Thursday, 24 March 2011
Remuneration and Other Legislation Amendment Bill 2011
That this bill be now read a second time.
Mr Speaker, the problems with the current parliamentary entitlements framework have been clearly documented.
The Australian National Audit Office in its 2009-10 report Administration of parliamentarians’ entitlements by the Department of Finance and Deregulation noted that the entitlements framework is ‘difficult to understand and manage for both parliamentarians and Finance’.
The report of the committee for the Review of Parliamentary Entitlements, known as the Belcher review, established in response to the ANAO’s report, similarly noted that the ‘existing arrangements are an extraordinarily complex plethora of entitlements containing myriad ambiguities’.
The Department of Finance and Deregulation recently engaged Ms Helen Williams AO, a former secretary of a number of Commonwealth departments, and former Public Service Commissioner, to review the administration of entitlements by the Ministerial and Parliamentary Services Division of the Department of Finance and Deregulation.
Ms Williams reported to the department in February 2011. Her review found that greater client focus and more effective administration by the department would be facilitated by a clearer and more integrated entitlements framework.
The administration, clarification and streamlining of parliamentary entitlements is an ongoing task that occupies a substantial part of my working life in this place, and I will continue to seek to improve, and make more transparent, both the framework and service delivery in this area.
It is important work, because it is critical to the enabling of members and senators—how we do our work representing our constituents in our system of representative democracy.
Parliamentarians that are supported by an effective, efficient and transparent system of remuneration and entitlements will do their jobs better. I am pleased today to announce an important initiative in the reform of the framework.
The bill I am introducing today will restore the power of the Remuneration Tribunal to determine the base salary of parliamentarians.
It will also allow the tribunal to determine the remuneration and other terms and conditions of departmental secretaries and the remuneration and recreation leave entitlements of other offices established under the Public Service Act 1999.
In restoring the tribunal’s power to determine the base salary of parliamentarians, the bill will implement the cornerstone recommendation in the report of the Committee for the Review of Parliamentary Entitlements.
The independent review committee was chaired by Ms Barbara Belcher AM, and comprised the current President of the Remuneration Tribunal, Mr John Conde AO, the current Dean of the Australia and New Zealand School of Government and former Commissioner of the Australian Competition and Consumer Commission, Professor Allan Fels AO, and Deputy Secretary of the Department of Finance and Deregulation, Ms Jan Mason. I thank them for their work.
The committee made a range of recommendations around parliamentary entitlements. The government has agreed to the cornerstone recommendation of the review. This bill implements this recommendation and by doing so will provide more transparency and—importantly—independence in the determination of parliamentarians’ base salary.
I now table a copy of the committee’s report for the information of members, and the public. As I have indicated, the government has agreed to the first recommendation of the report and is implementing it in this bill. I trust that the release of the report will be an important contribution to the broader task of reform of parliamentary entitlements.
Parliamentarians have been remunerated for their service to the Commonwealth parliament since Federation. Pay was initially set by the Constitution and then by the parliament itself, under the auspices of the Constitution.
With the enactment of the Remuneration Tribunal Act in 1973, the Remuneration Tribunal became responsible for setting parliamentarians’ base salary. However, the tribunal’s authority to determine parliamentarians’ base salary was removed by the Remuneration and Allowances Act 1990.
The bill restores the Remuneration Tribunal’s role of conclusively determining parliamentary base salary. This change will enable parliamentary base salary to be determined in its own right, rather than the current arrangement, where it is set by reference to a figure determined for another purpose, and a matter for decision by the government of the day.
The current situation has resulted in outcomes on parliamentarian’s salaries being determined by political considerations, to the detriment of considered and informed decision making on appropriate remuneration.
The government notes that Remuneration Tribunal determinations on parliamentarians’ remuneration were disallowed or varied by legislation in 1975, 1979, 1981, 1982, 1986 and 1990, prior to the passage of the Remuneration and Allowances Act 1990. Since this enactment, parliamentary base salaries have been determined by the executive arm of government.
