Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

I table a supple­mentary explanatory memorandum relating to the government amendments to be moved to this bill. The memorandum was circulated in the chamber earlier today.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I did not get an opportunity to make a brief contribution in relation to the second reading debate, and I apologise for that, but I would like to raise a couple of issues with the minister. I am grateful for the discussions that I have had in general terms with the Special Minister of State's office in relation to these issues broadly. I just want to clarify a few things. Firstly, schedule 2 contains amendments in relation to the salaries of parliamentarians and implements the recom­mendation of the committee for a review of parliamentary entitlements—the Belcher review—which proposed to restore the ability of the tribunal to determine parliamentary base salary, require the tribunal to publish reasons for its decisions in relation to parliamentary remuneration and remove parliament's ability to disallow parliamentary remuneration determinations made by the tribunal. I note that my colleague Senator Bob Brown, in his minority report for the Australian Greens, along with Senator Siewert, has a different view in relation to the last aspect.

My concern is about transparency and accountability in the process. That relates to the extent to which there can be appropriate public input into the process to ensure some openness so that, if politicians are seeking a pay rise or a change in their conditions, there must be some transparency in the process, in the same way, I guess, that Fair Work Australia may work. To what extent can the Remuneration Tribunal in its current form have a process that is seen to be more inclusive and transparent with respect to the setting of parliamentarians' pay? Is that something that is covered within the scope of the current powers of the tribunal, in addition to the proposed amendments?

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

I am not sure whether you were in the chamber when I gave my speech earlier, but I did say that the changes that are outlined in the bill also refer to the Remuneration Tribunal having to publish their decisions and also reasons for the decisions that they make. In terms of transparency, this is a big step in the right direction and certainly one of the intentions of the other bill.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I appreciate the minister's response. I understand that there is greater transparency than before, which is welcome, but, in the framework that is being proposed for greater transparency, does the govern­ment consider that it would mean that the tribunal could open up its hearings and, for instance, call for public submissions to look at comparative pay and conditions in other sectors of the economy, ask for comments from parliamentarians as to the nature of the work they do, and ask for comments from other interest groups before deciding what the appropriate level of remuneration would be? Is that something that could be done within what is being proposed, which is in addition to the current framework? In other words, is there scope for the tribunal to have that additional level of public and community input?

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

My understanding is that the tribunal would take submissions from any interested member. In the new bill, they would be required to print the reasons for any decision making. In terms of any of their processes, that would be a matter for the tribunal to make themselves. The tribunal, as I have said and as Senator Fifield has said and everyone has noted, are independent in terms of their decision making, but they are also independent in terms of their processes.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I appreciate the frankness of the minister's answer. Does that mean that the tribunal does have the power, given its independence, to, for instance, decide that the mechanism by which it calls for submissions is a public one and it could seek submissions quite broadly—from the community, from parliamentarians, from interest groups and from the general public? Also, does it have the capacity, should it so wish, to hold public hearings in relation to its process of making a determination?

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

I am advised that that would be a matter for the tribunal to decide as they see fit.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I know this is a difficult issue because you do not want to be seen as interfering with the independence of the tribunal, in terms of the final decisions they make. Maybe this is a question I could put to the opposition as well, and I presume that Senator Fifield is hanging onto my every word. If the tribunal had a process whereby they did have public hearings into their determinations, is that something that the government would be comfortable with, regarding the way the tribunal operates? It is a similar issue to that of the opposition—if there were an additional level of openness.

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

I again note that the tribunal is an independent body in terms of its processes. It is a decision that it must make itself. I am sure that the tribunal will be paying close attention to your comments tonight and we will certainly pass them on.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am not sure what Senator Fifield's view is on this. I think we all acknowledge that the tribunal's decision making must be independent, but would that independence be in any way compromised if there were a requirement, for instance—and it will not be debated on this occasion—for the tribunal to hold public hearings and consider a broad range of evidence before reaching a decision, without in any way influencing what that ultimate decision may be? Is that something that the government would consider as in any way interfering with the independence of the tribunal?

