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2005 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

29 JUNE 2005

PARLIAMENTARY REMUNERATION ACT 1989

REPORT PURSUANT TO SECTION 13(1) OF THE ACT

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 7 March 2005 the Tribunal commenced proceedings in relation to the annual Determination required for the year 2005 by writing to all Members and inviting submissions. The Tribunal received submissions from the major political parties, individual Members, the Presiding Officers, the Auditor General and the Commissioner, Independent Commission Against Corruption.

Part One of this report will outline general matters raised as part of the annual review and any adjustments to additional entitlements. In regard to the general review, the Tribunal has made changes that are considered minor or of an administrative nature to the Determination without the need for detailed separate reasons being provided. The submissions have, however, also raised a number of substantive issues which, in the Tribunal's view, merit further consideration.

Part Two of the Report will comprise the Tribunal's review of the Sydney Allowance. The Tribunal's Sydney Allowance Special Reference has now been completed, in accordance with section 12 of the Act, and incorporated into the 2005 Annual Report and Determination

A summary of the 2005 Determination will appear at the end of the Report.

PART ONE

1. GENERAL MATTERS RAISED

Additional Entitlements for Shadow Ministers

The Tribunal has heard representations from Members of the Liberal and National Parties for the reinstatement of additional entitlements for Shadow Ministers.

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. While this is a matter for the Government, the Tribunal would recommend again that the Act be amended to allow for additional entitlements to be provided to Shadow Ministers.

Publication of Members' Additional Entitlements

The Auditor-General in his Report to Parliament 2005 again recommended that Members' expenditure be published. As with the 2004 Report the Auditor-General considers that the publication of individual Members' spending of additional entitlements would increase transparency and accountability to the NSW public.

The Tribunal considered this matter as part of the 2004 annual review and found that the information available to both Members and the public in regard to additional entitlements was adequate. The Tribunal did indicate, however, that it was willing to further consider the issue during the 2005 annual review and welcomed submissions from the Auditor General and members in regard to this matter.

The Tribunal has received one submission in regard to the publication of members' expenditure from the Electorate Allowance. No submission has been received from the Auditor General in regard to this matter.

Based on the information provided the Tribunal remains of the view that the publication of individual Members' spending of additional entitlements, including the electoral allowance, is not necessary. Sufficient guidelines are provided to Members to encourage transparency and accountability to the NSW public.

Definitions

In March 2005, following a request from the Presiding Officers, the Tribunal made a Ruling in regard to the definition of the "approved relative". The previous definition implied that members with either a de facto spouse or partner could nominate either that person or another member of the immediate family as their approved relative. As this was not the intention of the Tribunal the definition has been amended to provide that where a member has a spouse or de facto spouse or partner, then entitlements are not available to any other person.

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) having particular regard to the high cost of fuel. The submissions sought an increase beyond the general CPI for this purpose.

While the Tribunal accepts that fuel costs have risen the Tribunal does not believe that it should pick and choose components of the CPI when determining a general increase. While motor vehicle costs are, for most Members, a significant component of the electoral allowance there are a range of other expenses included as well. For this review the Tribunal has adopted its standard approach and increased electoral allowance by the general CPI increase of 2.4 per cent.

Sydney Allowance

The Tribunal's review of the Sydney Allowance is contained in Part 2 of this report.

Logistic Support Allocation (LSA)

The Tribunal determines a list of items which may be funded from a Member's LSA. Based on the submission received from the Presiding Officers, the Tribunal has amended this list to broaden the number of electronic communication services which can be provided to Members and funded from this account. Broadband packaging now means that Members can bundle a range of telecommunication services (telephone, internet, fax) on the one line with one fee including rental. For administrative simplicity, home telephone rental costs have been incorporated into the LSA for Members of the Legislative Assembly and Legislative Council. Members can also use the LSA for internet and broadband access fees for official business. In doing so, Members may be able to make savings by combining more than one electronic communication service. Members of the Legislative Council who choose not to or cannot connect to Broadband services can continue to have their data line reimbursed at the rate of 100%.

For the 2005 review the Tribunal has provided an increase of 3.5% to the LSA. This amount comprises an adjustment in line with the CPI ie., 2.4% and an additional sum to cover additional expenses in the electronic communication component of the LSA.

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 2004 by 3.92 percent. In accordance with normal practice, therefore, the Committee Allowance will be increased by 3.92 percent.

Electorate Mail-out Account (EMA)

The EMA has been adjusted to reflect recent enrolment statistics. In addition, a number of changes to the conditions have been made to address comments made by the Audit Office of NSW. The Tribunal endorses the Parliament's administrative guidelines in regard to the use of the EMA.

The Tribunal received one submission from a political party in the Legislative Council seeking the abolition of the EMA. The EMA is provided to all Members of the Legislative Assembly for the express purpose of communicating with their constituents. The Tribunal can see no reason why the EMA should be abolished. The costs associated with the EMA are listed in the Determination. The money is not provided to Members, but rather Members expend money against the total amount. The Tribunal is informed that the content of the newsletters is reviewed by the Clerk of the Legislative Assembly to ensure it complies with the conditions.

The Tribunal has also received correspondence from the ICAC regarding the conditions applicable to the EMA. The Commission is concerned that the EMA could be misused by Members and considers that an additional condition be included which states that the EMA must not be used for electioneering or political campaigning.

The Tribunal has considered this matter carefully but is not convinced that such a condition is warranted. It should be noted that the Tribunal's Guidelines clearly state that additional entitlements are provided to facilitate the efficient performance of parliamentary duties but that such duties exclude activities in the nature of direct electioneering or campaigning. The Tribunal is also aware that prior to publication of the newsletters to constituents Members are required to have the contents checked by the Clerk of the Legislative Assembly to ensure the above guidelines are not breached.

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

In 2004 the Tribunal amended the provisions of the Charter Transport Allowance to enable eligible members to be able to access their closest charter transport provider whether that be located inside or outside of their electorate for travel within the Members' electorate. Further flexibility is now sought for the use of this entitlement.

Firstly, an amendment is sought to enable members to use their Charter Transport Allowance to attend regional meetings held outside their electorate. An example being where a government department arranges a meeting at a large regional centre and Members of Parliament from surrounding electorates are invited to attend. The Tribunal considers that the use of the entitlement in this manner is appropriate. Members should first seek approval to use this allowance to attend such meetings from the Presiding Officers. Members should be able to satisfy the Presiding Officers that the purpose of the journey relates to electorate business.

Secondly, an amendment has been sought to allow Members to use their Charter Transport Allowance to fly to an airfield located outside their electorate in circumstances where there is no suitable airfield located in the part of the electorate being visited by the Member. In these circumstances, the Tribunal determines that the Member, rather than drive long distance, flies to the relevant airfield outside his/her electorate and then drives back to the electorate to conduct electorate business.

