Mr GRAY (Special Minister of State and Special Minister of State for the Public Service and Integrity) (10:58 AM) —I move:

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.