Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Hansard source

The government does recognise that the issue of parliamentarians’ allowances does get raised in the community. It is a strong position that has been recognised in this chamber over a long period of time—that is, that people, particularly in this chamber, should not be setting their own pay and conditions. It is recognised that there is a perennial argument about what politicians should be paid. It does get raised by both sides of the chamber and gy the minor parties and the community. In acknowledging that debate, it is a sensible proposition to say that there is and should be an independent system that operates, which sets up a system whereby decisions are made by an independent tribunal. It is a sensible position. The alternative would be that individuals themselves might set up pay and conditions, and that would lessen the position that we are in now.

This is a proposition that seeks to disallow a Remuneration Tribunal decision. The government does not support that position. The Remuneration Tribunal is an independent statutory authority and its remuneration decisions are made accordingly. The electoral allowance for federal parliamentarians has not been increased since January 2000. The Remuneration Tribunal recently completed a review of the electoral allowance for federal parliamentarians. This is the first time that a review of the electoral allowance has been conducted since late 2002. As a result of the 2009 review, the Remuneration Tribunal decided to increase the allowance by 17 per cent to approximately $32,000 per year. This increase is outlined in the determination 2009/04.

On behalf of the government, I would like to take this opportunity to assure the chamber that the purpose of this allowance is to reimburse members of parliament for costs necessarily incurred in providing services to their constituents. I recognise that Senator Bob Brown raised the issue that went to base salaries—that is, the base salaries of federal politicians are determined by the Prime Minister, who decided that they would be frozen for the 2008-09 financial year. In determining the base salary of federal parliamentarians, the Prime Minister does take the advice of the Remuneration Tribunal. The Prime Minister decided to freeze the base salaries of federal parliamentarians at $127,000 for the 2008-09 financial year.

In contrast to base salary determinations, subsections 7(1), 7(2) and 7(4) of the Remuneration Tribunal Act 1973 provide the Remuneration Tribunal with the power to determine a range of entitlements and allowances for senators and members of the federal parliament. The major allowances determined by the tribunal include travel allowances, travel allowance rates and travel related provisions, the electoral allowance, the qualifying period for a life gold pass, severance travel and certain other office facilities.

As senators in this chamber will know, all Remuneration Tribunal determinations are disallowable by the parliament. In handing down its decision on electoral allowances, the Remuneration Tribunal made a statement about the nature of the electoral allowance. For the information of the Senate I might go to the content of that statement:

Federal parliamentarians (both Senators and Members of the House of Representatives) have been in receipt of an electorate allowance since 1952.

The purpose of the allowance is to provide funding to members to cover a range of expenses involved in servicing their electorates. The allowance comprises a base amount plus supplementary amounts for those Members whose electorates exceed 2000 square kilometres in size. At the end of each financial year any part of the allowance which is not expended on genuine electorate expenses to the satisfaction of the Australian Tax Office is regarded as personal income and taxed accordingly. Rates of similar allowances available to members of parliaments and assemblies around Australia vary widely.

The allowance enables members to make modest provision for expenditure at their discretion to address differing needs in their respective electorates. Previous reviews have noted that members spend the allowance in widely varying ways in servicing their electorates.

The Remuneration Tribunal determines the amount of the allowance. There is no automatic mechanism for adjusting it each year and the Tribunal has not varied the amount since January 2000. The Consumer Price Index has since increased by more than 30 per cent; that is, more than 3 per cent annually.

The tribunal has taken into account the costs to members of meeting the commitments to which their allowances are directed and has recognised that they have increased over the same period. Accordingly the tribunal made a decision to lift the base allowance to take into account the diminution of that amount for that period.

It is long established that the independence of the tribunal and its decision making in these areas should be recognised. I think the alternative is something that the government would consider—that is, politicians setting pay and conditions themselves. In this instance I recognise Senator Brown’s concern and the concern that is raised in the community about these matters. However, the use of a disallowance motion is recognised as quite a blunt instrument in this instance. I note the comments made by Senator Xenophon about transparency. The Remuneration Tribunal is a statutory office, it is transparent and is able to provide information upon request to any senator or member who wishes to seek further information. Of course in this instance the tribunal, as I have said, has come to an independent decision in respect of allowances.