The pre-1990 situation—where determinations were subject to regular disallowance—was also unsatisfactory. It was also inconsistent with the independent nature of the tribunal.
Accordingly, the government has decided that—in addition to the restoration of the Remuneration Tribunal’s power to determine parliamentarian’s base salaries—the tribunal’s determinations of parliamentary remuneration will, in future, not be disallowable.
This will reinforce the independence of the tribunal and ensure the integrity of the scheme for determining the remuneration of parliamentarians by removing—to the greatest extent possible—opportunities for intervention in the implementation of the tribunal’s determinations by the beneficiaries of those determinations.
The Remuneration Tribunal will continue to determine the additional salaries of parliamentary office holders, such as the President of the Senate and the Speaker of the House of Representatives, and provide advice to the government on the additional salaries of ministers and members of the executive.
To ensure openness and transparency of the Remuneration Tribunal’s decision making, the tribunal will be required to make its decisions public and publish reasons for them.
The bill also contains amendments to the Remuneration Tribunal Act 1973, and consequential amendments to the Public Service Act 1999, to make the Remuneration Tribunal responsible for determining a classification structure for departmental secretaries and related matters, which may include pay points and guidelines on the operation of the structure.
Those amendments implement the government’s 2007 election commitment to make the Remuneration Tribunal responsible for determining the remuneration of departmental secretaries and other public office holders under the Public Service Act 1999.
The Remuneration Tribunal will also be responsible for determining the classification to which each office of departmental secretary will be assigned and for determining the full range of departmental secretaries’ terms and conditions.
The Remuneration Tribunal would determine the amount of remuneration that is to be paid to the Secretary of the Department of the Prime Minister and Cabinet and the Secretary of the Treasury.
The Secretary of the Department of the Prime Minister and Cabinet would, in consultation with the president of the tribunal and the Public Service Commissioner, assign all other departmental secretaries to an amount of remuneration consistent with the classification structure determined by the Remuneration Tribunal.
As is the case currently with determinations made by the Prime Minister, the Remuneration Tribunal’s determinations of the remuneration and other conditions of departmental secretaries would not be subject to disallowance.
Consistent with these changes and the 2007 election commitment referred to above, the bill will also give the Remuneration Tribunal responsibility for determining the remuneration and recreation leave entitlements of the Public Service Commissioner, the Merit Protection Commissioner and the heads of executive agencies created under the Public Service Act.
The measures contained in this bill restore independence and transparency to the remuneration of parliamentarians, departmental secretaries, and the other office holders I have mentioned.
I commend the bill to the House.
Leave granted for second reading debate to continue immediately.
I thank the minister for outlining the history of the tribunal in such a detailed fashion and the history of the attempts over the years to make the process of determining the salaries of members and senators of the parliament more transparent. He has outlined where such attempts have failed in previous years and has brought forward this bill which will give true independence to the tribunal.
I think many people would remember the headlines which often appear in the papers after a determination that members of parliament vote upon their own payment. I think the idea that we have a tribunal that is free of political process to make these determinations is a fair way to go, and an improvement on the current system. It is quite interesting for people to realise that members and senators are not employees in the sense that people normally understand that term. For instance, there are no holidays for members and senators. There is no long service leave, no workers compensation and no penalty rates. There is none of the entitlements that employees in the ordinary sense think of as being part of their remuneration. So the way the tribunal will go about its business will be to take all those things into consideration when it makes its determinations, and do that in a way that does not have any political connotations.
I think it is also important to note that this bill is restoring the situation where the determination of the tribunal will no longer be subject to tabling and disallowance. It is also interesting to note that a new system will be invoked under the Public Service Act for the determination of the classification of departmental secretaries and that special provisions will be made for the tribunal to deal with the Secretary of the Department of Prime Minister and Cabinet and the Secretary of the Treasury.
I think there is always an important nexus between the remuneration of members and senators and the remuneration of the Public Service. I have recollections of situations where you could end up as a minister, and the secretary of your department was being paid an enormous amount more than you—yet your head was on the line every day. Be that as it may, I think it is appropriate that the tribunal has responsibility in that way. Again, that will not be subject to a disallowance motion.