Electorate to Sydney Travel Warrants

Approval has been sought to extend the use of travel warrants to travel to adjoining electorates to connect to flights to and from Sydney where such services are more frequent. In doing so, Members have sought to extend the value of the warrant to include the cost of travel to and from the airport. For example, one warrant would be used to fund hire car costs for travel from the Members home to the airport and the price of a commercial flight to Sydney.

Under current arrangements Members are provided with warrants to travel to and from Sydney and their electorate/principal place of residence. The warrant covers the cost of air travel or the equivalent private/rental vehicle costs. If a Member is required to travel to an airport some distance from their home, any additional costs ie hire car/taxi/car parking must be paid from either the Members' LSA or Electoral Allowance. It has also been suggested that Members in receipt of the Charter Transport Allowance use this allowance to pay for these additional costs.

At this time the Tribunal considers it appropriate that Members continue to use either their LSA or Electoral Allowance to fund any additional costs associated with electorate to Sydney travel. The Tribunal would be interested in receiving further information in regard to this issue for the 2006 annual review.

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.

Staff

The Tribunal has received a number of submissions in regard to the level of staffing provided to Members. Concern has been expressed that the number of staff employed in electorate offices is insufficient given the increased workloads and demands placed on these staff. Additionally the Tribunal has also received submissions that staffing for Recognised Office Holders, in particular the Whips, is inadequate.

Rather than make a determination at this time the Tribunal would prefer to consider the whole matter of staffing more fully. In this regard, the Tribunal intends to undertake a thorough review of the allocation of staff to all Members. On completion of the annual review the Tribunal will write to the Premier seeking a special reference to review all aspects of the allocation of staff. The Tribunal will seek further information from both Members and the Parliament at that time.

PART TWO - SYDNEY ALLOWANCE REVIEW

1. INTRODUCTION

The Tribunal, in its 2003 Annual Report highlighted the need for a major review of the Sydney Allowance. At the Tribunal's request, the Premier, the Hon Bob Carr MP, on 15 October 2003 issued a Special Reference pursuant to section 12 of the Parliamentary Remuneration Tribunal Act 1989 ("the Act") to review the Sydney Allowance. Section 12 of the Act provides that:

"(1)

The Minister may direct that a special determination be made as regards additional entitlements.

(2)

Such a direction:

(a)

may relate to all or any additional entitlements or to any class of them, and

(b)

may relate to all or any individual members and recognised office holders or to any class of them.

(3)

A special determination is to be made by such time as the Minister directs and is to take effect from such time as the Tribunal specifies in the determination."

Prior to making its Report and Determination the Premier, in April 2004, wrote to the Tribunal advising of expenditure restrictions being imposed on the public sector and seeking the Tribunal's concurrence to defer making the determination for 12 months. The Tribunal agreed to the Premier's request. The Premier extended the completion date of the Sydney Allowance review to 31 March 2005.

In February 2005 the Tribunal wrote to the Premier seeking a further extension to 31 May 2005 - coinciding with the completion of the Tribunal's annual review of Members' entitlements - to allow the Tribunal sufficient time to consult and examine more closely recommendations arising from the ICAC's Report on the investigation into the conduct of the Hon Peter Breen MLC (the Breen Report). The Premier agreed to this request.

As a result, the Sydney Allowance Special Reference now forms part of the Tribunal's 2005 annual report and determination into Members' additional entitlements.

2. REVIEW

The Tribunal in October 2003 wrote to those Members currently in receipt of the Sydney Allowance as well as the Presiding Officers and the Auditor General. These matters were investigated in March 2004.

In March 2005 the Tribunal again wrote to those members and Presiding Officers seeking any additional comments and, in particular, any specific matters relating to the definition of `principal place of residence' the Tribunal should consider. The Tribunal also wrote to the Auditor General and the Independent Commission Against Corruption (ICAC) seeking any views on matters the Tribunal should consider in developing a definition of `principal place of residence'.

Matters arising from March 2004 review

The Tribunal received responses from the major parties, the Auditor General and some Members. The Presiding Officers, the administrators of the scheme, advised that they would not be making a submission but did give the Tribunal permission to obtain information from parliamentary officers.

The issues canvassed in the submissions requiring consideration were:

(i)

Whether the current number of overnight stays in Sydney is adequate for Members to carry out their parliamentary duties?

(ii)

Whether the daily rate is sufficient for Members to meet the cost of commercial accommodation, rents or mortgages on properties acquired as a result of having to spend a significant amount of time in Sydney on parliamentary duties?

(iii)

Whether the repayment provisions of the Annual Sydney Allowance should be removed thus restoring the annual entitlement to previous arrangements?

(iv)

Whether the Tribunal should develop a definition of `principal place of residence'?

Matters arising from the March 2005 Review.

Submissions concerning various aspects of the Sydney Allowance were again received from the major parties, the Greens, the Auditor General and the ICAC. Most submissions confirmed issues raised as part of the 2004 review. Additional matters for consideration were the possible inclusion of Penrith as an eligible electorate for Sydney Allowance purposes and as well some procedural issues.

Submissions regarding principal place of residence included the suggestion that a time limit be imposed before Members relocating from Sydney to a non metropolitan location are eligible to receive Sydney Allowance. Another suggestion was the retention of the existing Election Form and Administrative Guidelines issued by the Parliament.

The Audit Office considers that the Tribunal should adopt a principle based approach when considering `principal place of residence.' The ICAC advised that it had commented on this matter in the Breen Report and had no further comments to make. The Presiding Officers made no submission to the Tribunal on this matter.

The Tribunal also met with the representatives from the major parties and wishes to place on record its appreciation to those Members, party representatives and officers of the Parliament who have provided information to the Tribunal.

3. HISTORICAL BACKGROUND

1975 to 1990

The decision to grant the Sydney Allowance (or, as it was previously known, "Special Expenses (Living Away from Home) Allowances") predates the creation of the Tribunal. Special expense allowances as fixed annual rates were first introduced for country Members of the Legislative Assembly, including Ministers and other Office Holders, on 1 July 1975 pursuant to the Parliamentary Allowances Salaries (Amendment) Act 1975. In his Second Reading Speech the then Premier and Treasurer, the Hon Mr Tom Lewis MP, stated the rationale for introducing this allowance in the following terms:

"The Government has given consideration to the difficulties of Members and Ministers representing outlying electorates who are involved in substantial additional expenditure because of the need for them to be away from their homes regularly to attend Parliament or for other Parliamentary duties."

