employment circumstances. This bill, and the wording of it in relation to the tribunal and the minister would itself not only invalidate it but it would also effectively abolish the DFRT.

The third reason that this is a bad bill, well intentioned as it is, is that the definitions in it are far broader than just for the increase in pay rates. When you actually have a look at the Defence Act and you look at the tribunal details, it is very clear that this will not only apply to Defence pay but will also apply to all other meanings of 'salary'—all salary related payments and not just the base pay rate.

As I outlined in my speech on this bill, the proposed section 58ZC would introduce a mandatory formula into all Defence Force pay determinations, and not just those suggested in the bill. In making any salary determination the tribunal would need to include a calculation that converts any amount it decides upon into a percentage increase for the purposes of working out a minimum salary increase, using the new amount and rate of comparison as set out in the proposed new section 58ZC contained in this bill.

What does that actually mean? It is a bit bureaucratic and technical, but—