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2004 Report

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ANNUAL REPORT AND DETERMINATION OF ADDITIONAL

ENTITLEMENTS FOR MEMBERS OF THE PARLIAMENT OF

NEW SOUTH WALES

by the

PARLIAMENTARY REMUNERATION TRIBUNAL

pursuant to the

Parliamentary Remuneration Act 1989

24 JUNE 2004

PARLIAMENTARY REMUNERATION ACT 1989

REPORT PURSUANT TO SECTION 13(1) OF THE ACT

1. INTRODUCTION

Section 11 of the Parliamentary Remuneration Tribunal Act 1989 ("the Act") prescribes that the Parliamentary Remuneration Tribunal ("the Tribunal") shall make an annual Determination as to the additional entitlements for Members and Recognised Office Holders (as defined under the Act) on or before 1 June in each year or on such later date as the President of the Industrial Relations Commission of New South Wales determines.

Section 13 (1) of the Act requires that the Tribunal make a report to the President of the Industrial Relations Commission of New South Wales for each Determination made by the Tribunal. The President is then required, as soon as practicable after receipt of the report, to forward it to the Minister (see section 13(2)).

On 1 April 2004 the Tribunal commenced proceedings in relation to the annual Determination required for the year 2004 by writing to all Members and inviting submissions. The Tribunal received submissions from the major political parties and some individual Members.

While there were a range of matters canvassed in the submissions the Tribunal does not intend to discuss all in their entirety. As has been the previous practice, the Tribunal has made changes to the Determination without the need for detailed separate reasons being provided. Such changes reflect, in general, minor wording changes to give greater consistency to the Determination.

The submissions have, however, also raised a number of substantive issues which, in the Tribunal's view, merit further consideration.

2. GENERAL MATTERS RAISED

Additional Entitlements for Shadow Ministers

The Tribunal has received representations from Members of the major Opposition Parties for the reinstatement of additional entitlements for Shadow Ministers.

The Tribunal first determined additional entitlements for Shadow Ministers (being a specific class of Member) in its 2000 Annual Report and Determination. The provision of these additional entitlements followed in the 2001 and 2002 determinations. In 2003, however, following the receipt of advice from the Crown Solicitor, the Tribunal withdrew the provision of additional entitlements for Shadow Ministers. As outlined in the 2003 Report and Determination:

"the Tribunal sought the advice of the Crown Solicitor on the Tribunal's authority to determine additional entitlements for Shadow Ministers and clarification of those sections of the Act which would allow or prevent the Tribunal from determining additional entitlements for Shadow Ministers. This was necessary to ascertain exactly what the Tribunal's statutory powers were in determining additional entitlements for Shadow Ministers.

On 16 October 2002 the Crown Solicitor noted that section 10A of the Act provided for additional entitlements to facilitate the efficient performance of parliamentary duties by Members and Recognised Office Holders.

The Crown Solicitor concluded that the Tribunal could not determine additional entitlements for Shadow Ministers as they were not recognised Office Holders for the purposes of the Act. He also advised that the Tribunal could not determine additional entitlements for Shadow Ministers as Members because the duties performed by Shadow Ministers are not the parliamentary duties ordinarily performed by Members.

He stated that the safest course of action in providing additional entitlements is to include the `office' of Shadow Minister in Schedule 1 of the Act.

The Tribunal continues to support the provision of additional entitlements for Shadow Ministers. Shadow Ministers perform an important role in our system of government and, to perform this role properly, require sufficient resources and support.

The Tribunal notes that an amendment to the Act is required. The Tribunal notes that this is a matter for the Government and would recommend again that the Act be amended to allow for additional entitlements to be provided to Shadow Ministers.

Sydney Allowance

The Tribunal's 2003 annual review highlighted the need for a major review of the Sydney Allowance and its conditions of use. In its Report of 30 June 2003 the Tribunal noted that:

"It is clear to the Tribunal that the Sydney Allowance is in need of a fundamental review. All aspects of the Allowance require consideration from the quantum of the daily rate to whether the number of overnight stays - introduced in 1990 - need to be re-assessed in light of the work patterns of Members and Recognised Office Holders. The rules underpinning this entitlement will also need to be examined to ensure they are sufficient to meet the needs of Members and the Legislature. Finally, the Tribunal may also need to assess a definition of "principal place of residence" in connection with this entitlement."

Following the annual review the Tribunal wrote to the Premier on 3 October 2003 seeking a special reference to review the Sydney Allowance. The Premier, in his letter of 15 October 2003, agreed to the Tribunal's request and provided the Special Reference pursuant to section 12 of the Act.

The Tribunal wrote to those Members currently in receipt of the Sydney Allowance as well as the Presiding Officers and met with those who wished to discuss particular issues.

The Tribunal prepared a draft report and determination. On 8 April 2004 the Tribunal received a request from the Premier to defer the implementation of the Determination for a period of 12 months. The Premier has expressed his concern that with restrictions on expenditure being imposed in the public sector any potential increase in allowances to Members would run counter to the broad thrust of budget restraint.