The opposition is in support of the bill. I think it is a framework that has been outlined very thoroughly and in good detail by the minister. There is no need for me to go through the facts as he has put them on the record. I simply say that I think he has done that well. We will, indeed, be supporting the legislation.
We are going to see the Belcher report. There has been much speculation and anticipation about what might be in there, how it might impact and the like. It will now become a public document and it will be considered, over a period of time, to determine what recommendations may be the right ones to enhance, in the words of the minister, the job that members and senators do for their constituents.
In this place we very often use words as people used to use swords or other fighting implements; we represent opposing points of views on so many things. It is necessary for us to stand up for those beliefs but it is also a most important part of our task that we look after the constituencies that we are elected to represent under our representative form of government. There is a degree and variety of work that members and senators have to deal with. Members, in particular, can run the full gamut of every issue that is relevant to anyone in their constituency. The issues can run from social welfare and taxation matters through to immigration matters. There can be complex issues dealing with legislation and there can be negotiations to take part in. The tribunal views all those aspects and says, ‘Here is an efficient system which will enable you to be the servants of the people,’ in the way that we believe that all of us should. I say that about each member and senator in this parliament. I know that all members in this House carry a heavy constituency load and have the interests of their constituents at heart. I see that this bill is adding to our ability to give that service as it should be given. In concluding my remarks I simply say that we will be supporting the bill.
I am pleased to speak to this bill today. The discussion that we have heard from both the minister and the shadow minister indicates that there has been a fairly long-lasting problem in relation t the determination of salaries and other aspects of political life. Independents, historically, have argued for greater transparency in terms of the way remuneration and other entitlements are granted to parliamentary office holders and others that come under the auspices of the Remuneration Tribunal. This bill is an important step forward in terms of creating that transparency and independence in terms of the way salaries and other entitlements are dealt with into the future.
I am pleased that the Belcher report will be available for members and the general public to look at, because there are a number of issues that have been outstanding for many years that both parliamentarians and the public have views on. We will have the debate that we have probably needed to have for many years as to the value of office holders, the work that they do in the community and in the parliament, and how that should be properly assessed and the value placed on it. So I support the general thrust of today’s bill that the Remuneration Tribunal be, in a sense, independent of the parliament in its capacity to determine base parliamentary salaries.
I also support the need for a wider discussion to take place, and I hope a number of these things are in the Belcher report—and I am fairly certain they will be—as to the benefits that parliamentarians receive when they leave the parliament. We need a wider ranging debate on such things as the Gold Card, which consumes an enormous amount of money for parliamentarians who do not serve the community any more, who have left the building. And if we are having a serious look at the value of parliamentarians in terms of their salaries and entitlements, we do need to have a serious look at the value and entitlements that others receive after they leave the parliament.
I would encourage all members of parliament, and the general public and the press, to have a close look at what is being suggested in the Belcher review. I have been looking forward to having a very close look at it myself. I do hope that there is a wider ranging debate than the one that has been put forward today. But I do support the general concept, and have for many years, that the determination of the worth of parliamentarians—their base salaries and the salaries of the various officers of the shadow ministers, ministers et cetera—should be independent, totally, of the capacity of the parliament to have any influence. So the reference to the tribunal to have that determination take place independently and transparently to the parliament is a good step forward and I would hope that the community would see it in that light as well.
I first saw the Remuneration and Other Legislation Amendment Bill 2011 when it was introduced a little over a half an hour ago, and for the first time in the 43rd Parliament we have had a bill that has been introduced and debated on the same day, as far as I am aware. I am concerned that the process of introducing and debating a bill on the same day removes our capacity as members to consider the provisions of the bill in any meaningful way. I do accept and thank the minister for having kept us up to date with his intentions in this regard over previous weeks, but that is a different thing to actually being able to consider the bill and its implications.
