Updated 6 September 2018
PDF version [288KB]
Cathy
Madden and Deirdre McKeown
Politics
and Public Administration Section
Introduction
In 2017 the Turnbull Government introduced the
most extensive changes to parliamentary entitlements since the current system commenced
in 1990. The new legislative framework implements many of the recommendations
of the 2016 review An Independent
Parliamentary Entitlements Scheme.
This quick guide:
-
provides a brief overview of the legislative and administrative
changes to parliamentary business resources (as they are now known)
-
updates Parliamentary Library information showing the total
remuneration of members of Parliament, ministers and parliamentary office
holders following the Remuneration Tribunal’s decision to grant MPs a two per
cent pay rise from 1 July 2018 and
-
provides links to relevant resources, including Bills Digests and
other relevant Parliamentary Library publications, Bill homepages and Acts.
The Parliamentary
Business Resources Act 2017 and the Independent
Parliamentary Expenses Authority Act 2017 together provide
an overarching framework for members of parliament’s (MPs) business resources, but
much of the detail is outlined in determinations and regulations. The Parliamentary Business
Resources Regulations (PBR Regs), which came into effect from 1 January
2018, provide detailed information such as which activities are included under
parliamentary business, travel expenses, travel allowances and work expenses;
what public resources may be available to MPs; what an MP has to provide in
claiming public resources; and which parliamentary positions are eligible for
office holder salary.
Independent Parliamentary Expenses
Authority
On 13 January 2017 the then Prime Minister, Malcolm Turnbull,
announced
the establishment of an Independent Parliamentary Expenses Authority (IPEA).
He indicated that the United Kingdom’s (UK) approach would provide the model
for the new independent authority. The announcement came in response to a
controversy over MPs’ travel entitlements that culminated in the resignation of
the then Minister for Health, Sussan Ley, from that position.
As is discussed in a separate Parliamentary
Library FlagPost on the role and powers of the UK Independent Parliamentary
Standards Authority (IPSA), not only are the expenses schemes in Australia and
the UK very different, but ‘the UK IPSA model operates within a stronger
integrity regime in the UK Parliament—including a Parliamentary Commissioner
for Standards and codes of conduct for MPs—than that currently operating in the
federal Parliament’.
The Prime Minister introduced the Independent
Parliamentary Expenses Authority Bill 2017 on 9 February 2017, and
it was passed by both Houses of Parliament the same month. The Independent
Parliamentary Expenses Authority Act 2017 established the IPEA as an independent statutory authority. The
IPEA’s responsibilities include advising on, administering, and reporting on the
work resources and travel resources (travel expenses and travel allowances) of
members of parliament and staff employed under the Members of Parliament
(Staff) Act 1984. The functions remaining with the Department
of Finance (DoF) are described in DoF
circular 2017/09 as office accommodation and advice on and
administration of non-travel related expenses.
Since 1 July 2017, the IPEA has operated as a Commonwealth
statutory authority with Ms Jillian Segal appointed Chair of the IPEA.
Other members of the IPEA are Mr John Conde (President of the
Remuneration Tribunal); Mr Gary Gray; Dr Julianne Jaques and Mr Jeffrey Spender.
Ms Anwynn Godwin was appointed the inaugural Chief Executive Officer on 1
January 2018.
The new framework provides IPEA with the
ability to make rulings as to whether travel expenses and
allowances claimed by a parliamentarian are in accordance with the new
framework. The Authority also has the responsibility to audit MPs work
expenses (including those administered by DoF) and
MOPs travel expenses.
A penalty loading scheme applies where a
parliamentarian contravenes their obligations in respect of a travel or
non-travel related activity.
The IPEA is responsible for preparing and reporting on
MPs work expenses, and the expenses of former parliamentarians and surviving spouses or
de facto partners of former parliamentarians. These reports were previously
published by DoF on a bi-annual basis. Since January–March 2017 the reports have
been released publicly by IPEA on a quarterly basis.
A Parliamentary Library publication
on the IPEA legislation noted that the administration of
federal MPs’ pay and business resources will now involve the IPEA, the DoF, and
the Remuneration Tribunal (which will continue to determine MP’s pay and work
expenses). A June
2017 article featuring an interview with the former head of UK’s IPSA raised related
concerns, suggesting:
There is already considerable scepticism about the new agency
and what administrative reality will emerge in the months and years to come. If
IPEA simply adds another layer of legitimacy to dubious travel expenses that
still don’t sound right when people read about them in the news, it will have
achieved little.
Changes to the Life Gold Pass
The Government introduced the Parliamentary
Entitlements Legislation Amendment Bill 2017 on 9 February 2017, and
it was passed by both Houses of Parliament the same month. The Parliamentary
Entitlements Legislation Amendment Act 2017 ended access to the Life
Gold Pass scheme other than for former Prime Ministers and their spouses or de
facto partners. The Life Gold Pass scheme (now titled Parliamentary
Retirement Travel by virtue of the amending legislation) had provided
limited free domestic travel for eligible former members.
Parliamentary business resources
In his second
reading speech on the IPEA Bill (discussed above) the Prime Minister foreshadowed
that the Government would present ‘a further significant bill’ to the
Parliament which would ‘improve the legislative and administrative framework of
the ... work expenses framework—further encouraging transparency, accountability
and value for money’.
