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Governor-General Amendment Bill 1995



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House: House of Representatives

Portfolio: Department of Prime Minister and Cabinet

Commencement: Royal Assent

+=5"> Purpose

This Bill amends the Governor- General Act 1974 (Cth) (the Principal Act) to alter the annual salary paid to the person appointed Governor- General after the present Governor- General from $95,000 to $58,000.

+=5"> Background

On 21 August 1995 the Prime Minister announced the approval of Her Majesty the Queen to the appointment of Sir William Deane AC KBE as the twenty- second Governor- General of the Commonwealth of Australia. Sir William will be sworn in as Governor- General on 16 February 1996. 1 Although the appointment is at the Queen's pleasure Sir William has agreed "that it would be appropriate for it to terminate on 31 December in the year 2000." 2This would accommodate any possible change to a republic and to the manner of filling the position of Australia's Head of State. 3

Sir William was sworn in as a Justice of the High Court of Australia on 27 July 1982. His resignation from the High Court will take effect from midnight on Friday 13 November 1995. 4

On his resignation from the High Court Sir William will be entitled to a life pension currently $71,000 (after tax) per year. A pension of a Justice of the High Court (who has served as a Judge for not less than 10 years) is set at 60% of the salary of a Justice of the High Court. 5 The salary of a Justice is currently $200,385 (gross) 6 and 60% of $200,385 is a pension of $120,231 - approximately $71,317 after tax. This pension is estimated to average $77,000 over the Governor- General's term in order to accommodate increases to the salaries of Justices of the High Court.

Sir William is entitled to receive this pension in addition to his salary as Governor- General however, he requested the Commonwealth Government arrange his pension to be offset against his salary as Governor- General. 7

Section 3 of the Constitution provides that the salary of a Governor- General can not be altered during the term of that Governor- General. Section 3 provides:

There shall be payable to the Queen out of the Consolidated Revenue

fund of the Commonwealth, for the salary of the Governor- General,

an annual sum which, until the Parliament otherwise provides,

shall be ten thousand pounds.

The salary of a Governor- General shall not be altered during his

continuance in office.

The Parliament has "otherwise provided" in relation to the salaries of Governors- General.

The Principal Act when enacted in 1974 set the salary at $30,000. 8

The Principal Act was subsequently amended to increase the salary in:

1977 to $37,000; 9

1982 to $70,000; 10 and

1988 to $95,000. 11

The Governor- General's salary is exempt from income tax 12and is generally set a marginal amount above the estimated average after tax salary of the Chief Justice of the High Court over the term of the proposed appointment of the Governor- General. 13 The present salary of the Chief Justice of the High Court is $220,431 14 (approximately $123,000 after tax). The estimated average (ie accommodating probable increases) after tax salary of the Chief Justice over the period of Sir William's appointment is $135,000. The combination of Sir William's pension (averaging $77,000) plus the salary component of $58,000 results in the annual salary for this term of the Governor- General being $135,000.

The Commonwealth Parliament has agreed to 3 principles in considering the Governor- General's salary, that it:

should be dealt with in a non party way;

the salary should recognise the importance and place of the office; and

the appointment of the Governor- General should not depend on personal wealth or availability of other income. 15

The Bill does not specify the Governor- General's salary after Sir William Deane's term as Governor- General. This would be dealt with in the normal manner by an amendment to the Principal Act prior to the swearing in of any subsequent Governor- General.

Main Provisions

Item 1 amends s.3 of the Principal Act by deleting the amount $95,000 and substituting the amount $58,000.

Item 2 provides that the alteration to the salary in s.3 does not have effect during the office of the person holding office as Governor- General before the commencement of this amending Act.

Endnotes

1. Prime Minister, Media Release, 21 August 1995.

2. ibid.

3. Prime Minister, "An Australian Republic The Way Forward", Hansard, House of Representatives, 7 June 1995, p.1434.

4. High Court of Australia, Media Statement, 29 August 1995. The date of effect of the resignation was determined by the Judge after consultation with the Chief Justice and the Attorney- General to enable the finalisation of all outstanding appeals while not unduly delaying the appointment of a new Justice.

5. Under s.6 of the Judges Pension Act 1963 (Cth).

6. Remuneration Tribunal Determination No.15, 25 August 1995.

7. The Age, 12 September 1995; The Canberra Times, 21 September 1995.

8. Hansard, House of Representatives, 9 April 1974, p.1249; Senate, 10 April 1974, p.879.

9. Hansard, House of Representatives, 20 October 1977, pp.2246, 2258; Senate,

1 November 1977, pp.1873, 2033.

10. Hansard, House of Representatives, 5 May 1982, pp.2307, 2085; Senate,

6 May 1982, pp.1942, 2425.

11. Hansard, House of Representatives, 23 August 1988, pp.192, 657; Senate,

1 September 1988, pp.654, 1297.

12. S.23(a)(i) Income Tax Assessment Act 1936 (Cth).

13. Hansard, House of Representatives, 23 August 1988, p.192, Senate,1 September 1988, p.654.

14. R emuneration Tribunal Determination No.15, 25 August 1995.

15. Mr Beazley, Hansard, House of Representatives, 23 August 1988, p.192; Mr Howard, House of Representatives, 31 August 1988, p.657; Senate, Senator Evans, 1 September 1988, p.654, Senator Messner, 12 October 1988, p.1297, Senator Macklin, 12 October 1988, p.1299.

Sarah O'Brien

Law and Public Administration Group

(06 277 2433)

Bills Digest Service

Parliamentary Research Service

26 September 1995

This Digest does not have any legal status. Other sources should be consulted to

determine whether this Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

Commonwealth of Australia 1995

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members and Senators of the Australian Parliament in the course of their official duties.