Remuneration Authority (Members of Parliament Remuneration) Amendment Bill (No 2)

  • enacted

Remuneration Authority (Members of Parliament Remuneration) Amendment Bill (No 2)

Government Bill

169—1

Explanatory note

General policy statement

This Bill is an omnibus Bill introduced under Standing Order 263(a) (dealing with an interrelated topic that can be regarded as implementing a single broad policy).

The Bill implements the Government’s decision to amend the method and frequency requirements for reviews and determinations made by the Remuneration Authority to set the salaries of members of Parliament (MPs).

The Bill amends the Remuneration Authority Act 1977 and the Members of Parliament (Remuneration and Services) Act 2013. Specifically,—

  • Part 1 amends the Remuneration Authority Act 1977 to restore the Remuneration Authority’s discretion when determining the salaries of MPs. In making its determination, the Authority will be guided by the criteria set out in sections 18 and 18A of the Remuneration Authority Act 1977. The Bill also links the frequency of adjustments to the electoral cycle so that the Authority would conduct 1 review after each general election, and would set MPs’ pay for the entire term of Parliament on a year-by-year basis:

  • Part 2 amends the Members of Parliament (Remuneration and Services) Act 2013 to restore the requirement for the Remuneration Authority to consider the value of the personal benefit of entitlements when setting MPs’ salaries.

The Schedule contains a transitional provision that requires the Remuneration Authority to issue a determination for salaries and allowances for the period 1 July 2019 to the polling date for the next general election.

Departmental disclosure statement

The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact assessment

A regulatory impact assessment is not required for this Bill.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 is the commencement clause. This Bill will come into force on the day after the date on which it receives the Royal assent.

Part 1Amendments to Remuneration Authority Act 1977

Part 1 amends the Remuneration Authority Act 1977 (the Act) by—

  • reversing changes made in 2015 that established a formula for calculating the remuneration of members of Parliament; and

  • removing a spent provision that was inserted in 2018 to freeze the remuneration of members of Parliament for the period 1 July 2018 to 30 June 2019.

Clause 3 provides that Part 1 amends the Remuneration Authority Act 1977.

Clause 4 amends section 12 by repealing subsection (2C). That subsection was inserted in 2018 to freeze the remuneration of members of Parliament until 30 June 2019, by preventing the Authority from issuing a determination for the period 1 July 2018 to 30 June 2019, and is now spent.

Clause 5 amends section 18 by repealing subsection (3). That subsection was inserted in 2015 when the formula for calculating the remuneration of members of Parliament was implemented. It provides that the criteria to be used by the Authority for determining remuneration does not apply when the Authority is calculating the remuneration of members of Parliament. Repealing the subsection will have the effect that the criteria specified in section 18 must be applied by the Authority when determining the remuneration of members of Parliament.

Clause 6 amends section 18A by repealing subsection (5). That subsection was inserted in 2015 when the formula for calculating the remuneration of members of Parliament was implemented. It provides that a requirement for the Authority to take into account countervailing economic conditions does not apply when the Authority is calculating the remuneration of members of Parliament. Repealing the subsection will have the effect that countervailing economic conditions must be taken into account by the Authority when determining the remuneration of members of Parliament.

Clause 7 repeals section 18B, which is the section that sets out a formula that must be applied by the Authority when determining the remuneration of members of Parliament. Repealing it will have the effect that the Authority must determine the remuneration and allowances of members of Parliament using the criteria set out in the Act.

Clause 8 amends section 19, which sets out the frequency of adjustments, by—

  • providing that, in the case of members of Parliament, the Authority must begin a review of salaries and allowances within 3 months after a general election and issue a determination to apply from the day after polling day:

  • providing that the Authority’s determination must set out the salaries and allowances of members of Parliament in 4 tranches: from the day after polling day in a general election to the next 30 June, then from the next 1 July to the following 30 June, then from the next 1 July to the following 30 June, and, finally, from the next 1 July to polling day for the next general election.

Clause 9 and the Schedule insert a new Part 3 into the schedule of transitional, savings, and related provisions. That new Part—

  • requires the Authority, as soon as practicable after this Bill commences, to issue a determination of the salaries and allowances of members of Parliament for the period beginning on 1 July 2019 and ending on polling day of the next general election (the new determination); and

  • revokes any other determination that is in force at the time the Bill commences; and

  • requires the Parliamentary Service to reconcile amounts paid under another determination against what would have been paid had the new determination been made on 1 July 2019; and

  • requires adjustments to be made to pay any underpayment and recover any overpayment.

Part 2Amendments to Members of Parliament (Remuneration and Services) Act 2013

Clause 10 provides that Part 2 amends the Members of Parliament (Remuneration and Services) Act 2013.

Clause 11 amends section 8 by repealing subsection (5). That subsection was inserted in 2018 to freeze the remuneration of members of Parliament until 30 June 2019, by preventing the Authority from issuing a determination for the period 1 July 2018 to 30 June 2019. The subsection is now spent.

Clause 12 amends section 16(2)(b) by reversing changes made in 2015 when the formula for calculating the remuneration of members of Parliament was implemented. The effect of the change is to require the Authority, when determining salaries and allowances of members of Parliament and Ministers, to take into account the value of any personal benefits arising from entitlements to services.