Prior to 1975 there was no specific provision to assist Members of the Legislative Assembly with living away from home expenses. Members of the Legislative Council, however, were provided with a daily "living away from home" allowance presumably in recognition of the relatively low level of remuneration Members of the Legislative Council received at the time. Ministers in the Legislative Council who resided in country electorates were entitled to the annual rate of allowance.

The Tribunal first considered special expense allowances in its report and determination of 3 November 1975 where it was decided to maintain the existing structure of the allowances. Members who resided in those electorates closest to Sydney received a lower allowance than those residing in electorates further away from Sydney. The Tribunal was later to distinguish these electorates as Category 1 and Category 2 electorates. Category 1 electorates were those electorates which were far enough away from Parliament House to require an overnight stay in Sydney particularly when Parliament is sitting. Unlike Members living in the more remote Category 2 electorates, the Category 1 Members do not need to spend Monday nights and/or Thursday nights in Sydney. For this reason Category 1 Members received a lower annual entitlement.

In 1979 the Tribunal removed the distinction between annual "special expense allowances" payable to Members of the Legislative Assembly and daily "living away from home allowances" paid to Members of the Legislative Council. All Members received the annual rate (although the rates between the Legislative Council and Legislative Assembly differed).

At that time it was calculated that the Special Expenses Allowance was equivalent to:

61 days (Category 1 Electorate Members)

76 days (Category 2 Electorate Members)

92 days (Ministers and other Recognised Office Holders)

The Tribunal was satisfied that Members of the Legislative Assembly received the Allowance for purposes other than for sittings of Parliament. In 1978 Members of the Legislative Assembly's allowance equated to 76 days (Parliament sat for 49 days) whereas the Legislative Council received the allowance for actual sittings of Parliament (43 days plus any other visits to Sydney to attend meetings of Joint or Select Committees). The Tribunal set the rate for Legislative Council Members at 90 per cent of the rate for Legislative Assembly Members.

In 1985 the Tribunal determined that the rates for Members of both Houses should be equal. During this time the calculation of the rate was based predominantly on the changes to the costs of living (CPI), rental accommodation costs, etc., and the annual rate increased accordingly.

The purpose of the allowance, as stated by the Tribunal in its various reports over the years, has been to assist Members with the cost of overnight accommodation whilst in Sydney or whilst in transit to and from Sydney. For this reason the Tribunal determined that this allowance would not apply to those Members who were accommodated at Parliament House.

Because country Members would be spending a considerable amount of time in Sydney it was expected that they would make longer term accommodation arrangements at presumably cheaper rates. Indeed, in 1979 the Tribunal noted that:

"... it appears that it was envisaged that the Members would rent or buy permanent accommodation rather than stay at hotels and the allowance may have been pitched below the likely hotel, motel charges for this reason."

Consistent with this assessment the rate of this allowance has consistently been struck at a significantly lower rate than the normal capital city travelling allowance rate available to public servants where the full cost of commercial and/or hotel/motel accommodation is included. The Federal and other State/Territory Remuneration Tribunals also adopt this approach.

1990

In July 1990 the Tribunal wrote to the then Premier, the Hon Nick Greiner, seeking a special reference to review the allowance. On 26 October 1990 the Tribunal determined that living away from home allowance would only be provided to Members as a daily rate with a maximum number of overnight stays. It is understood that the Tribunal adopted this approach, in response to Members' submissions and to reflect practices in other states. The new daily rates were calculated on the basis that the total would be equivalent to the then annual rate (based on CPI increase).

This determination did not come into effect as the Premier did not direct a commencement date for this determination. The Premier sought a further review to examine whether Members could be provided with an option to receive the allowance either annually or daily. The Premier issued the Tribunal with another special reference to make a determination in regard to this matter by 31 March 1991. The matter was further reviewed and the Tribunal determined on 29 May 1991 that Members had the option to receive the allowance as either a daily rate or as an annual amount.

The Tribunal imposed an upper limit on the number of occasions when Members could claim the daily amount. Additional night stays were permitted and reimbursement of actual and reasonable expenses, but not exceeding the daily rate was permitted. Any reimbursement was subject to the production of accommodation and other expense receipts.

The annual rate was calculated by multiplying the number of determined overnight stays by the daily rate. Members were required to make an election when entering Parliament and that election remained in force for the life of the Parliament.

The Tribunal also set out the three circumstances under which the allowance was payable, namely:

Sittings of Parliament and travel to and from Parliament for such sittings.

Meetings of a Member's Parliamentary Committee and travel to and from Sydney to attend such meetings.

Other parliamentary business.

The Tribunal also introduced, within the overall number of days, a limit on the number of occasions Members could claim an overnight stay for `other parliamentary business'. This was expressed in brackets beside the number of overnight stays permitted, for example:

Office	Electorate/Residence	Overnight Stays p.a.
Minister, Speaker, President, Leader of the Opposition (Assembly and Council), Leader of Third Party in Assembly with not less than 10 Members.	Category 1 or 2	140 (50)
Deputy Speaker, Chairman of Committees in the Legislative Assembly and Chairman of Committees in the Legislative Council.	Category 1 or 2	120(25)
Parliamentary Secretary	Category 1	90(25)
Parliamentary Secretary	Category 2	120(25)
Other Assembly/Council Members	Category 1	90(25)
Other Assembly/Council Members	Category 2	120(25)

1995

In March 1995, the Special Expenses Allowance paid to the then Premier, the Hon John Fahey, was the subject of media reports. As the Premier and Member for Southern Highlands (a country electorate), Mr Fahey was receiving the annual Special Expenses Allowance of then $19,600. At the same time Mr Fahey also had access to and benefited from the Premier's apartment at the State Office Block. The apartment's utility, maintenance and related expenses were met by the State. On 13 March 1995 the Tribunal was asked to consider entitlement to, and discretionary use of, the Special Expense Allowance.

The Tribunal produced an advisory opinion (as opposed to a determination) on 15 March 1995. The advising addressed the general purpose of the allowance and considered whether the allowance's application was limited to accommodation. The Tribunal found that the purpose of the allowance was to reimburse Members for costs incurred in living away from home. The Allowance's application was not limited to accommodation. The opinion indicated that the payments to the former Premier had been in accordance with the scheme. (The allowance is for living away from home and not exclusively for accommodation, although this may be the major cost component).

The Tribunal also found that (par 14):

"the annual allowance is not affected by the nature of the accommodation used when the member is absent overnight from his/her home. For example it is immaterial under the determination as to whether the lodgings used for the overnight stay are a hotel, motel, flat, residence or a relative or friend etc."

In the Auditor General's report to Parliament for 1995 (Volume 2, pp 21-26) the Auditor General undertook a special review of the Special Expenses Allowances. That review discussed the situation associated with Mr Fahey's case and the PRT's response to the matter. The Auditor General recommended that the Tribunal or the Government might wish to consider the appropriateness of Ministers or other Members of Parliament receiving two benefits for the one purpose.