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

Again, the tribunal is independent. In terms of their processes and how they see submissions and the extent of their work, that is really a matter for them to determine. But we take on board your comments and I am sure that the tribunal will note your concerns.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am grateful to Senator Arbib for his forthright answers in relation to this. I just want to leave it at this: I will write to the tribunal and ask them whether they will seek to open up the process—and I believe it ought to be—and to have a much more public process in the determinations. I do welcome what the government is proposing for a publication of reasons. That is of course welcome. I think it would be fair to say that, if you open up the process, that does not impede or compromise independence as a tribunal and it may well be that this matter will be revisited. I will leave it at that and I look forward to corresponding with the tribunal to see what they say about opening up their process so that it is seen as much more transparent than many in the community believe is currently the case.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The Australian Greens do not support the legislation. While we do support the restoration of the ability of the tribunal to deter­mine the base salaries of parlia­mentarians, we do not support the removal of the ability of parliament by disallowance to override the Remuneration Tribunal. Members will recollect that as we went into the global downturn, the last Prime Minister, Kevin Rudd, withheld a recommendation by the Remuneration Tribunal to increase parliamentary salaries.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

That was to curb inflation.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It draws interjections straight off from the coalition. But I do not know of any determination by the tribunal that parliament has interfered with to increase. What this legislation is about is the government and the opposition supporting a recommendation which takes away not only the right but also the respon­sibility of parliament to curb a grant of extra payments to parliamentarians at a time when the rest of the community is not getting them. That will come down the line again. Sure, it is good that we have an independent tribunal looking at parliamentary salaries and entitlements, but it is beyond common sense that we remove from parliament the right and responsibility written into the Constitution that we determine ultimately the salaries of parliamentarians. This is a cosy and con­venient piece of legislation to say that the Remuneration Tribunal should keep parlia­mentarians' salaries increasing above the level of salaries and income for the rest of Australians, because that is the trajectory, but please shield us from the responsibility of keeping that in check. This is just an easy way for MPs to say, 'We do not want controversy as we get increases which are out of kilter with the average worker in this country.' I for one, and on behalf of my colleagues, am prepared to take on that responsibility. We have always had it and we should retain it.

What is next? Is the next thing going to be a further recommendation going through the Remuneration Tribunal that our electoral allowances be rolled into the salaries so that we no longer have an obligation, at least an implicit obligation, to spend money on our electorates and have it go instead straight into our pockets?

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I think it might be—

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Yes, Senator Xenophon, I think it might be, and I am not going to support that, and the Australian Greens will not support that process.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Further to Senator Brown's contribution, I would be grateful if the minister could clarify. As I understand it, the amendments do give the power to the tribunal to roll parts of a parliamentarian's salary package, in terms of the electoral allowance, into a salary package. Is that the case? Is there the potential for the tribunal to do so?

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

My understanding is that it is giving them the discretion to roll in or take out for the purposes of superannuation.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

That is my understanding. As I understand it, it means that for those members of parliament elected prior to 2004, who are in a different superannuation scheme from those elected post 2004, it means therefore that there is that ability to roll various allowances including a travel allowance into the remuneration package by virtue of these amendments. I think that was one of the issues that Senator Brown was concerned about.

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

Yes, Senator, that is correct. But the stated intention of the government at the moment is to remove the possibility of unintended benefit being accrued by members of the 1948 scheme.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I understand that. For the three people that might be listening to this on News Radio, what it means is that people cannot get an additional benefit by virtue of salary being increased by the rolling in of some of these allowances. I think that is the idea, and that of course is the right thing to do. The issue is that this does not mean that there will be changes post 1 July; it means that the changes may occur should the tribunal so decide at some subsequent stage. Is that right?

