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Thursday, 23 June 2011
Page: 3806

Senator ARBIB (New South Wales—Minister for Sport, Minister for Indigenous Employment and Economic Development and Minister for Social Housing and Homelessness) (19:27): I thank Senator Fifield for his contribution. 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 the Department of Finance and Deregulation. 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 notes:

… existing arrangements are an extraordinarily complex plethora of entitlements containing myriad ambiguities.

The administration, clarification and streamlining of parliamentary entitlements is an ongoing and important task. The government will continue to seek to improve and make more transparent both the framework and the service delivery in this area. It is important work because it is critical to the enabling of members and senators in 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. This bill is an important initiative in the reform of that framework. The bill will restore the power of the independent Remuneration Tribunal to determine the base salary of parliamentarians. It will allow the tribunal to determine the remuneration and other terms and conditions of departmental secretaries and the remuneration and recreational 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. It will restore the power to set parliamentary base salaries to the independent Remuneration Tribunal, beyond the reach of any potential political interference. 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. As I have indicated, the government has agreed to the first recommendation of the report and is implementing it in this bill. The remaining recommendations of the report have been referred to the Remuneration Tribunal, which will provide advice to the government in due course.

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 by 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 parliamentarians' 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 parliamentarians' 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 Belcher review of parliamentary entitlements, which I referred to previously, also recommended that the government take preventative measures to ensure that any future folding-in of allowances did not provide a windfall retirement benefit to members of the scheme established under the Parliamentary Contributory Superannuation Act 1948. The government will be moving an amendment to the bill to implement these measures. 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. As I said earlier, a system that sees parliamentarians supported by an efficient, effective and transparent system of remuneration and entitlements, removed from political interference, will allow public servants to do their job better. The measures in this bill are an important step towards that goal.

Question agreed to.

Bill read a second time.