The Parliamentary
Business Resources Bill 2017 and the Parliamentary
Business Resources (Consequential and Transitional Provisions) Bill 2017
were both introduced into the House of Representatives on 30 March 2017.
The Bills received Royal Assent on 19 May 2017, and commenced 1
January 2018.
These Acts streamlined the framework into a single Act—the Parliamentary
Business Resources Act 2017 (PBR Act)—rather than the
eight that underpinned the previous scheme. The Parliamentary
Business Resources (Consequential and Transitional Provisions) Act 2017
(PBR (CTP) Act) repealed the Parliamentary Entitlements Act 1990 and
the Parliamentary Allowances Act 1952 and removed from other relevant
Acts those provisions relating to MPs remuneration and work expenses. For
example, while the Remuneration Tribunal is established by the Remuneration
Tribunal Act 1973, the authority for determining remuneration and
allowances for MPs is provided under the PBR Act (see below).
The Parliamentary Library’s Bills
Digest for the PBR and PBR (CTP) Bills noted that the legislation implements
a principles-based framework that delineates between parliamentarians’
remuneration and work expenses, as recommended by numerous reviews and audits. The
PBR Act:
-
introduces a ‘dominant purpose test’ as a purpose-based
eligibility criterion for all work expenses, allowances and other public
resources, which means that MPs can only use public resources for the dominant
purpose of conducting parliamentary business
-
defines ‘parliamentary business’ to include four streams:
parliamentary duties, electorate duties, party political duties and official
duties
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provides that MPs have to ensure value for money in incurring
expenses or claiming allowances or other public resources, and
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introduces new obligations on MPs to use public resources
appropriately, in good faith and ethically, and be accountable for their use.
Financial penalties will be able to be imposed for contravention of these
legislative requirements (as noted above).
The PBR (CTP) Act:
-
makes consequential amendments to the legislation governing the
IPEA to provide an additional function relating to rulings on travel resources,
and
-
provides transitional provisions to facilitate the move from the
existing scheme to the new scheme.
Former UK IPSA head, Andrew McDonald, has commented
on the dominant purpose test, suggesting that deciding the dominant purpose
of travel could be difficult in practice. McDonald has also noted that
consistency of the IPEA’s rulings could become an issue over time.
Along with the PBR Regs, the Minister has made
Determinations relating to activities that constitute parliamentary
business; which parliamentary positions are designated as an office holder;
and the resources for former prime
ministers.
Parliamentary remuneration
Under the PBR Act the Remuneration Tribunal has
to determine, at least once a year, the remuneration of current MPs, the rates
of travel allowance for domestic travel, and allowances and expenses for former
members. Under the PBR Act remuneration must include the base salary and
may include electorate allowance and office holder salary where applicable. The
Tribunal also determines the portion of salary that is not to be counted for
the purpose of calculating superannuation benefits under the Parliamentary
Contributory Superannuation Act 1948 for former members, office holders and
ministers.
The Tribunal is required to report once a year on
ministerial salaries provided for in section 66 of the Australian
Constitution. However, ministerial salary is ultimately a matter for
executive government: while the Remuneration Tribunal reports on
ministerial salary its recommendations are advisory only and Cabinet can vary
ministerial salary if it so wishes.
On 22 June 2017 the Remuneration Tribunal announced its
decision to increase remuneration by two per cent for public offices in its
jurisdiction, with effect from 1 July 2017. This includes the base salary of MPs.
In its June 2017 Statement, 2017
Review of remuneration for holders of public office, the Remuneration
Tribunal stated that this ‘represents an increase of 1.6 per cent per annum
over the 18 months since the last general increase decided by the Tribunal,
effective from 1 January 2016’.
Remuneration Tribunal Determination 2017/12
stated that the base salary of an MP would increase from $199,040 to $203,030
per annum from 1 July 2017.
On 23 June 2018 the Tribunal announced a two per cent
increase for public offices in its jurisdiction. The base salary for MPs increased
to $207,100 per annum from 1 July 2018. Office holder salary was not changed.
The Tribunal did not suggest any changes to ministerial
salary.
The separate appendix table to this quick guide, Remuneration
of members of parliament, parliamentary office holders and ministers of state,
provides the base salary for members of parliament, ministers and parliamentary
officer holders.
Sources and further reading
All hyperlinks are correct as at August 2018.
Acts and Bill homepages
Parliamentary Library publications
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C Madden and D McKeown, ‘Independent Parliamentary Expenses Authority’, FlagPost, Parliamentary Library blog, 7 February 2017.
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C Madden and D McKeown, ‘Independent Parliamentary Expenses Authority Bill 2017 and
Independent Parliamentary Expenses Authority (Consequential Amendments) Bill
2017’, FlagPost, Parliamentary Library blog, 14
February 2017.
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C Madden and D McKeown, Parliamentary Business Resources Bill 2017 [and] Parliamentary
Business Resources (Consequential and Transitional Provisions) Bill 2017, Bills digest, 97, 2016–17, Parliamentary Library, Canberra, 2017.
- C Madden, Parliamentary Entitlements Legislation Amendment Bill 2017, Bills digest, 62, 2016–17, Parliamentary Library, Canberra, 2017.
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C Madden and D McKeown, Parliamentary remuneration and entitlements: 2016 update, Research paper series, 2015–16, Parliamentary Library, Canberra,
2016.
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