Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

This bill is mainly technical in nature in that it completes the process commenced with the Remuneration and Other Legislation Amendment Bill, passed in this place last year in order to grant complete independence to the Remuneration Tribunal. It implements the recommendations of the Remuneration Tribunal, released in December last year, which in simple terms are to close the Life Gold Pass scheme to new entrants to this place from the commencement of the bill, including those who have not qualified but re-enter. It also reduces the cap upon the number of domestic return trips eligible for current holders of the Life Gold Pass. It also gives the Remuneration Tribunal the power to determine portions of additional office holder and ministerial salary that may be excluded from the benefits payable to members of the now closed 1948 parliamentary superannuation scheme.

In relation to the second matter, this bill merely ensures that members of the former and current superannuation schemes do not receive different treatment due to the Remuneration Tribunal's announcement or future determinations. The opposition supports this bill.

Lee Rhiannon (NSW, Australian Greens) Share this | Link to this | Hansard source

The Greens have long opposed the Life Gold Pass. In July 2009, Senator Bob Brown called for the Life Gold Pass to be reviewed by an independent arbiter. The bill abolishes the Life Gold Pass entitlement prospectively so that it is not available to those who enter the parliament at or after the commencement of the bill. The bill also severs the link between the additional pensions paid under the 1948 superannuation scheme and additional salaries paid to office holders and ministers.

The Life Gold Pass scheme, which in 2010 to 2011 cost taxpayers—cost the public, therefore—$1.3 million, will be closed for new members, and the entitlement of existing members will be reduced from 25 to 10 business class flights a year. While we commend the closure of the scheme, it should be noted that the reason for the rush to pass this bill is to facilitate the Remuneration Tribunal in gifting parliamentarians a pay rise. It has been made clear by the Remuneration Tribunal and the minister that this rise in base salaries from $140,910 to $185,000 per year is contingent on the passage of this bill. The reason for the government and opposition support for the hurried debate of the bill is certainly clear.

The Greens do not support the corres­ponding restoration of the Remuneration Tribunal's power to determine parliamentary base salaries without the power of parliament to disallow the determinations. Surely that should be in place. Transparency and accountability demand that the parliament maintain oversight over such matters. The major parties removed the embarrassment of accepting the pay offer and shed respon­sibility for a pay grab. They are some of the comments that were made when this announcement was made. It is the responsibility of each parliamentarian to justify to the electorate, to the taxpayers, to the public, the remuneration for MPs. Politicians' salaries should be compared with those of ordinary Australians like police, nurses and teachers, not corporate executives who earn millions of dollars. We support the bill but it is important that we note what is behind it.

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

My contribution will be short, perhaps not quite as short as Senator Ryan's or Senator Rhiannon's, but I think it is important that we put a few things in context, and I have an amendment that I will move in the committee stage of this bill. I understood, when I spoke to the Special Minister of State's office, that the government was not inclined to support the amendment, but I believe in miracles. Who knows? Senator Feeney may have some different news for me, although I doubt it.

We need to put this in context. This bill relates to consequential amendment. It relates to recommendations made arising out of the Belcher review, and that was a very useful process. I would like to commend the work done by former Special Ministers of State Faulkner and Ludwig, and I would particularly like to thank the current Special Minister of State, the Hon. Gary Gray, for the work his office has done to bring about some reforms to the system.

When we dealt with the issue of the independence of the Remuneration Tribunal, I raised some concerns about issues of transparency and openness, and I will discuss that further in the context of the amendment I will be moving. I think it is very important when we consider legislation such as this that it should not be not about us; it should be about the people who voted for us. The people of Australia are our employers. Their taxes pay our salaries, their votes give us our jobs and their confidence or otherwise, and they determine our futures. Like any employer, the Australian people deserve to have some say in what they pay their employees. There has been a long-time argument that politicians deserve to be paid on an equal footing with other industries—wages relativity, if you like. I think that what the Remuneration Tribunal has done by speaking to a number of MPs—and I was one of those—was a very useful and good exercise. I was impressed with the forensic nature of what they did, and I think that the secretariat of the Remuneration Tribunal should also be commended for their professionalism and the way they tackled the task in their discussions with MPs and senators. I think that was a very good exercise.

While I accept that if you pay peanuts you are most likely to get monkeys, we cannot forget that our sole purpose in being here is to represent our constituents. Schemes like the Life Gold Pass might not raise an eyebrow in another industry but they erode the faith that Australians have in their representatives. People believe fairly enough that, after we retire, we are not here to enjoy business class flights and comfy pension packages. I can understand why there is significant public opprobrium in relation to the gold pass scheme. I think there is one exception: we need to make sure that our former prime ministers are treated differently. My understanding is that they are, and I do not think we will ever go to the stage—nor should we—of the way they treat former presidents of the United States. It is fair to say that if you have been a Prime Minister of this nation then you have something to offer. You are in demand from the community from all over to discuss and be requested to open an art exhibition or speak on issues of public policy. It is quite reasonable that those gold pass entitlements ought to continue for former prime ministers if they are travelling for the purpose of public duties arising from the fact that they are a former Prime Minister.