In 1995 the Tribunal increased the number of occasions the allowance could be claimed for `other parliamentary business' from 25 occasions to 35 occasions. The overall number of overnight stays remained the same.

In the 1996 annual report the Tribunal referred to the comments made by the Auditor General and undertook to review these matters during the 1997 annual review. This matter was then considered during the 1997 review when the Tribunal determined that Members who claimed the allowance were to certify that whilst in Sydney and in receipt of the allowance they were not utilising government owned or government funded accommodation. If the government funded accommodation was used during the course of the year the Members were required to undertake to repay to the Legislature a proportional amount of the allowance for each such occasion.

The structure of the "special expense allowances" payable to Members remained largely unchanged until the Tribunal's first determination following the 1998 amendments to the Act. This determination was called the Initial Determination.

1999 - 2003

In the Initial Determination the Tribunal introduced the new name of "the Sydney Allowance" to more clearly reflect the nature of the allowance. Members continued to receive the Sydney Allowance towards the costs associated with living away from home whilst in Sydney on parliamentary business or in transit to and from Sydney. In 1999 the Initial Determination retained the number of overnight stays but removed the limit on the number of occasions that could be claimed for other parliamentary business.

In 2001, at the request of the Legislature, the Tribunal amended the conditions by providing that Members in receipt of the daily allowance who exceeded the number of overnight stays would need to substantiate each such occasion.

The new scheme retained a Member's discretion as to how this allowance was expended provided always that it was used to meet the additional costs associated with travelling to and staying in Sydney for sittings of Parliament, participation in Parliamentary Committees or other parliamentary business.

The option of choosing between the daily and annual equivalent was retained.

Daily Allowance

Where a Member chose to receive the daily rate of allowance, the Member was not required to substantiate to the Parliament expenses up to the daily rate. Where daily costs exceeded the daily rate, full substantiation was required for each such occasion.

The daily rate was provided for a specified number of days per annum. When Members' stays exceeded the annual maximum limit they could claim additional days upon certification to the Parliament.

Annual Allowance

When in receipt of the annual allowance Members were required to certify at the end of the financial year the number of occasions they were in Sydney and that on each occasion the stay was for parliamentary business.

Those in receipt of the annual allowance also needed to retain such documentary evidence. Those Members whose overnight stays were less than the number provided for by the annual allowance were required to reimburse the difference to Parliament for the re-credit of the Consolidated Fund. Members were not required to acquit the daily rate of expenditure.

Irrespective of which allowance was received, Members had to substantiate the receipt of this entitlement. In addition to certifying the purpose of the visit to Sydney, it was necessary for Members to retain boarding passes or other documentary evidence for the occasions they were staying in Sydney for parliamentary business.

The Tribunal required that the Sydney Allowance be audited annually for compliance. In addition to any internal audit conducted by the Parliament, the Sydney Allowance was to be the subject of an external audit conducted by the Auditor-General of NSW.

Current entitlement

Approximately 50 percent of Members receive the Sydney Allowance.

The Tribunal determines the Sydney Allowance annually. In 2004 for the purpose of this allowance, the non-metropolitan electorates (Groups 2-8) were divided into two categories based on distance from Sydney. Members whose principal place of residence was in either Category 1 or Category 2 electorates, as specified in Schedule 2 of the determination, were eligible to receive the Sydney Allowance.

2004 Determination

	Residence	Daily Rate			Annual amount
	Residence	Overnight Stays p.a.	Overnight in Sydney	Overnight in Transit to and from Sydney	Annual amount
Minister, Speaker, President, Leader of the Opposition (Assembly and Council), Leader of Third Party in Assembly with not less than 10 Members.	Category 1 or 2	140	$180	$139	$24,500
Deputy Speaker, Chairman of Committees in the Legislative Assembly and Chairman of Committees in the Legislative Council.	Category 1 or 2	120	$180	$139	$21,000
Parliamentary Secretary/Shadow Minister	Category 1	90	$180	$139	$15,750
	Category 2	120	$180	$139	$21,000
Other Assembly/Council Members	Category 1	90	$180	$139	$15,750
	Category 2	120	$180	$139	$21,000

4. MATTERS FOR CONSIDERATION

Retention of the Annual Allowance

Submissions to the Tribunal from the major political parties have sought a return to the former arrangements whereby the annual Sydney Allowance is retained by Members and acquitted to the Australian Taxation Office ("ATO"). This, it was argued, would provide administrative simplicity for both Members and the Legislature. As a result of the repayment provisions more and more Members were electing to receive the daily rate because it was simpler and because Members were able to claim for the actual number of days in Sydney even if they exceeded the number determined by the Tribunal.

It was further put to the Tribunal that the allowance should not only recognise the costs associated with living and staying in Sydney but also for the dislocation factor requiring Members to be away from their families for a significant period of time each year on parliamentary duties.

The Clerks of the Parliament have provided the Tribunal with data showing Members' election patterns for the Sydney Allowance for those years where figures are complete. These are set out hereunder.

Year*	Annual	Daily
1999/2000	59	8
2001/02	41	29
2003/04	26	43

*2002/03 was not used because it was an election year.

The figures above are very instructive. In 1999/2000 prior to the changes introduced by the Initial Determination, Members overwhelmingly elected to receive the annual allowance. Members in receipt of the annual allowance were able to retain the total amount advanced without substantiation. Expenditure was acquitted with the ATO.

The annual allowance was preferred because of its simplicity and because there was no requirement to acquit. Because it was paid monthly to Members it provided income over a twelve-month period which assisted those Members who had made annual rental/lease arrangements or had mortgaged properties.

The Tribunal has in the past determined either 90 or 120 nights per annum for ordinary Members to be in Sydney on parliamentary business as being reasonable (the number of overnight stays will be discussed below). This equates to approximately 3-4 months and because of House sitting patterns this 3-4 months is spread across an 11-month period each year.

Members have argued, and the Tribunal accepts, that it is difficult to rent properties regularly for this period of time. Most landlords would expect long term leases of at least 12 months and certainly not less than 6 months. Thus, while Members are provided with an annualised allowance which recognises that they will be in Sydney between 3-4 months of the year, those Members renting properties would need to pay rent for periods in excess of the amount provided.

A similar situation exists for those Members who purchase suitable accommodation near Parliament. Such Members are required to make monthly mortgage payments over a twelve-month period. In addition, such Members would have quarterly utility payments (gas, electricity, water) as well as strata levies.

The former annual arrangements provided a stream of income over a twelve-month period which assisted Members in meeting standing expenses on accommodation, irrespective of whether the Member was in Sydney.