The Tribunal considered the Premier's request carefully and agreed to defer making the determination for a period of 12 months. This means that the determination on the Sydney Allowance will not be made until March 2005. The Tribunal will write to Members nearer the time of the completion of this review to determine whether there are any additional matters to be put to the Tribunal for consideration.

Rulings of the Tribunal

One Member has requested that the Tribunal make a Ruling relating to the Member's use of particular additional entitlements. Section 17A of the Act provides that only the President of the Legislative Council or the Speaker of the Legislative Assembly may request the Tribunal to give a ruling on the interpretation or application of a determination. The Tribunal has not received a request from the Presiding Officers in relation to the matters raised by the Member in question.

The Parliament is responsible for the administration of additional entitlements in a manner consistent with the guidelines and general conditions outlined in the Tribunal's determination. It is the role of the Parliament to determine whether or not a Member should receive specific additional entitlements on a case by case basis, and based on the conditions determined by the Tribunal.

Publication of Members' Additional Entitlements

The Premier has written to the Tribunal referring to the recommendation made by the Auditor-General in his Report to Parliament 2004 (Volume One) that Members' expenditure be published.

The Auditor-General considers that the publication of individual Members' spending of each additional entitlement would increase transparency and accountability to the NSW public. He also recommends that the financial report should be tabled in the Parliament each year. The Tribunal has also received a submission, as part of the annual review process, in support of the Auditor General's proposed changes.

While the Auditor General's recommendation has merit the Tribunal notes that its determination already contains a significant amount of information to inform Members and the public on the range and level of additional entitlements available to Members of Parliament. The Logistic Support Allocation, Sydney Allowance and Electoral Allowance entitlements provide maximum amounts against which Members can expend.

In addition to the dollar value of these entitlements, the Determination provides definitions and guidelines to assist members in the use of these entitlements. Members may not exceed these entitlements, and with the exception of the Electoral Allowance, are required to reimburse to the Parliament any unspent portion.

The Tribunal would support the Auditor General's recommendations but does not consider that it should make a determination on this issue at this time. At this stage it should be a matter for the Presiding Officers. The Tribunal is however, willing to further consider this issue during the 2005 annual review. Submissions outlining additional information or concerns from the Auditor General and Members would be welcome at that time.

Definitions

The Tribunal's determination does not prescribe a definition of spouse, de facto or approved relative in the context of additional entitlements. Members are currently entitled to use their Logistic Support Allocation to make appropriate travel arrangements for their spouse, de facto or approved relative. Any such travel must be undertaken in connection with a Members' parliamentary duties.

The Tribunal has become aware that inconsistencies exist between the definition of spouse, de facto or approved relative contained in guidelines provided by the Legislative Council and the Legislative Assembly. The Tribunal is concerned that these differences may lead to confusion or abuse of entitlements.

The Tribunal has examined the current definitions and has determined an appropriate definition for use in the context of Members' additional entitlements. That definition is included in the Determination.

REVIEW OF ADDITIONAL ENTITLEMENTS

Electoral Allowance

The Tribunal has received a number of submissions seeking adjustments to the Electoral Allowance in line with movements in the Consumer Price Index (CPI). This method is consistent with the Tribunal's approach to adjusting this allowance in recent years. For this review the Tribunal has considered movements in the CPI and other economic indicators and has determined that the Electoral Allowance will increase by 3 per cent.

Sydney Allowance

As previously discussed in the report, the Tribunal has undertaken a review of the Sydney Allowance. At the request of the Premier the Tribunal has deferred the making of the determination until March 2005. Prior to making its determination the Tribunal will again consider any matters relevant to the review. In the mean time the Tribunal will adjust the allowance in line with movements in the CPI and other economic indicators, i.e. 3 percent.

Logistic Support Allocation (LSA)

The Tribunal introduced the LSA in 2000 as a means of grouping a broad range of entitlements formerly available to Members in various forms. To simplify these entitlements the Tribunal determined a monetary value for each entitlement and grouped them into four broad areas of activity. Each Member was allocated an LSA account to which various expenditures incurred under the four broad areas would be debited.

LSA budgets were based on electorate Groupings for the Legislative Assembly and Zones for the Legislative Council. Budgets were based on actual expenditure figures obtained from the Legislature.

Members are given the flexibility to use the LSA to meet their particular needs in the performance of their parliamentary duties. Members are able to carry forward unspent entitlements and may manage the funds as they deem appropriate. Accountability and transparency in the use of the LSA are provided through the rules imposed by the Tribunal including an annual audit requirement.

A number of submissions again raise the issue of approved items which may be expended from the LSA. The Tribunal provides a list of items which may be funded from a Member's LSA which it does not intend to add to at this time. As outlined in the 2003 Determination, the Presiding Officers may exercise their discretion in permitting expenditure for items not on the "List".

Another submission seeks an increase in the communication non-electronic component of the LSA for Members of the Legislative Council to reflect increased postage costs and in recognition that these members are not eligible to receive the Electoral Mailout Account.