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

I am sure there are more than three people listening, but that is correct, yes.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am sorry if I misled the Senate, then. It might be five! This is a significant change. In my time as a member of the Legislative Council of the South Australian parliament, I think that on one or two occasions the local tribunal had a questionnaire: 'What did you spend your electoral allowance on?' I recollect that I was very happy to fill that out, and I think I probably spent more than the electoral allowance on various activities, but at the moment there is no obligation to do so. Does the government have a view on—

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

You can argue that. If it's transparent, you can argue it.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Yes, that is right. So does the government have a view as to the accountability of current electoral allowances, for instance, or whether it would be simpler to have it rolled into one? Similarly, for the international travel allowance for members of parliament after they have completed one term, is there any policy view or are you suggesting that this is a matter that the tribunal will deal with in due course?

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

Again, these are matters that really should be dealt with by the tribunal themselves. What we are talking about tonight is independence and trans­parency. In terms of those sorts of delibera­tions, they are matters that the tribunal should come to under their own investi­gation. Of course, Senator, you are very welcome to provide a submission to the tribunal outlining your position, and I am sure that your comments tonight will be noted.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Yes, of course, but there will not be any parliamentary responsibility for the outcome. For example, $30,000 or $40,000 of electorate allowance is going to go straight to salaries under this trajectory that we are seeing in this parliament now. MPs can currently spend their electorate allowance on themselves if they want to, but the at least implicit obligation is going to be removed. We all know what that means: it is going to mean that in the electorates where there will not be an electorate allowance there will be less money going to the electorates. There are people who spend more than their electorate allowance on their electorates at the moment, and there are some who spend almost nothing of that electorate allowance on their electorates, but what this does is validate the second component of that: it validates that money being transferred into MPs' packages with no strings attached, not even an inherent obligation to spend the money on the electorates.

I know what will happen next: there will be legislation coming into this parliament a couple of years down the line to restore electorate allowances on top of the new salaries. That is something for the majority in this house and the other house to do if they wish. I believe that this legislation removing our responsibility and, indeed, the debates that have regularly occurred about MPs' salary increases are a shedding of our own responsibility to the electorate to be moderate in our assessment of our own worth. We are paid well and we do have good allowances compared to other parliaments around the world, but we have a responsibility, after an independent tribunal makes recommendations, to ensure, for example, that that is in keeping with what other people, who have voted us into the parliament, are getting.

I will not labour this point. I support the new measures of accountability of the tribunal—that it should publish its reasons and that it should be able to assess base salaries—but really the crucial point of this legislation is ridding ourselves as parliamentarians of the need from time to time to get up and contribute to a debate about how much we are worth, how much we should be paid and how closely that is related to the value of other workers in our community. I reiterate that the Constitution puts that obligation on us very early, and it is one that we should be keeping, not trying to shed off our shoulders through this piece of legislation.

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

I note the comments made by Senator Brown, and I also note that this does not stop politicians from being involved in the debate. Of course, politicians and members of parliament can make submissions to the tribunal, and also they can make public statements at any time about what they believe is appropriate, but in the end what we are attempting to do as a parliament is to ensure that the independence and transparency are there for the deliberations of the tribunal. At the same time, parliament still retains the right to amend the legislation at any time. The right is obviously there and is something that could be considered in future.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I have never in my recollection—I might be wrong—had the tribunal ask my opinion. I have sent submissions to the tribunal, and I almost always found they got little reception. Maybe it should be this way. It is an obscure tribunal that is out there somewhere, divorced from any close working relation­ship with MPs. Maybe that is a good thing. But, Senator—through you, Chair—on your suggestion that we send submissions to the tribunal, I found that a process that has not been very rewarding in the past. Maybe after this legislation it will improve.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

This is a question both to Senator Fifield and to the minister. Given the proposed new powers of the tribunal—which from my point of view, in terms of their accountability provisions, are obviously welcome—what is the position of the government and the opposition in relation to making submissions to the tribunal with respect to the new powers it will have to roll in components of a member of parliament's entitlements into the overall salary package?

For instance, could Senator Fifield indicate the approach the coalition will take in its dealings with the tribunal in relation to these matters. Presumably, there will be some submissions, one way or the other, as to the tribunal's new powers and in terms of its deliberations.