The repayment provisions for the annual allowance were introduced in the Initial Determination which took effect on and from 1 January 2000. The decline in the number of Members electing to receive the annual allowance supports the views put to the Tribunal about the resultant lack of certainty as to the actual amount Members will ultimately receive in a 12-month period and the increased record keeping associated with the repayment provisions.

There were, however, clear reasons why the repayment provisions were introduced. These have to do with the 1998 Amendments to the Act and the subsequent legal advice provided by the Crown Solicitor which stated, if effect, that Members could not gain a private benefit from the additional entitlements provided under the legislation.

At the centre of the problem lies the question of the status of the unspent portion of the entitlement. The Tribunal in the 2000 Report and Determination discussed this matter at length. As part of that review the Tribunal asked the Crown Solicitor a number of questions regarding the obligations arising from the legislation concerning the unspent portions of entitlements. The relevant questions and the Crown Solicitor's answers are set out hereunder. They have been included because of their relevance to the Sydney Allowance.

The questions asked of the Crown Solicitor were:

Assuming no determination is made by the Tribunal requiring the repayment of the unused portion of an additional entitlement does the legislation by its own operation prevent members from retaining the unused portion of any additional entitlement (in particular the electoral allowance) or require the repayment or same.

Having regard to 1, does the legislation prevent the Tribunal from determining that the unused portion of an additional entitlement may be retained by a Member (for whatever reason).

Is there any impediment in the legislation to the Tribunal leaving silent or unanswered the question of the repayment of the unused portion of allowance in any further determination (if any is made).

The Crown Solicitors advice was as follows:

"1. Advice as to question 1

1.1 The Parliamentary Remuneration Act 1989 (the legislation) does not address the retention or repayment by members of the unused portion of any additional entitlement.

1.2 The legislation does make provision with respect to the reversion of payments of additional allowances (which I take it are additional entitlements in the form of allowances as referred to in s. 10(3)) not drawn upon by members. Section 15(6) provides that any payment of additional allowances to which a person is entitled under the legislation, or any part of any such payment, not drawn by the person or on the person's behalf within 28 days after the payment becomes due and payable reverts to the Treasury and becomes part of the Consolidated Fund.

1.3 The legislation is so drafted that it is open to the Tribunal to provide for what is to happen in relation to the unused proportion of an additional entitlement. A determination may fix conditions on which an additional entitlement is to be provided (and may specify the form of the substantiation (if any) that is required for particular kinds of additional entitlements) (s. 10(4)(a)). Additional allowances are payable in such manner, and subject to such provisions, as may be specified in a determination that is in force (s. 15(2)).

1.4 An additional entitlement is not paid as personal income (contrast statutory salaries and statutory additional salaries which s. 2A(1)(a) and (b) expressly recognise are paid as personal income). It is an entitlement determined by the Tribunal giving effect to the principle that it is provided for the purpose of facilitating the efficient performance of the parliamentary duties of members (s. 10(1)(a)). Members are only entitled to additional entitlements in accordance with the provisions of applicable determinations (s. 10(8)). As the statutory entitlement is to an allowance, service etc for the specific purpose of facilitating the performance of parliamentary duties, there was, presumably, seen to be no need for the legislation to make express provision precluding use for other purposes and providing for unexpended amounts. It would, of course, as I have said, be open for a determination to fix appropriate conditions to provide for what is to happen to amounts which are not expended by a member to facilitate the efficient performance of parliamentary duties. However, a member does not acquire an entitlement to use such amounts for some other purpose because a determination does not in fact fix conditions relating to unexpended amounts. A member who chooses to retain unexpended amounts and expend them for some other purpose would do so without any statutory entitlement and would be at risk of civil proceedings for recovery of such amounts and, in some circumstances, could commit a criminal offence in doing so.

2. Advice as to question 2.

2.1 In my opinion, the legislation does prevent the Tribunal from determining that the unused proportion of an additional entitlement may be retained by a member (for whatever reason). By this I take it you mean to ask whether the Tribunal may determine that an amount not expended to facilitate the efficient performance of parliamentary duties in accordance with a determination may be retained by a member and expended for some other purpose, including, presumably, a private purpose of the member.

2.2 At present, in making determinations, the Tribunal must give effect to the principle that additional entitlements are to be provided for the purpose of facilitating the efficient performance of the parliamentary duties of members (s. 10(1)(a)). As presently defined, "parliamentary duties" would not include private activities and such activities have not been prescribed to be parliamentary duties (whether a regulation could validly prescribe such activities to be parliamentary duties would be a matter for the Parliamentary Counsel to advise upon). Furthermore, as I have said, s. 2A(1) recognises that, unlike statutory salaries and statutory additional salaries, additional allowances and other entitlements are not "paid as personal income". That being the case, I consider that the legislation does prevent the Tribunal from determining that an amount not expended to facilitate the efficient performance of parliamentary duties in accordance with a determination may be retained and expended by the member for some other purpose.

3. Advice as to question 3

3.1 The legislation does not expressly require the Tribunal to make provision in a determination for the repayment of amounts not expended to facilitate the efficient performance of parliamentary duties in accordance with a determination. While it would be open to the Tribunal pursuant to s. 10(4)(a), as a matter of discretionary power, to fix appropriate conditions on which the additional entitlement is to be provided, the legislation appears to impose no obligation or duty upon the Tribunal to do so. As I have said, the fact that no such conditions are fixed does not alter the nature of the entitlement conferred upon a member.

In summary, the Crown Solicitor advised that the legislation, by itself, did not prevent Members from retaining the unspent portions of entitlements; the legislation did prevent the Tribunal from determining that the unspent portion of additional entitlements may be retained; and thirdly, that there was no impediment to the Tribunal leaving silent or unanswered the question of repayment of the unused portions of additional entitlements.

The Tribunal went on to discuss the implications of the Crown Solicitor's advice as well as submissions received on this issue as they related to the Electoral Allowance. The Tribunal concluded [p26]:

"The Crown Solicitor has made clear that the obligations which arise with respect to Members use of electoral allowances derives directly from the Act, without any requirement or particular need for the Tribunal to regulate the question by determination. Having regard to that opinion, and given the somewhat vexed legal issue arising in these proceedings there is much to be said for the Tribunal not providing any interpretation of the statute as may be ordinarily contemplated in proceedings for declaratory relief. Rather the statute itself will speak to the obligations of Members. The Tribunal should regulate allowances for Members by prescribing the circumstances under which the allowances may be used. The draft determination reflects such an approach. It is an approach which will ensure that any obligations as to repayment of the unspent portion of allowances falling on Members will be confined to those specifically deriving from the statute. The Tribunal did not intend in its initial determination, and will now avoid by this approach, any superimposed (and additional) obligations arising out of any determination made by the Tribunal over those created by statute (which may have the potential of creating unintended adverse consequences).

