FEDERAL MEMBERS OF PARLIAMENT (MP) – THE TRIBUNAL’S ROLE

The Tribunal determines remuneration and allowances for current MPs along with certain allowances and expenses for former MPs in accordance with its powers under the Parliamentary Business Resources Act 2017 (PBR Act).  Further detail on these determinations is provided below.

The PBR Act requires the Tribunal to conduct annual reviews of its determinations.

The Tribunal also enquires into and makes recommendations to the Special Minister of State on a range of expenses relevant to domestic travel, for inclusion in the Parliamentary Business Resources Regulations(PBR Regulations).

Other expense provisions are determined by the Special Minister of State.

The Tribunal only determines the salaries of members of the Australian Parliament. Under Australia’s federal system, States and Territories make their own arrangements in relation to parliamentary pay.

SALARY

The Tribunal determines both the base salary for all MPs and additional salaries for certain parliamentary offices holders.

Current rates are set out in the Tribunal’s Members of Parliament Determination is available on the Parliamentary Offices page of the Tribunal’s website.

The Tribunal also makes recommendations to the Government on additional salaries for Ministers of State.  The Government may accept or reject that advice.  The Tribunal’s most recent report to Government, Report on Ministers of State – Salaries Additional to the Basic Parliamentary Salary, is available on the Tribunal’s website.

OTHER REMUNERATION AND ALLOWANCES

The Tribunal determines a range of remuneration related provisions (such as private plated vehicles) and allowances (including electorate allowance and travel allowances) for MPs, as well as provisions for former MPs (such as post-retirement travel).

These are set out in the Tribunal’s Members of Parliament Determination.

SUPERANNUATION

Superannuation is not determined by the Tribunal but is governed by the Parliamentary Contributory Superannuation Act 1948 and the Parliamentary Superannuation Act 2004.

The Tribunal does, however, determine the portions of base salary and additional salaries that do not count as salary for superannuation purposes for members of the 1948 scheme.  The current rates are set out in the Tribunal’s Members of Parliament Determination.

PARLIAMENTARY RETIREMENT TRAVEL

Under the Parliamentary Retirement Travel Act 2002, the Tribunal sets the qualifying periods for access to parliamentary retirement travel (previously known as Life Gold Pass) which applies only to former Prime Ministers.

The qualifying periods are set out in the Tribunal’s Parliamentary Retirement Travel Determination available on the Parliamentary Offices page of the Tribunal’s website.

BACKGROUND

The Remuneration Tribunal has had a role in setting the remuneration, allowances and expenses for MPs since its establishment in 1973.  However, the nature of the Tribunal’s authority, particularly in relation to parliamentary remuneration, has changed over time.

You can read more about the history of parliamentary base salary (which is the current term for the parliamentary allowance prescribed in section 48 of the Australian Constitution) in A Brief History of Parliamentary Remuneration.

It was not until 2011 that the Tribunal was given unrestrained power to determine base salary for MPs.  This occurred via amendment to the Remuneration Tribunal Act 1973 (the Remuneration Tribunal Act) by the Remuneration and Other Legislation Amendment Act 2011, which took effect on 5 August 2011.

In 2011, with the assistance of an external consultant, the Tribunal conducted a review of the work of MPs and published its findings on 15 December 2011 in the Review of the Remuneration of Members of Parliament – Initial Report .  The Government’s consideration of this report led to further amendments to the Remuneration Tribunal Act by the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012.

The Tribunal’s first determination of base salary for MPs (and additional salaries for Parliamentary office holders) under the new arrangements took effect on 15 March 2012.

AN INDEPENDENT PARLIAMENTARY ENTITLEMENTS SYSTEM – REVIEW

Until 31 December 2017 MPs’ remuneration, allowances and expenses were prescribed via a number of federal Acts, Regulations, Tribunal determinations and instruments issued by the Special Minister of State.

Government reviews of parliamentary expenses, including travel provisions, between 2010 and 2015 concluded that this system was overly complex and difficult to follow and administer.

In August 2015 the then Prime Minister announced a review of the parliamentary entitlements system (the Review).  The announcement noted the rules governing the system lacked clarity and transparency and acknowledged that travel undertaken by some MPs had been ‘inside entitlement but outside community expectations’.

You can read more about the Review and the rationale for the establishment of the current principles-based system in the Report “An Independent Parliamentary Entitlements System – Review”.

In 2016 the Government accepted, in-principle, the recommendations in that report and set about introducing legislation to establish a new framework for MP work expenses.

In early 2017 the Parliament abolished the Life Gold Pass scheme and established the Independent Parliamentary Expenses Authority (IPEA).

During 2016 and 2017, the Tribunal worked with the Government (including the Special Minister of State, the Department of Finance and IPEA) to implement the recommendations of the Review.  As part of this process, all existing MP remuneration, allowances and expense provisions were examined and amended as necessary to ensure they aligned with the new principles-based framework.

In May 2017 the Parliamentary Business Resources Act 2017(the PBR Act) was passed by Parliament.  The Act set in place the new framework providing a single head of power for determining MPs’ remuneration, allowances and work expenses and clearly differentiating between remuneration and expense provisions.

The Parliamentary Business Resources (Consequential and Transitional Provisions) Act 2017amended the Remuneration Tribunal Act from 1 January 2018 to move the Tribunal’s powers in relation to the MPs’ remuneration and allowances from that Act to the PBR Act.  From 1 January 2018 all powers in relation to MPs’ remuneration, allowances and expenses are consolidated in a single Act, the PBR Act.

The PBR regulations are disallowable by the Parliament.  This means that within 15 sitting days after an instrument (i.e. the regulations) is tabled in both houses of parliament, a senator, or a member of the House of Representatives may give notice of a motion to disallow the instrument (in whole or in part), and if the motion is agreed to, the instrument is disallowed and then ceases to have effect.

The Tribunal’s Parliamentary determinations, unlike the PBR Regulations, cannot be disallowed by the Parliament.