When it comes to the matter of politicians’ remuneration, that is, in my view, an instance where there should be the maximum transparency and opportunity for debate and opportunity to consider the implications of what this parliament is going to decide—especially when the thrust of the bill is to remove from this place, from the parliament, the ability to have any meaningful oversight on politicians’ remuneration. So I have grave concerns about the process and I do hope it does not set any sort of precedent for future debates. I am concerned that, when a higher standard perhaps should be applying in an area where there has been and continues to be public cynicism about the motives of politicians, there should be more debate about it rather than less.
I understand there are a number of particular areas that the Belcher report has proposed that do cause concern. One, for example, is with respect to the electorate allowance. I and other members of the Greens use our electorate allowances in the electorate. It is used for a variety of very important community functions, and we are concerned at the prospect of a tribunal now deciding that that might be rolled into base pay, without a proper case being made for that and without this place and the Senate having had a full opportunity to decide whether or not that is in fact a valid and appropriate thing to do.
On the matter of principle about whether or not a tribunal should be able to do something separately from parliament and parliament not having the ability to disallow it, the Greens do not support removing the role of the parliament in relation to tribunal determinations. Transparency and accountability demand that the parliament maintain oversight of such matters. Given that the Belcher review has only just be made available and that we are being asked to vote on this matter now, we do not have the opportunity to properly consider the rationale for removing the role of parliament in this way. I understand that we are in a distinct minority, but at this moment we are not in a position, especially given such short notice, to support the bill at this stage. We will engage more fully on it when it comes to the Senate, but it is of grave concern that such an important matter is being put through so quickly.
in reply—I thank all of those who have contributed to the debate on the Remuneration and Other Legislation Amendment Bill 2011. In particular, I thank the member for Melbourne for his observations. I would like to say that the philosophy that underpins this bill is that the beneficiaries of remuneration decisions should not be the determiners of those decisions, and therefore the government stands by its commitment in this bill to provide an independent process. I thank the member for his contribution and I make the assumption that further discussion and debate will occur on this matter in the other place.
This bill will restore the power of the Remuneration Tribunal to determine the base salary of parliamentarians. It will also allow the tribunal to determine the remuneration and other terms and conditions of departmental secretaries and the remuneration and recreation leave entitlements of other officers established under the Public Service Act 1999. In restoring the tribunal’s power to determine the base salary of parliamentarians the bill will implement the cornerstone recommendation in the report of the Committee for the Review of Parliamentary Entitlements. This will provide more transparency and, importantly, independence in the determination of parliamentary base salaries.
I have tabled a copy of the committee’s report for the information of members and the public. The report is an important contribution to the broader task of reform of the system of parliamentary remuneration and allowances. The bill also provides that, in addition to the restoration of the Remuneration Tribunal’s power to determine parliamentarians’ base salaries, that tribunal’s determination of parliamentary remuneration will in future not be disallowable. This will reinforce the independence of the tribunal and ensure the integrity of the scheme for determining the remuneration of parliamentarians by removing, to the greatest extent possible, opportunities for intervention in the implementation of the tribunal’s determinations by the beneficiaries of these determinations. To ensure openness and transparency of the Remuneration Tribunal’s decision making, the tribunal will be required to make its decisions public and publish reasons for them.
The bill also contains amendments to the Remuneration Tribunal Act 1973 and consequential amendments to the Public Service Act 1999 to make the Remuneration Tribunal responsible for determining the classification structure for departmental secretaries and related matters, which may include pay points and guidelines on the operation of the structure. These amendments implement the government’s 2007 election commitment in this regard. As is the case currently with determinations made by the Prime Minister, the Remuneration Tribunal’s determinations of the remuneration and other conditions of departmental secretaries would not be subject to disallowance.
The measures contained in this bill restore independence and transparency to the remuneration of parliamentarians, departmental secretaries and other office holders that I have mentioned. As I said earlier, the system that sees parliamentarians supported by an efficient, effective and transparent system of remuneration and entitlements will allow them to better do their jobs. The measures in this bill are an important step towards that goal. I commend the bill to the House.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.