In these circumstances the conditions for the payment of electoral allowances have been reviewed and the allowances simply adjusted from its present levels having regard to the cost of living and any other relevant considerations (which considerations were discussed in the initial determination)."

To overcome the uncertainty regarding the unspent portion of the Electoral Allowance the Act was amended to provide that the Electoral Allowance was provided as compensation in respect of all incidents of the performance of parliamentary duties. Thus, it is clear that the Electoral Allowance may only be expended for purposes related to the performance of parliamentary duties.

Unlike the Electoral Allowance, the Sydney Allowance has a strictly limited purpose and that is to cover daily costs associated with staying in Sydney for parliamentary business. A reasonable daily rate is determined by the Tribunal from time to time to meet these costs. It is acknowledged that Members sacrifice a great deal in representing their constituents. Country Members even more so because of the amount of time they are required to spend in Sydney on parliamentary business. There may be grounds for liberalising the conditions associated with claiming the Sydney Allowance in the future and, indeed, some proposals in this regard were put to the Tribunal. However, given the current purpose of the Sydney Allowance, the need for strict accounting of the spending of public funds by Members and in the absence of any sound basis to do otherwise, the Tribunal considers that any unspent portion of the Sydney Allowance must be repaid.

Given that the Tribunal will require the repayment of the unspent portion of the annual Sydney Allowance and given that most Members entitled to the Allowance opt for the daily rate, the further question arises as to whether the Annual Allowance should be abolished.

That the Annual Allowance has lost its appeal is clear from the figures provided by the Legislature. It would have been desirable to have the views of the Presiding Officers on the extent of the administrative difficulties faced by the Legislature and any possible remedies which may assist them. It is unfortunate that they chose not to provide a submission for this Review.

Representatives from the major political parties advised the Tribunal of the administrative difficulties and the increased record keeping required of Members to comply with the repayment provisions of the Sydney Allowance.

The Auditor General articulated some of his findings in his submission to the Tribunal. These essentially mirror the findings contained in Volume 6 of the Auditor General's 2002 and Volume 1 of the 2004 Reports to Parliament in respect of the Sydney Allowance. These findings include:

Some Members fail to submit their certification for the Sydney Allowance within the timeframe specified by the Determination.
The Legislature returned a number of certifications to Members due to inadequate supporting documentation.
Some Members had difficulty determining their principal place of residence.
The Legislature and some Members experience difficulty in agreeing on any refund from members.

For the above reasons, the Legislature is unable to complete reconciliations and recoup overpayments of the Sydney Allowance on a timely basis. It should be noted that the most recent audit of the Sydney Allowance by the Auditor General reveals that on time reconciliations are improving (Auditor General's Report 2005 Volume 2)

It is clear from the above that the changes to the annual Sydney Allowance require a higher degree of record keeping and administrative diligence on the part of Members and the Legislature than was previously the case. This is understandable when the desired result is accountability and transparency.

The Tribunal does not believe that an entitlement should be abolished because it is difficult to administer or requires greater effort by Members and the Legislature to achieve administrative efficiency. The problems cited to the Tribunal are not insurmountable. The challenge for the administrators and the users of the scheme is to develop new policies and guidelines that will overcome the problems currently being experienced.

In addition, while the number of Members electing to take the annual entitlement has decreased significantly, 30 per cent of Members still prefer to receive this Allowance on an annual basis. These Members may have made long term commitments based on the genuine assumption that steady income from the Sydney Allowance would meet their particular needs. It would be inappropriate to remove these arrangements for no other reason than to overcome administrative obstacles.

The Tribunal, therefore, will retain the option for Members to receive the Allowance on an annual basis under existing arrangements. If the Legislation is amended these conditions will be reviewed at that time. As the Tribunal has stated in the past, it remains ready to assist the Legislature in minimising any potential problems associated with the administration of this or any other additional entitlement.

Number of overnight stays

Set out below is the current number of overnight stays that each Member or Recognised Office Holder is entitled to under the Sydney Allowance. They were set in 1990.

Office	Electorate/Residence	Overnight Stays p.a.
Minister, Speaker, President, Leader of the Opposition (Assembly and Council), Leader of Third Party in Assembly with not less than 10 Members.	Category 1 or 2	140
Deputy Speaker, Chairman of Committees in the Legislative Assembly and Chairman of Committees in the Legislative Council.	Category 1 or 2	120
Parliamentary Secretary/Shadow Minister	Category 1	90
	Category 2	120
Other Assembly/Council Members	Category 1	90
	Category 2	120

Submissions to the Tribunal have sought an increase in the number of overnight stays. All major political parties have recommended that the number of overnight stays be increased to more accurately reflect the increased time Members are required to spend in Sydney on parliamentary business. They have suggested the following:

Group	Officer	No. of overnight stays
Group 1	Premier, Ministers, President, Speaker, Leader of the Opposition (LA And LC), Deputy Leader of the Opposition (LA), Leader of third party in LA with not less than 10 Members	200
Group 2	Deputy Speaker, Chairman of Committees (LA And LC), Government Whip and Deputy Whip, Opposition Whips (LA And LC), Deputy Leader of the Opposition (LC) and Deputy Leader of Third Party in LA while not less than 10 Members	180
Group 3	Council Members, Chairs of Standing/Select Committees	160
Group 4	Members of Standing/Select Committees (LA)	140
Group 5	Assembly Members	120

It was argued that the Tribunal should recognise that while Parliamentary Sitting Days have not increased significantly since 1989 there has been a significant increase in the Parliamentary Committee system involving Members of both Houses. In particular, there has been an increase in the number of Legislative Council General Purpose Standing Committees. Additional responsibilities of office holders means that all country based Legislative Council Members and Legislative Assembly office-holders are in Sydney for in excess of 120 days per annum.

As noted above, Members are required to travel and stay in Sydney on parliamentary business. Until the 1998 amendments to the Act there was never a definition of what constituted parliamentary business. The Tribunal, for the purposes of this Allowance, identified two main areas of activity i.e., sittings of Parliament and sittings of Parliamentary Committees. The third area i.e., `other parliamentary duties' was intended to cover a diverse range of duties which would be at the discretion of the Presiding Officers to approve.

The 1998 amendments to the Act included for the first time a definition of parliamentary duties ie

"parliamentary duties of a member or recognised office holder means the duties that attach to the office of a member or recognised office holder, and includes the duties that a member or recognised office holder is ordinarily expected to undertake, including participation in the activities of recognised political parties, and includes any duties prescribed as being within this definition, but does not include any duties prescribed as being outside this definition."

