Posted 12/08/2015 by Cathy Madden
It has been reported that former federal Members of Parliament have lodged a challenge in the High Court to recent legislative changes that reduced their entitlement to the ‘Life Gold Pass’ post-retirement travel benefit and reduced their benefits under the Parliamentary Contributory Superannuation Scheme. The entitlement of parliamentarians to the ‘Life Gold Pass’ (LGP) has been in operation since 1918. The LGP and severance travel are post-retirement travel benefits currently available to parliamentarians. Retirement travel is governed by Acts of Parliament, determinations of the Remuneration Tribunal, procedural rules, and decisions of the Executive.
In 2002 the LGP entitlement was codified as the Members of Parliament (Life Gold Pass) Act 2002 which set out the entitlements for retired parliamentarians who satisfied the qualifying periods determined by the Remuneration Tribunal. The Remuneration Tribunal determines only the qualifying period for the LGP. The codified LGP entitled eligible former parliamentarians to travel within Australia at government expense for their lifetime (but not to overseas travel), with caps placed on the number of flights per year—25 for eligible former members and 40 for prime ministers. The entitlement included certain benefits for the spouse or de facto partner of a former eligible member or prime minister.
The 2010 Committee for the Review Parliamentary Entitlements (Belcher review) report and the Remuneration Tribunal’s 2011 initial report into work assessment of the remuneration of members of parliament both recommended reducing the benefit and closing the scheme prospectively to new members.
In 2012, the then Labor government legislated to implement these recommendations. The Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 closed the scheme off to new members effective from 6 March 2012 and reduced the number of domestic return trips, from 25 to 10, that eligible members and their spouse or de facto partner were entitled to undertake.
The Association of Former Members of the Parliament of Australia (AFMPA) raised a number of concerns in their submission to a Senate Finance and Public Administration Legislation Committee (SFPALC) inquiry into the 2012 legislation, concluding that a 'reduction in existing benefits is unjustified'. Following enactment of the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 the AFMPA raised the possibility of seeking legal compensation for the loss of the entitlement.
More recently, as part of the 2014–15 Budget, the Abbott Coalition Government announced that, for those who had qualified, the LGP entitlements would be wound back for former and current members of parliament. As part of these reforms, spouses or de facto partners would no longer be eligible for travel, and limits would be placed on eligibility and the class and number of trips per annum. The 2014–15 Budget indicates the Government expects savings of $1.1 million in 2014–15 and $1.2 million in 2015–16 from reductions to post retirement travel.
On 2 October 2014 the Government introduced the Parliamentary Legislation Amendment Bill 2014, which would result in the benefit being wound back for current eligible former members, and ultimately closed off to all eligible members except for former prime ministers by 2026. The entitlement for former prime ministers would be reduced from 40 to 30 return domestic trips per year. The Bill includes a timeline for limitations and reductions to parliamentary retirement travel for eligible MPs based on retirement date and position (such as minister or senior office holder) held while in Parliament. The legislation would abolish any entitlement by spouses or de facto partners of eligible former MPs and eligible current serving members to access retirement travel benefits (except for the spouse or de facto partner of a former prime minister). It would also require that all retirement travel must be for the public benefit. In addition it changes the title of the entitlement to the Parliamentary Retirement Travel Entitlement. A number of the legislative changes relating to the LGP have a retrospective commencement date of 14 May 2014.
The AFMPA, in a submission to the SFPALC inquiry into the Bill, has raised the issues of the retrospective impact of the legislation, the exclusion of spouses or de facto partners, and the unjust acquisition of property as some of the reasons they were contemplating a High Court challenge.
The Department of Finance (Finance), in its submission to SFPALC, noted that it considers the Bill would not result in an acquisition of property under subsection 51(xxxi) of the Australian Constitution. However, Finance also considers that, if compensation was granted by a court, the amount would not exceed the savings from the measure.
Finance publishes information on its website relating to payments to eligible former MPs and their spouses or de facto partners under the current post retirement travel entitlement. It would appear from the reporting that Finance has acted to stop the entitlement from 13 May 2014 for a large number of eligible former MPs pending the passage of the legislation.