Posted 03/06/2022 by Cathy Madden
The remuneration system for federal parliamentarians is highly complex and not readily transparent. One of its more obscure components is a resettlement allowance for parliamentarians who ‘involuntarily’ leave Parliament—either by losing an election or the endorsement of their political party. This FlagPost highlights some key issues regarding the resettlement allowance, including recent media interest and the history of its development.
The current resettlement allowance provides certain former parliamentarians up to $105,625 (based on six months of the base salary). Parliamentarians who resign or choose not to recontest the next election are ineligible to receive the allowance. In most circumstances the allowance is allocated without any controversy. Following the 2019 election, 20 former parliamentarians were eligible for the allowance. Similarly, many others who were defeated at the 21 May 2022 election will be entitled to a resettlement allowance.
However, during the 46th Parliament, the allocation of resettlement allowances gained significant media coverage in two separate instances. Having reversed an earlier decision to not contest the 2022 federal election, the sitting Member for Bowman, Andrew Laming lost the Queensland Liberal National Party’s endorsement. Additionally, the Nationals Member for Dawson, George Christensen, initially announced he would not contest the 2022 election before nominating as a Senate candidate for Pauline Hanson’s One Nation party. Both Dr Laming (when disendorsed) and Mr Christensen (if defeated) would be entitled to the resettlement allowance, based on the context of these events.
In 2013 Craig Thomson also received the resettlement allowance when he lost Labor Party endorsement and stood unsuccessfully as an Independent, despite facing charges of criminal fraud and theft. The Remuneration Tribunal (Members of Parliament) Determination 2021 stipulates that parliamentarians are ineligible for the allowance if they lose endorsement due to misconduct. However, the term misconduct is not defined in the overarching legislation or the determination, and there appears to be no instances where it has been withheld on those grounds.
Media reporting on the situations described above call into question the integrity of the payment. Is it time for the criteria for receiving the allowance to be reviewed?
History of the entitlement
The Remuneration Tribunal is the independent statutory body which ‘handles the remuneration of key commonwealth offices’, including federal parliamentarians. The catalyst for the resettlement allowance was a 1997 report by the Senate Select Committee on Superannuation, which found that a ‘dislocation benefit’ should be considered by the Remuneration Tribunal. The report highlighted the disruption of involuntary termination to parliamentarians' working lives, and the fact that such arrangements are common in the general community. Accordingly, on 18 September 2001, the Minister for Finance and Administration, John Fahey, asked the Tribunal to inquire into the provision of a redundancy-type benefit to assist former senators and members re-establish themselves in the workforce. The Tribunal reported in August 2003 supporting the proposal but it was not until September 2006 that Prime Minister John Howard introduced a resettlement allowance.
The following month, the Tribunal issued Determination 2006/23 Remuneration and Allowances for Holders of Public Office and Members of Parliament. The allowance provided for three months ordinary backbench salary ($39, 650 at that time) in circumstances of involuntary retirement.
Subsequently, the 2010 Report of the Committee for the Review of Parliamentary Entitlements recommended a more generous resettlement allowance noting that unlike many others in the Australian workforce, parliamentarians do not accrue recreation and long service leave, which could be cashed in and used upon leaving parliament. Accordingly in 2011 the Tribunal determined a two-tiered approach – a payment equivalent to three months’ base salary ($52,813 of the current base salary of $211,205) for single term parliamentarians, and a payment equivalent to six months’ base salary for parliamentarians who have served multiple terms.
Currently, NSW and Tasmania are the only two jurisdictions where members do not have an entitlement to a Transition/Resettlement allowance. Western Australia, Victoria, Northern Territory and the Australian Capital Territory apply a transition allowance for voluntary separation (with some exceptions for those who run for office in another Parliament). Interestingly the ACT Tribunal decided that there would not be a requirement for the MP to leave Parliament involuntarily noting that the ‘involuntary requirement’ may ‘instil some perverse incentives’ and MPs should not be penalised for making appropriate decisions such as if an MP is ‘burnt out’. Like the Commonwealth, South Australia and Queensland provide an allowance for involuntary separation only.
The federal scheme could be reviewed to establish if it is still in line with community expectations and address what may constitute misconduct within the context of the scheme.