The Tribunal has no doubt that Members are required to spend more time in Sydney attending to parliamentary duties. A number of facts support this view.

The Legislative Council's 2004 Annual Report lists nine Committees. Nearly all Members of the Legislative Council sit on these Committees. Most Committees sit or conduct hearings on non-Parliamentary sitting days. The Legislative Council Standing Order 209 provides that Committees sit only when the House is adjourned. There is a similar provision (Standing Order 328) in the Legislative Assembly which allows Committees to meet when the House is not sitting.

Attendance and membership of the Committees varies. Some Members sit on more than one Committee. It is also understood that different Committees can sometimes sit on the same day.

The overall conclusion drawn from the above is that while there has been an increase in the number of occasions Members have to spend in Sydney to attend Committee meetings and hearings there is no clear pattern of attendance frequency. Some members spend over 70 days on Committee meetings while some attend less than 10 days. This point is made only to emphasise the difficulty the Tribunal faces in its attempt to quantify this aspect of Members' attendance.

Members' entitlements, applied as they are uniformly to Members of both Houses, cannot always meet the specific needs of every Member. There are Members who utilise all their entitlements and there are those who under-utilise these entitlements. In the end the Tribunal can only make an assessment on what is reasonable for the majority of Members and provide sufficient flexibility to best meet their needs.

The Tribunal has obtained figures from the Legislative Council's annual reports over the four year electoral cycle to determine average number of days spent by Legislative Council Members on Committee attendance. These figures show that Members in receipt of the Sydney allowance spent an average of 21 days on Committee participation. For the same four year period the Legislative Council sat for an average of 48 days per parliamentary year.

Based on the above the Tribunal considers that, on average, Members of the Legislative Council would spend a total of 69 days attending sittings of Parliament and Committee participation.

Members also undertake other parliamentary business in Sydney (meetings with constituents and or lobby groups, attendance at meetings of political parties, attending functions, etc). Historically, the Tribunal has allowed 35 overnight stays for such purposes. If added to the total number of overnight stays for sittings of Parliament and Committee participation this would increase overnight stays for an ordinary Member in the Legislative Council to a minimum of 104 occasions. This represents a minimum increase of 14 nights for a Member of the Legislative Council who is currently entitled to 90 overnight stays.

In addition, Members of the Legislative Council have advised that, unlike their Legislative Assembly counterparts, who are provided with an electorate office, they have only one office at Parliament House. This is also where Members' staff are located as well. It is, therefore, necessary for the Legislative Council Members to spend additional time in Sydney undertaking normal day to day activities in Parliament House.

In the case of Ministers and Leaders of the Opposition and the other Recognized Office Holders, while they may not participate in committee work, they would be required to spend more time in Sydney because of portfolio or Party obligations.

Given all the circumstances, the Tribunal considers that an increase in the maximum number of overnight stays is warranted. The Tribunal is however, not prepared to differentiate entitlements between Members. The Tribunal has for many years adopted the principle that entitlements for Members should be consistent for both Houses as this provides the most equitable approach to remuneration setting. In the current case, for example, Legislative Council Members may have to spend more time in Sydney attending Committee meetings but Members of the Legislative Assembly spend more time in Sydney attending sittings of Parliament.

The Tribunal has also broadened the Recognised Office Holders eligible to claim higher levels of Sydney Allowance. The new maximum overnight stay arrangements are as set out hereunder:

Office	Electorate/Residence	Overnight Stays p.a.
Minister, Speaker, President, Leader and Deputy Leader of the Opposition (Assembly and Council), Leader of Third Party in Assembly with not less than 10 Members.	Category 1 or 2	180
Deputy Speaker, Chairman of Committees (Assembly and Council). Whip and Deputy Whip (Assembly and Council) Parliamentary Secretary. Deputy Leader of Third Party in Assembly with not less than 10 Members.	Category 1 or 2	140
Chairs of Standing/Select Committees;	Category 1 or 2	140
Council Members	Category 2	135
Council Members	Category 1	105
Assembly Members	Category 2	135
Assembly Members	Category 1	105

These increases are the maximum number of overnight stays Members and Recognised Office Holders will be entitled to without the need to substantiate the daily rate of allowance. Each overnight stay beyond the maximum will need to be acquitted to the Legislature in accordance with the relevant provisions.

Members will still be required to provide evidence of being in Sydney on parliamentary business. For those occasions when Parliament is sitting, or Members' Committees are meeting, it will not be necessary to provide specific evidence of attendance as the Parliamentary record will be sufficient.

On other occasions when Members are in Sydney on parliamentary business, however, it will be necessary for the Member to sign the Parliamentary attendance register as proof of being in Sydney on parliamentary business. Given that Members of the Legislative Council, in particular, have their parliamentary offices and staff in Parliament House it seems reasonable that most of their parliamentary business would be conducted in the House.

For those occasions where Members are required to be in Sydney but are not required to attend Parliament House e.g., attending functions, meetings of parliamentary political parties, then sufficient documentary evidence should be provided to the Presiding Officers of each such occasion.

Members who are required to attend Sydney beyond the maximum number of overnight stays will need to provide documentary proof of each such stay as well as a costing for each occasion up to the maximum daily rate.

To ensure greater equity with the Members who are in receipt of the capped annual rate, Members will only be allowed to claim actual expenses, up to the maximum daily rate for each such occasion.

The daily rate

As part of this Review the Tribunal sought from Members broad details of the type of accommodation they use while in Sydney. From the responses, it is clear that Members use three main forms of accommodation, i.e., rent/lease, mortgage and commercial accommodation, in roughly equal numbers.

This is not surprising given that each Member makes arrangements that suit the particular needs of the Member. To ensure that the methodology used to assess a reasonable daily rate is a valid guide the Tribunal has examined not only the commercial accommodation rates but looked at rents for inner city accommodation. Mortgages are much more difficult to quantify given that each Member's circumstances will vary according to the cost of the property, the level of mortgage, the amount of repayment, etc. For this reason the Tribunal has only used the rentals and commercial hotel rates as the basis of assessing accommodation costs.

The daily rate has historically been set at a lower rate than the ad hoc travel rate because of the intention that Members make long term accommodation arrangements. The current rate is $180 per overnight stay in Sydney. By way of comparison, Federal Parliamentarians receive $170 per overnight stay.

When compared with Canberra, rents in Sydney are generally higher. Figures provided by the Real Estate Institute of Australia on rental accommodation for a one bedroom Unit near Parliament House in Inner Sydney and Inner Central Canberra are set out in the following table:

Source	Sydney (1 Bedroom Unit) median cost	Canberra (1 Bedroom Unit) median cost
Real Estate Institute (Dec 04)	$300	$260

Rents for 2 bedroom dwellings in Sydney and Canberra also show a reduced cost difference as noted in the following table..

