Parliamentary Remuneration (Determination of Remuneration) Amendment Bill

Second Reading

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (18:11): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech and explanation of clauses inserted into Hansard without my reading them.

Leave granted.

Currently, the remuneration payable to members of Parliament is determined under the Parliamentary Remuneration Act 1990 (the Act) and comprises:

the basic salary (equivalent to the basic annual salary of a Commonwealth member of Parliament minus $42,000)

if the member holds an office listed in the Schedule to the Act, additional salary equal to the percentage of the basic salary attaching to that office as specified in the Schedule; and

such allowances (including electoral allowances), expenses and benefits as are determined from time to time by the Remuneration Tribunal.

In addition to 'remuneration' within the meaning of the Act, members of Parliament receive a number of allowances, expenses and benefits (determined by Parliament or the Executive Government).

It is fair to say that the level remuneration payable to members of Parliament generates a degree of disquiet among voters. Members, even backbenchers, earn salaries well above the national average. We have access to generous travel entitlements and other benefits. Partly this disquiet stems from the way remuneration and other entitlements are determined. Although the Tribunal is responsible for determining some of the allowances, expenses and benefits, the public sees the current mechanism for determining the basic salary (and additional salary) as politicians setting our own pay.

Recent disclosure of the use of travel entitlements by some members of Parliament (both State and Federal) have, justifiably or not, fuelled public and media criticism of Parliamentary entitlements.

In response to this issue, His Excellency the Governor, in his speech to Parliament on 10 February this year, stated:

′...But if my government legislates to guarantee the independence of our parliament, it must also do more to ensure that it attracts the best and brightest hearts and minds committed to public service.

There is need to review the remuneration of members of parliament.

Recompense should reflect the high demands and great responsibilities of office but it should also be transparent and independently determined.

The Remuneration Tribunal will be asked to conduct a review of parliamentary remuneration.′

The Parliamentary Remuneration (Determination of Remuneration) Amendment Bill 2015 (the Bill) amends the Parliamentary Remuneration Act 1990 to give effect to this commitment. The main effect of the Bill is to confer new powers and functions on the Remuneration Tribunal and to change the way the 'basic salary' for members of Parliament is calculated.

New section 3B abolishes the following allowances, benefits and fees payable to members (and former members) of Parliament:

the travel allowance;

the metrocard special pass

remuneration consisting of subsidised or free interstate rail travel (colloquially referred to as the 'Gold Pass')

expense allowances of Ministers of the Crown as determined by the Tribunal

expense allowances of certain officers of the Parliament as determined by the Tribunal, being:

the Speaker

the Chairman of Committees

the Leader of the Opposition in the House of Assembly

the President

the Leader of the Opposition in the Legislative Council

In so far as it is relevant, former members of Parliament currently in receipt of benefits attaching to their former Parliamentary service will continue to be entitled to those benefits. The power of the Parliament or the Crown to provide allowances and other benefits that are in addition to a member's remuneration is not also affected.

The Bill confers new obligations, powers and functions on the Tribunal. This is to promote the transparency and independence and, as a result, integrity of the process.

New section 3A requires the Tribunal, in relation to an enquiry, determination or other function relating to the remuneration of members of Parliament, to endeavour to maximise the transparency of Parliamentary remuneration. The power of the Tribunal to determine difference allowances according to a particular member, their electorate, their House or other circumstances is retained.

New section 4AA requires the Tribunal to ascertain the full value of the travel allowance, metrocard special pass and remuneration amounts payable to members of Parliament in respect of subsidised or free interstate rail travel (colloquially referred to as the 'Gold Pass') that are abolished by new section 3B. The Tribunal is then required to determine an amount of remuneration that reasonably compensates members of Parliament for the abolition of each of those components.

New section 4AA also requires the Tribunal to determine an amount of remuneration to compensate members for the loss of payments for Parliamentary Committee work.

The amounts determined by the Tribunal in respect of each of these matters must be aggregated into a single amount representative of a common allowance to be payable to all members of Parliament. This amount cannot be more than $42,000, the current amount by which the Commonwealth basic salary exceeds the State basic salary. The components of this common allowance must be reviewed every 12 months.

New section 4AB provides that the basic salary is determined by deducting $42,000 from the Commonwealth basic salary and then adding an amount equivalent to the common allowance as determined by the Tribunal. In this way the Bill ensures the independent Tribunal has role in fixing the remuneration payable to members of Parliament but in a way that retains a nexus between the Commonwealth and State basic salaries.

The entitlement to additional salary for members of Parliament who hold an office specified in the Schedule (Premier, Deputy Premier, Speaker, President, ministers Leader and Deputy Leader of the Opposition etc.,) remains (with the exception of ordinary members of Parliamentary Committees). This is confirmed in new section 4AC. However, new section 4AC:

adds Shadow Minister to the list of offices in the Schedule and provides that additional salary of 25% of the basic salary is payable to Shadow Ministers (up to the number of Ministers);

empowers the Tribunal to determine that a member of Parliament holding an office other than those specified in the Schedule should be paid additional salary and determine that rate of additional salary;

makes clear that a member holding more than one Scheduled office is only entitled to payment of additional salary in respect of one office.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Parliamentary Remuneration Act 1990

4—Amendment of section 3—Interpretation

This clause inserts into section 3 of the principal Act definitions used in provisions inserted by the measure.

5—Insertion of sections 3A and 3B

This clause inserts new sections 3A and 3B into the principal Act as follows:

3A—Determinations etc of Remuneration Tribunal

This section sets out provisions conferring jurisdiction, and making procedural provision, in respect of determinations etc made by the Remuneration Tribunal for the purposes of the Act.

3B—Abolition of certain remuneration

This section lists a number of allowances and other forms of remuneration that are, following the commencement of the measure, no longer payable to members.

However, the clause grandfathers certain benefits payable to former members of Parliament to whom they were payable immediately before the commencement of the provision.

6—Substitution of section 4

This clause substitutes new sections 4 to 4AC for current section 4 of the principal Act as follows:

4—Remuneration

This section sets out the components of the remuneration of members of Parliament.

4AA—Common allowance

This section creates a common allowance, effectively consisting of the remuneration that was payable in common to all members and replacing some of the allowances etc that are abolished in accordance with new section 3B.

The common allowance also contains a component replacing fees for all members of parliamentary committees, which will no longer attract additional salary.

4AB—Basic salary

This section provides that the basic salary of a member of Parliament is the basic salary payable to Commonwealth members less $42,000 plus the common allowance for the relevant year.

4AC—Additional salary

This section sets out when additional salary is payable to the office holders specified in the Schedule, and makes related procedural provision.

7—Substitution of Schedule

This clause substitutes a new Schedule for the existing Schedule of offices, consequent upon the abolition of fees for ordinary committee members. It also includes the office of Shadow Minister in the list of offices.

Schedule 1—Transitional provisions

1—Remuneration under Parliamentary Remuneration Act 1990 to continue until determination of Remuneration Tribunal

This clause allows members to continue to be paid in accordance with the principal Act (as it was before this measure commenced) until any required determination of the Remuneration Tribunal has come into operation.

2—Certain annual travel allowance claims not payable

This clause limits members' ability to have future amounts of travel allowance brought forward in relation to claims and travel made on or after 1 September 2015.

Debate adjourned on motion of Hon. D.W. Ridgway.

At 18:12 the council adjourned until Tuesday 22 September 2015 at 14:15.