Federal Members of Parliament Background
Following amendments to the Remuneration Tribunal Act 1973 (the Act), which took effect from 5 August 2011, any determination that the Tribunal makes in relation to members of parliament (including Ministers of State), concerning salary or other allowances or any matters that are significantly related, cannot be disallowed by the Parliament. However, the Tribunal is now required to provide a statement of reasons for each determination it makes in relation to parliamentarians.
Parliamentarians' base pay
From 1 January 2016 each Senator and Member of the House of Representatives is paid a base salary of $199,040 per annum. This figure was determined by the Remuneration Tribunal in Determination 2016/16 .
Prior to legislative change in 2011, contained in the Remuneration and Other Legislation Amendment Act 2011, the Tribunal did not directly determine parliamentary base salary (base salary is now the term used to describe the parliamentarians' 'allowance' that was established in section 48 of the Australian Constitution). Following those amendments to the Act which took effect from 5 August 2011, the Tribunal now has the responsibility to determine base pay for all members of parliament in both Houses. A brief history of how parliamentary pay has been set in the past is provided at A Brief History of Parliamentary Remuneration .
After the legislative changes the Tribunal conducted, with the assistance of an external consultant, a review of the work of members of parliament. The Tribunal announced its findings on 15 December 2011, in Review of the Remuneration of Members of Parliament - Initial Report .
The Government's consideration of this matter led to further amendments to the Act, via the Members of Parliament (Life Gold Pass) and Other legislation Amendment Act 2012, which received Royal Assent on 6 March 2012. Once the amendments came into effect, the Tribunal determined the matter of parliamentary base salary and additional salaries, which it did with effect from 15 March 2012.
As part of the Tribunal's 2015 annual review of remuneration, the parliamentary base salary was increased by the same percentage annual adjustment (2%) that applied to public offices in the Tribunal's determinative jurisdiction with effect from 1 January 2016.
Additional salary for Ministers and Parliamentary Office Holders
The Tribunal is required to report to Government annually on the additional salary payable to Ministers (sub-section 6(1) of the Act). Under the Constitution, the salaries of Ministers are a matter for decision by Executive Government, and do not require legislative action for implementation. The Ministers of State Act 1952, as amended, makes provisions for an annual appropriation which is apportioned in annual salaries to the Prime Minister, Deputy Prime Minister, Treasurer, Leader of the Government in the Senate, Leader of the House, other Ministers and Parliamentary Secretaries.
Parliamentary Office Holders include the Leader and Deputy Leader of the Opposition, the President of the Senate and Speaker of the House of Representatives, Whips and Deputy Whips, the Chairs of a range of parliamentary committees and commencing 15 March 2012, Shadow Ministers. There is a limitation on the number of Opposition members who can be paid as shadow ministers - to match the number of actual Ministers. Determination 2016/16 is the Tribunal's current determination on Parliamentary Office Holders' additional salary.
Additional salary for both Ministers and office holders is expressed as a percentage of the base salary, so that a person entitled to additional salary receives a combination of the base salary plus the percentage of base salary specified for his or her office(s).
The amendments to the Act of August 2011 and March 2012 enable the Tribunal to determine a portion of the base salary and any additional salary that is not allowance by way of salary (or in simple terms, salary for superannuation) for those parliamentarians covered by the Parliamentary Contributory Superannuation Act 1948 .
The Tribunal has determined the portion of base salary that will not count for 1948 Act superannuation purposes to be $41,540, meaning that a parliamentarian who is a member of the 1948 scheme receives $199,040 as base salary, but his/her notional salary for superannuation purposes is $157,500. The figure of $157,500 also is the figure used to calculate the basic pensions of any retired members entitled to a pension under the 1948 scheme.
The Tribunal has also determined that the portion of additional salary is 20%. This means that if a member of the 1948 scheme was being paid 16% additional salary, or $31,846 per annum, the component of their superannuation salary relating to their additional salary would be that figure less 20%, or $25,477.
The portions only apply to members of the 1948 scheme. For a member of the 2004 parliamentary superannuation scheme, established by the Parliamentary Superannuation Act 2004, which is an accumulation rather than a defined benefits scheme, the parliamentarian's superannuation salary is the same as his/her actual base and additional salary.
Parliamentarians' allowances and entitlements
The Act provides the Tribunal with the power to determine a range of allowances and entitlements for Senators and Members of the Parliament of Australia, including Ministers (sub-sections 7(1), 7(2) and 7(4)). However, the Tribunal does not determine the entire range of provisions that are made for Federal parliamentarians. Other relevant pieces of legislation include the Ministers of State Act 1952, the Parliamentary Entitlements Act 1990, the Members of Parliament (Life Gold Pass) Act 2002, the Members of Parliament (Staff) Act 1984, and the superannuation Acts.
The principal Tribunal determinations (as amended) governing parliamentarians' allowances and entitlements are:
- Determination 2016/08 Members of Parliament - Travelling Allowance
The major allowances determined by the Tribunal include travelling allowance rates and travel-related provisions (eg travel on scheduled domestic flights, car transport, private plated vehicle and charter allowance), electorate allowance, qualifying periods for Life Gold Pass, post retirement travel (for those not qualifying for Life Gold Pass), and certain office facilities. Under the Act, the Tribunal is required to review parliamentarians salary and allowances at least annually.
Parliamentary Library Reports
- The Parliamentary Retiring Allowances Act 1948: Debates, Committee Reports, Remuneration Tribunal Reviews and a Chronology of Legislative Amendments
- Parliamentary Library - The base salary for senators and members
- Parliamentary remuneration and entitlements
- Remuneration of Members of the Parliament of Australia
- Superannuation benefits for senators and members elected before 2004
- The annual allowance for senators and members