Source	Sydney (2 Bedroom Dwelling) median cost	Canberra (2 Bedroom Dwelling) median cost
Real Estate Institute (Dec 04)	$290	$270

On the basis of these figures there is a moderate difference in the cost of rental accommodation between Sydney rents and Canberra rents. As noted above, Members renting accommodation would find it difficult to rent on an 'as needed' basis. Most landlords would require a lease of at least 12 months or at the very least 6 months. Advice to the Tribunal was that Members who rented generally had to rent for 12 months whether they were occupying the residence or not. Members renting properties would also be responsible for some utility costs e.g., electricity, telephone, etc.

Members with mortgages would have monthly mortgage repayments as well as quarterly utility costs (water, telephone, electricity) as well as strata levies.

The Tribunal has also received advice that the Government rate for accommodation at hotels near Parliament House and in which some Members stay, range from $100 per night to $140 per night including breakfast.

To the accommodation costs must be added the cost of meals and incidentals. Meals at Parliament House range between $30 and $40 for lunch and dinner. Thus, a Member having two meals a day would be required to pay between $60 and $80 per day including breakfast. The current public service total lunch and dinner rate for Sydney is $56 per day.

The above figures suggest an increase in the daily rate is warranted. After considering all of the above the Tribunal considers that a daily rate of $200 per overnight stay is reasonable.

The Tribunal notes the various accommodation arrangements made by Members. The Tribunal, in formulating the rate of $200, has adopted the principle that while this rate may be generous to some Members but not others it is, in the Tribunal's view, reasonable for the majority of Members to be able to meet reasonable expenses incurred while in Sydney on parliamentary business.

The Tribunal will not be providing annualised figures for those Members who prefer the annual rate. Members who make the election to receive the annual amount will have the amount calculated by the Financial Controller using the traditional methodology (i.e., maximum number of occasions x the daily rate applicable to the Member or Recognised Office Holder).

The 'In Transit' rate currently provides a lower rate than the Sydney Allowance. It is provided particularly for those Members who live in the more remote areas of the State and who are required to make an overnight stay in a country location on their way to or on their way home from Sydney.

Members living in Category 2 electorates, i.e., those furthest from Sydney, are able to fly to Sydney in the same day. Most of these Members, because of airline timetables, arrive in Sydney either on the day before a sitting of Parliament and leave the day after Parliament rises. In either case, there is no longer a real need for Members to make an overnight stay on the way to or on the way home from Sydney.

On such occasions and consistent with public sector rules for non award employees, Members will be able to claim reasonable meal and incidental expenses up to a daily maximum on such trips to and from Sydney.

PRINCIPAL PLACE OF RESIDENCE

At the time of the 2003 review the Tribunal indicated that it might need to assess the definition of "principal place of residence."

In July 2003, the Independent Commission Against Corruption (ICAC) issues its Report on the investigation into the conduct of the Hon Malcolm Jones MLC (the Jones Report).

This investigation centred on the use of the Sydney Allowance by Malcolm Jones and the issue of principal place of residence was raised. In respect of this matter the ICAC noted that the PRT had not provided a definition of principal place of residence but that the Legislature had developed guidelines to help Members determine the issue. The ICAC concluded:

"The draft administrative guideline prepared by the parliamentary administration will assist Members to work through their personal circumstances in order to differentiate between their places of residence and determine which of them would be their `principal place of residence.' Both the Auditor General and the Commission have been consulted about this guidance document. Its implementation will assist in clarifying the matter and it will increase the level of control with respect to the administration of the Allowance."

The ICAC recommended:

"...that the parliamentary administration implement its draft Sydney Allowance Guidelines about determining `principal place of residence' as soon as possible."

In December 2004 the ICAC issued its "Report on the investigation into the conduct of the Hon Peter Breen MLC."

This investigation also centred on the use of the Sydney Allowance by the Hon Peter Breen MLC. As part of this Report the ICAC recommended that:

"...the Parliamentary Remuneration Tribunal should review and define the term "principal place of residence". In doing so, the Tribunal should consider systems used in other jurisdictions for compensating non-metropolitan Members for the travel and accommodation costs of attending Parliament."

The Tribunal's investigations have revealed that in most jurisdictions a strict definition is not provided. Most jurisdictions either accept the Member's nomination of the principal place of residence or employ a checklist similar to the one adopted by the NSW Legislature to determine a Member's principal place of residence. In the New Zealand model it is the Presiding Officer who determines a Member's principal place of residence based on information provided by the Member.

Having regard to the above, the Tribunal considers that a Member's principal place of residence is that place where the member normally returns and resides when not in Sydney on parliamentary business.

Members nominate this residence to the Clerk. There are a number of tests to establish the accuracy of this nomination eg mail delivery, electorate enrolment, family, possessions etc. The checklist adopted by the Legislature provides sufficient tests to establish the accuracy of a Member's nomination. While quite comprehensive the Tribunal considers that additional forms of proof such as the address shown on a Member's driver's licence or the telephone accounts for the nominated principal place of residence also be used as a further test. The Legislature may also wish to consider which property the Member has nominated for Land Tax purposes in establishing the principal place of residence.

The Tribunal maintains its view that ultimately it is the Member's responsibility to nominate his/her principal place of residence for Sydney Allowance purposes. As such Members, after completing the Parliament Checklist, should certify that the nominated residence for Sydney Allowance purposes is their principal place of residence.

The conditions pertaining to the Sydney Allowance have been amended to reflect the above additional requirements.

The Tribunal was also asked to consider including the electorate of Penrith in Category 1 for Sydney Allowance purposes. No evidence has been provided to support this request and at this point in time the Tribunal is not convinced that such an inclusion is warranted. The whole issue of which electorates within the Sydney metropolitan area should or should not be included is a matter best left for consideration when the new electoral boundaries come into effect at the time of the 2007 election.

The Tribunal does not support the suggestion that a time limit be imposed on Members who re-locate from Sydney to a non metropolitan residence. In a democracy, citizens have the right to move freely without penalty. The same right should be extended to Members of Parliament. What is important is whether the Members new location is his or her principal place of residence. If this is genuinely established then the Member should be eligible for the Allowance.

PART 3

3. SUMMARY OF 2005 DETERMINATION

Electoral Allowance	2.4 percent increase
Sydney Allowance	11 percent increase
Logistic Support Allocation	3.5 percent increase
Electorate Mailout Account	No increase
Committee Allowance	3.92 percent increase
Electorate Charter Allowance	No increase
Travel Allowances	Increase generally to public sector rates.

Dated this 29th day of June 2005

The Honourable Justice R Boland

THE PARLIAMENTARY REMUNERATION TRIBUNAL