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 2.75 per cent pay rise from 1
July 2022 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. 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, 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
-
provides that MPs have to ensure
value for money in incurring expenses or claiming allowances or other public
resources, and
-
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.
On 6 June 2019 the Tribunal announced
a two per cent increase for public offices in its jurisdiction. The Remuneration Tribunal
(Members of Parliament) Determination 2019 shows that the base salary for
MPs increased to $211,250 per annum from 1 July 2019. The Tribunal made no
change to ministerial
salary. For office holder salary and other allowances see Remuneration Tribunal
(Members of Parliament) Determination 2019.
In its 2020
Remuneration Review Statement the Tribunal decided to provide no adjustment
to remuneration for public office in its determinative jurisdiction from 1 July
2020.
On 10 June 2021 the Tribunal notified
its decision to determine no adjustment to remuneration for public offices
in its jurisdiction with effect from 1 July 2021.
Remuneration
Tribunal (Members of Parliament) Determination 2020 and Remuneration Tribunal
(Members of Parliament) Determination 2021 put the decisions into effect. The
Tribunal issued a report
on ministerial salary in July 2021 that provided no alterations to the
existing percentage levels.
On 13 June 2022 the
Tribunal decided an increase
of 2.75 per cent for public offices in its jurisdiction with effect from 1
July 2022. The Tribunal gave effect to this increase from 1 July 2022 through
the Remuneration
Tribunal (Members of Parliament) Determination 2022. The base salary
increased from $211,250 to $217,060.
On 8 June 2023 the Tribunal announced
that it would defer its annual review until August 2023. On 28 August 2023 the
Tribunal released Remuneration
Review Statement–Adjustment providing a 4 per cent increase to public
offices within its jurisdiction. The Tribunal issued Remuneration
Tribunal (Members of Parliament) Amendment Determination (No 1) 2023 that
provided the base salary to increase to $225,750 from 1 September 2023. This
has been incorporated into Remuneration Tribunal
(Members of Parliament) Determination (No. 2) 2023.
The Tribunal issued a report on ministerial
salaries in July 2023 that provided no alterations to the existing
percentages levels.
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 as well as salaries of office for ministers and parliamentary
officer holders.
Sources and further reading
All hyperlinks are correct as at November
2023.
Acts
and Bill homepages
Parliamentary
Library publications
-
C Madden and D McKeown, ‘Independent Parliamentary Expenses Authority’, FlagPost (Parliamentary Library blog), 7 February 2017.
-
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.
-
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, (Canberra:
Parliamentary Library, 2017).
-
C Madden, Parliamentary Entitlements Legislation Amendment Bill
2017, Bills Digest, 62,
2016–17, (Canberra: Parliamentary Library, 2017).
-
C Madden and D McKeown, Parliamentary remuneration and entitlements: 2016
update, Research paper series,
2015–16, ( Canberra: Parliamentary Library, 2016).