I support the government's intentions in this bill and, even though they have been a long time coming, there have been some welcome reforms. I think we need to go further. I propose some amendments to this bill that will require the Remuneration Tribunal to hold public consultations before making a determination into politicians' pay or entitlements, and I will expand on this during the committee stage. I note that the government has previously made changes to the Remuneration Tribunal's operations and their powers. Having true independence is a good thing but it ought to be coupled with greater transparency. I believe those changes need to go further. One of the Australian Labor Party's founding principles is 'a fair day's work for a fair day's wage', and there are not too many who would disagree with that. It should apply to those who make the rules as much as to those who are required to obey them. There needs to be a transparent process for evaluating politicians' pay and entitlements, a process that takes into account the positions of the general public, of interest groups and of politicians themselves. In the real world there are not many people who would get to decide whether they should get a pay rise, and I think that is why it is good that there is now independence on the part of the tribunal.

It is important to strengthen confidence in the process of politicians' pay and their entitlements and to have a process that is much more transparent, where there is a public hearing process and where public submissions are called for. I note that the Remuneration Tribunal did that in previous years, but mandating that the tribunal do this does not fetter their independence; it is a question of ensuring some essential processes to ensure that occurs. Whether we like it or not there is a higher standard on politicians to be transparent, particularly in respect of the processes that relate to their pay and conditions being altered. It is an honour to serve Australia in this place but it does not make me or anyone here deserving of special treatment, and that is why it is important that this legislation ought to be strengthened.

I will have some questions at the committee stage about the issue of the decoupling of politicians' superannuation, those who were elected prior to the changes in 2004 and these changes. They will be genuine questions as to how this will work and what formula will apply to ensure that there is not an unnecessary windfall, which is the intention of this bill. I want to ask some technical questions in relation to how this will actually work. I would like to hear from my colleagues on all sides as to whether or not they support some greater transparency and why the Remuneration Tribunal, which I think is made up of honourable and capable people, along with its secretariat, would not be able to accommodate these amendments to have a much better system of determining politicians' pay and entitlements.

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I thank senators for their contributions to this debate on the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Bill 2012. This bill is a further demonstration of the government's commitment to reform the parliamentary entitlements framework. In 2009 the government commissioned an independent committee chaired by Ms Barbara Belcher AO to review parliamentary entitlements. On 24 March 2011, the Special Minister of State tabled the committee's report and introduced the Remuneration and Other Legislation Amendment Bill 2011, which restored the power of the independent Remuneration Tribunal to determine the parliamentary base salary of parliamen­tarians. On that day the Special Minister of State also agreed to the tribunal's request that it consider the other recommendations of the committee's report and to make recom­mendations on parliamentarians' tools of trade and other entitlements issues.

The tribunal released its initial report into the review of the remuneration of members of parliament on 15 December 2011 and the government has moved immediately to accept key recommendations of this report, including that the Life Gold Pass scheme be closed prospectively; that the travel entitlement of Life Gold Pass holders be reduced; and that the link between additional pensions under the Parliamentary Contri­butory Superannuation Scheme, the 1948 scheme, and additional salaries for serving parliamentary office holders and ministers be severed. This bill implements those recommendations of the independent tribunal.

Once this bill takes effect, the Life Gold Pass scheme will be closed to those who enter or re-enter the parliament. The travel entitlement of existing Life Gold Pass holders who have never held office as Prime Minister and their spouses or de facto partners will be reduced from 25 to 10 domestic return trips per financial year from the 2012-13 financial year. Sitting senators and members will remain eligible to accrue an entitlement to a Life Gold Pass where they serve the remainder of their relevant qualifying period prior to leaving the parliament. Further, a sitting senator or member who ceases to be a member of their house and who becomes a member of the other chamber within three months will be regarded as having had continuous service in the parliament and will continue to be eligible for a Life Gold Pass. In accordance with the tribunal's recommendation that the travel entitlement of Life Gold Pass holders be reduced immediately, the bill introduces a transitional provision which limits the number of domestic return trips for the remainder of 2011-12 to a maximum of two. This provision will apply from the later of the day on which the bill receives the royal assent or 1 April 2012.

As senators may be aware, serving ministers of state and parliamentary office holders receive additional salaries as a percentage of parliamentary base salary. Any increase in the parliamentary base salary determined by the tribunal would then flow to the additional salaries of ministers of state and parliamentary office holders. The measures in this bill will allow the Remuneration Tribunal to limit any windfall gains from increases in the additional salaries of office holders and ministers of state flowing to the superannuation benefits for current and former parliamentarians. These measures complement similar arrangements approved by the parliament last year, in the Remuneration and Other Legislation Amendment Act 2011, in relation to increases in the parliamentary base salary for members of parliament.

The reforms to the parliamentary entitlements framework set out in this bill will contribute to an effective, efficient and transparent system of remuneration and entitlements, and will help to build the Australian public's confidence in the parliamentary entitlements system. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.