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

This is an unusual practice. I guess it is good practice for when we assume a position on the other side of the chamber! I do not have that knowledge, but I will happily convey your request to our shadow.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am just trying to help Senator Fifield. As the shadow minister responsible can he advise whether the coalition has written to the tribunal about remuneration issues in the past.

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Yes.

Mark Arbib (NSW, Australian Labor Party, Minister for Social Housing and Homelessness) Share this | Link to this | Hansard source

I have answered the question in terms of politicians and parliamentarians making submissions. That is obviously something that is available, and everyone is encouraged to do that if they see fit. I seek leave to move amendments (1) to (7) together.

Leave granted.

I move:

(1)   Schedule 2 , item 1 , page 14 (lines 14 and 15) , omit paragraph (d) of the definition of parliamentary allowance in subsection 4(1), substitute:   (d)   parliamentary base salary (within the meaning of the Remuneration Tribunal Act 1973 ), less any portion determined under subsection 7(1A) of that Act.

(2)   Schedule 2 , item 6 , page 15 (lines 24 and 25) , omit paragraph (b) of the definition of parliamentary allowance in section 3, substitute:   (b)   parliamentary base salary (within the meaning of the Remuneration Tribunal Act 1973 ).

(3)   Schedule 2 , item 14 , page 16 (lines 20 to 23) , omit the definition of parliamentary allowance in clause 1A of Schedule 3, substitute:

parliamentary allowance means parliamentary base salary (within the meaning of the Remuneration Tribunal Act 1973 ).

(4)   Schedule 2 , page 17 (after line 2) , before item 17 , insert:

16A Subsection 3(1)

Insert:

parliamentary base salary means so much of the allowances determined under subsection 7(1) as:   (a)   represents the annual allowance payable for the purposes of section 48 of the Constitution; and   (b)   is identified in the determination as base salary.

(5)   Schedule 2 , page 17 (after line 4) , after item 17 , insert:

17A After subsection 7(1)

Insert:(1A)   The Tribunal may determine that a portion of parliamentary base salary is not parliamentary allowance for the purposes of the Parliamentary Contributory Superannuation Act 1948 .

(6)   Schedule 2 , item 19 , page 17 (line 14) , after " subsection (1) ", insert " , (1A) ".

(7)   Schedule 2 , item 20, page 17 (line 25) , after " subsection 7(1) ", insert " , (1A) ".

I move these amendments because it has become clear that, under the bill as drafted, any additional salary determined by the Remuneration Tribunal would become part of a member or senator's parliamentary allowance. As senators and members would know, their parliamentary allowance is effectively their salary for superannuation purposes. Without the amendments current and former parliamentarians who are members of the Parliamentary Contributory Superannuation Scheme, established under the Parliamentary Contributory Superannuation Act 1948, could also receive increased superannuation benefits if the tribunal decides to incorporate any allowances into their parliamentary allow­ance. This would occur as, under the scheme, the benefits of former parliamentarians and eligible dependants are linked to the salaries of current parliamentarians.

As a consequence, each increase in the salary payable to current parliamentarians increases the superannuation income of members of the PCSS who are no longer in the parliament. This benefit would also flow to PCSS who subsequently leave the parliament. The amendments provide the tribunal with the authority to determine that a portion of parliamentary base salary is not 'parliamentary allowance' for the purposes of the 1948 act. Accordingly, a person covered by the 1948 act would not be entitled to receive superannuation benefits based on those amounts. The intention of the amendments is to ensure that the independent Remuneration Tribunal, should it be granted responsibility for determining parliamentarians base salaries, will be able to exercise that responsibility without creating unintended benefits for members of the 1948 act scheme. These amendments are consistent with a recommendation in the report of the review of parliamentary entitlements and further demonstrate the government's commitment to an efficient, effective and transparent system of remuneration and entitlements for parliamentarians.

Question agreed to.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.