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Wednesday, 11 October 2006
Page: 247

Mr Kelvin Thomson asked the Prime Minister, in writing, on 4 September 2005:

(1)   Will the Determination he issued in August, which increases the total annual remuneration of departmental secretaries by 4.4 percent, lift the notional ‘base salary’ component of departmental secretaries’ remuneration by 14.4 percent; if so, will the 14.4 percent increase deliver (a) an increase in superannuation payments for departmental secretaries and (b) larger termination payments for departmental secretaries who lose their positions.

(2)   Does the Determination improve the formula for calculating the ‘loss of office’ benefit by including a minimum termination payout of three months base salary.

(3)   What is the reason for the increases delivered by the Determination.

Mr Howard (Prime Minister) —The answer to the honourable member’s question is as follows:

(1)   Yes to all parts.

(2)   Yes.

(3)   Base salary is used primarily for the purpose of calculating a secretary’s salary for superannuation purposes. As such, it should reflect the value of the cash component of a secretary’s remuneration package, as is the case for other public servants. The determination made on 4 August 2006 increased base salary from 73% of total remuneration to 80% of base salary as it was considered to be a more accurate reflection of the value of the cash salary available to secretaries. While this change will increase secretaries’ superannuation benefits on retirement, it will also increase their notional superannuation contributions by around $4,000 a year, resulting in an immediate reduction of the same amount in their take home pay. As required by subsection 61(2) of the Public Service Act 1999, I consulted the Remuneration Tribunal before making the determination in question. The Tribunal supported the proposed amendment. The Tribunal also agreed that it would be appropriate to change the arrangements applying to secretaries who are terminated before their appointments expire so that they would be entitled to a minimum termination payment of three months’ base salary. The Tribunal noted that the holders of public offices in its jurisdiction are entitled to a minimum of four months’ base salary in similar circumstances.