In the Tribunal's initial determination the communication - non-electronic component was, for the most part, based on the actual number of stamps Members' received. This allowance has increased steadily since that time as demonstrated in the following table:


	Communication - non-electronic
	Legislative Assembly	Legislative Council
1999 Initial Determination	$9,400	$2,800
2000 Annual Determination	$11,000	$2,800
2001 Annual Determination	$11,770	$3,000
2002 Annual Determination	$11,770	$3,000
2003 Annual Determination	$12,170	$3,100

The cost of standard postage was increased by 5 cents or 11 percent in January 2002. As indicated above the Tribunal has provided an equivalent increase in the communication - non- electronic component of the LSA since the scheme was first introduced in 2000. The Tribunal does not consider that any further increase is warranted in the communication non-electronic component of the LSA.

The Tribunal provided an increase of 3.4 percent in the LSA for the 2003 annual review. On this occasion the Tribunal will adjust the allowance in line with movements in the CPI and other economic indicators, i.e. 3 percent.

Committee Allowance

The purpose of this Allowance is to remunerate Members servings as Chairpersons on Committees for the extra time and effort required to carry out this role. In previous Determinations this allowance has been increased in line with Members' salary increases.

Member's salaries were increased from 1 July 2003 by 4 percent. In accordance with normal practice, therefore, the Committee Allowance will be increased by 4 percent.

Reimbursement of Expenses for Charter Transport for Members of the Legislative Assembly

Electorate charter transport allowances for Members of the Legislative Assembly were reviewed in 2002 when the Tribunal provided for an increase of 15 percent. No further increase was provided in 2003. This year, in response to submissions received, the Tribunal has undertaken a review of these costs.

As part of this review, the Tribunal has undertaken a survey of fees charged by air charter transport operators. The results of the survey indicate that since 2002 fees have increased by approximately 8 percent. Air charter operators have attributed the increase to increased fuel, insurance and landing costs. Having regard to the above, the Tribunal has determined that an increase of 8 percent in the maximum amount reimbursable for charter transport for members of the Legislative Assembly. Actual amounts and conditions applying in respect of charter transport allowances are specified in the annual determination.

In addition, the Tribunal has considered a request to amend condition 5 of the Charter Transport Allowance guidelines. Currently, the Determination provides that where the only source of available charter transport is outside the boundaries of the electorate, the reasonable additional expenses consequently incurred may be included in the reimbursement available under this determination.

The Tribunal has now been advised that in certain circumstances, while charter transport services may exist within an eligible member's electorate, these may not necessarily be the most convenient for the eligible member to use.

The Tribunal considers that, especially in the larger rural electorates where members are often required to travel long distances, a members should be able to access their closest charter transport provider whether that be located inside or outside of their electorate. As such, the Tribunal has agreed to amend condition 5 of the Charter Transport Allowance to allow a member to use the closest charter transport provider to his/her electorate office or principal place of residence.

Travelling Allowances for Recognised Office Holders

The Tribunal has undertaken a review of the travelling allowances paid to Recognised Office Holders. The Tribunal's Determination is based on those rates provided to NSW Public Servants and those deemed "reasonable" by the Australian Taxation Office (ATO). In both the NSW Public Sector and ATO guidelines, travel allowances are differentiated on the basis of destination and salary level of officer.

In previous determinations the Tribunal has classified Recognised Office Holders into one of three groups for the purpose of providing travelling allowances. These groupings have been amended to ensure compatibility with guidelines applicable in the NSW Public Sector. Based on those guidelines, Recognised Office Holders and all Members fall within either Group One or Group Two for the purpose of determining allowances for travel. The Tribunal has made an appropriate adjustment to reflect these changes.

In addition, the Tribunal has included a number of Recognised Office Holders not previously listed in the Tribunal's determination. The list of Recognised Office Holders eligible to receive travelling allowances now reflects those Recognised Office Holders listed in Schedule 1 of the Act.

Recognised Office Holder and Other Member Entitlements

The Tribunal has received a number of submissions seeking changes to the additional allowances for recognised office holders and other member entitlements. These allowances are expressed as a percentage of each of the four components of the LSA and were originally calculated on the basis of actual additional entitlements provided to the various office holders i.e., number of stamps in addition to those provided to an ordinary member.

The Tribunal has made a small adjustment to the printing, stationery and office supplies component for a Party Leader (not less than 10 Members). This allowance has been increased from 20 percent to 40 percent to bring it in line with allowances provided to other equivalent office holders.

While the Tribunal has been asked to adjust these additional allowances for other recognised office holders, it has not received any details of additional costs incurred or any rationale to warrant such increases. In light of this the Tribunal has determined no further adjustments are to be made to these allowances at this time.

3. SUMMARY OF 2004 DETERMINATION

Electoral Allowance	3 percent increase
Sydney Allowance	3 percent increase
Logistic Support Allocation	3 percent increase
Electorate Mailout Account	No increase
Committee Allowance	4 percent increase
Electorate Charter Allowance	8 percent increase
Travel Allowances	Increase generally to public sector rates.

Dated this 24th day of June 2004

The Honourable Justice R Boland

THE PARLIAMENTARY REMUNERATION TRIBUNAL