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Thursday, 9 February 2012
Page: 552


Senator LUNDY (Australian Capital TerritoryParliamentary Secretary to the Prime Minister and Parliamentary Secretary for Immigration and Multicultural Affairs) (13:05): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

MEMBERS OF PARLIAMENT (LIFE GOLD PASS) AND OTHER LEGISLATION AMENDMENT BILL 2012

This bill represents the next stage in the government's reforms to the parliamentary entitlements framework. The reforms to the framework are aimed at ensuring that members of Parliament are supported by an effective, efficient and transparent system of remuneration and entitlements.

On 15 December 2011, I announced that the government had accepted the recommendations of the independent Remuneration Tribunal (the Tribunal) in relation to the Life Gold Pass. The Tribunal recommended in the initial report of its review into parliamentarians' remuneration released last December, that the Life Gold Pass scheme be closed prospectively and that the entitlement of existing Life Gold Pass holders be reduced now from 25 to 10 domestic trips per financial year.

In its report, the Committee for the Review of Parliamentary Entitlements (the Belcher Committee) indicated that current Life Gold Pass holders should be permitted to retain a reduced entitlement to travel on the basis that former and current Senators and Members entered the Parliament with the understanding that post-retirement travel formed part of their benefits. The Belcher Committee also recommended that the current entitlement of Life Gold Pass be reduced from 25 to 10 domestic return trips per financial year.

The Life Gold Pass has a long history. The provision of travel benefits to sitting and retired Senators and Members, through issue of a Life Gold Pass, commenced on a limited basis in 1918 in the form of a Life Railway Pass and this was extended to include unlimited air travel in 1959. In 1973, an executive decision extended Life Gold Pass benefits to spouses and widows of Life Gold Pass holders.

In 2002, legislation was enacted to limit the number of return domestic trips available to Life Gold Pass holders, their spouses and widows. However, limiting the number of trips provided for all entitlees has not prevented ongoing criticism of the Life Gold Pass scheme on the grounds that its provisions exceed community standards.

Schedule 1 of this bill proposes to close the Life Gold Pass scheme prospectively so that a member who enters, or re-enters, the Parliament from the commencement of the bill will not be able to accrue an entitlement to a Life Gold Pass.

Sitting Senators and Members will remain eligible to accrue an entitlement to a Life Gold Pass where they serve the remainder of their relevant qualifying period prior to leaving the Parliament. A sitting Senator or Member who ceases to be a member of their house, and who becomes a member of the other chamber within three months will be regarded as having had continuous service in the Parliament and will continue to be eligible for a Life Gold Pass.

In line with the recommendations of the Tribunal and the Belcher Committee, the bill proposes to amend the Life Gold Pass Act to reduce the travel entitlement of existing Life Gold Pass holders, who have never held office as Prime Minister, and their spouses or de facto partners, from 25 to 10 domestic return trips per financial year from the 2012 13 financial year.

In my announcement of 15 December 2011, I acknowledged that some former members use the Life Gold Pass travel entitlement for the benefit of the community. However, I also acknowle­dged that there has been inappropriate use of the entitlement. The proposed reduction in the entitlement will constrain inappropriate use.

As the Tribunal recommended that the entitlement for Life Gold Pass travel be reduced now, the bill includes a transitional provision which limits the number of domestic return trips for the remainder of 2011 12 to a maximum of two. The transitional provision will apply from the later of the day on which the bill receives the Royal Assent or 1 April 2012.

The closure of the Life Gold Pass scheme to new members and the reduced entitlement will contribute to a more transparent and, in the end, a more simplified parliamentary entitlements framework.

Further, the Bill proposes changes to the Remuneration Tribunal Act 1973 and to the Parliamentary Contributory Superannuation Act 1948 (1948 Act) to allow the Tribunal to limit windfall gains flowing to superannuation benefits for current and former parliamentarians from increases in additional office salaries.

Ministers of State and parliamentary office holders receive additional salaries as a percentage of parliamentary base salary. Any increase in the parliamentary base salary determined by the Tribunal, would flow to Ministers of State and parliamentary office holders.

Additional pensions paid to members of the superannuation scheme under the 1948 Act are linked to the additional salaries paid to parliamentary office holders and Ministers of State. Accordingly, any increase in additional salaries would create a windfall gain in relation to the superannuation benefits for current and retired Ministers or parliamentary office holders who are members of the 1948 scheme.

In its initial report, the Tribunal requested that the Parliament grant the Tribunal power to determine portions of additional salaries paid to Ministers of State and parliamentary office holders that would not be included in calculating superannuation benefits paid to members of the 1948 Act scheme.

This is consistent with provisions in the Remuneration and Other Legislation Amendment Act 2011 which allow the Tribunal to determine a portion of any increase in parliamentary base salary which does not flow to the superannuation benefits of current and retired members of the 1948 scheme.

I announced on 15 December 2011 that the government would implement this recommend­ation of the independent Remuneration Tribunal. Schedule 2 of this Bill proposes the necessary amendments to the Remuneration Tribunal Act 1973, with consequential amendments to the Parliamentary Contributory Superannuation Act 1948, to implement the Tribunal's recommendation.

Debate adjourned.