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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

30 May 2008

PARLIAMENTARY REMUNERATION ACT 1989
REPORT PURSUANT TO SECTION 13(1) OF THE ACT

INTRODUCTION

Section 11 of the Parliamentary Remuneration 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 makes 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)).

As is the usual practice of the Tribunal, letters were sent to all Members and the Presiding Officers as to matters they wished to have considered as part of the review. In particular the Tribunal sought submissions from Members on the annual component of the Sydney Allowance. The Tribunal had foreshadowed a review of the annual payment of the Sydney Allowance (as opposed to the payment on the daily basis) arising from administrative difficulties concerning the reimbursement by Members of the unspent portions of this Allowance

Part One of this Report will outline general matters raised as part of the annual review and any adjustments to additional entitlements. Consistent with the usual practice, 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 did, however, raise a number of substantive issues which, in the Tribunal’s view, merit further consideration and/or comment. Part Two will provide a summary of the Determination.

1. GENERAL MATTERS RAISED

Electoral Allowance

Submissions relating to the Electoral Allowance centred on the quantum. Most submissions had sought increases in the Allowance beyond normal CPI movements to account for the significant rises in fuel costs. One submission also sought to have unspent portions of Electoral Allowance not fully expended returned to the Consolidated Fund rather than being retained by Members.

To deal with the unspent portions of this Allowance first: the Tribunal, in its 2007 Annual Report, provided a detailed history and analysis of the current arrangements for this Allowance. The Tribunal would refer anyone wishing to understand the workings of this Allowance to that Report. The Tribunal repeats here the conclusions of that analysis:

“…As noted above, section 10(2B)(c) of the Act provides that the Electoral Allowance is provided as compensation for all incidents of the performance of parliamentary duties. Section 4 of the Act defines “parliamentary duties”. Section 10(2C) of the Act excludes the Electoral Allowance from the Tribunal’s general condition-setting powers in respect of additional entitlements. This suggests that the Tribunal’s role, insofar as Electoral Allowance is concerned, is limited to determining the quantum only and not to provide any further clarity or interpretation on the use of the Electoral Allowance or its purpose and conditions beyond that provided in the Legislation.”

The Tribunal maintains that any changes to the Electoral Allowance beyond its quantum (which is the sole function of this Tribunal) can only be made by way of legislative amendment.

Insofar as the quantum of the Allowance is concerned, it should be recognised that a significant component of the Electoral Allowance is to meet the cost incurred by Members in leasing or purchasing a motor vehicle to undertake their parliamentary duties.

The Tribunal accepts that the costs of running a motor vehicle have risen significantly, primarily due to fuel price increases. Because of the distances covered by Members, especially those in country electorates, the increased cost of fuel has had a particular impact on country Members. Of course, the Electoral Allowance has factored into it the increased costs of representing a country electorate and that should be taken into account. Whether some additional consideration should be afforded in respect of country electorates to take account of the increased cost of running a motor vehicle, given it is an essential part of a Member's "tools of trade" is a matter that the Tribunal is prepared to consider provided there is a proper basis upon which to do so. For the present, however, very many members of the general community are also affected by increasing fuel prices with no opportunity to have those costs offset in any way. Nothing that has been put to the Tribunal on this occasion would satisfy it that there is a special case for granting Members an increase in their Electoral Allowance based on increased fuel prices when ordinary members of the community whose motor vehicles are also an essential part of getting to work, or are an essential part of their tools of trade, are unable to obtain relief. The Tribunal does not consider it appropriate to provide Members with increases greater than those available to the general community. The increase in the Electoral Allowance for the current review will be limited to the relevant percentage movement in the Consumer Price Index.

The Tribunal notes that in the private sector it is a widespread practice for employers to provide employees with motor vehicles where it is essential (but often simply as a perquisite) for their work. Given that a motor vehicle is essential for Members to carry out their parliamentary duties, particularly in country areas, a sound case exists for providing Members with a private plated, fully maintained motor vehicle. This is done in all other Australian parliamentary jurisdictions and there appears to be no objective grounds for making New South Wales, the most populous State, the exception. The Tribunal has repeatedly supported the provision of motor vehicles to Members and given that the Tribunal has previously stated that the provision of motor vehicles to Members would result in a reduction in the Electoral Allowance, the overall cost of the scheme to the taxpayer would be minimal.

Sydney Allowance

In its 2006 review, the Tribunal foreshadowed that it intended to remove the annual entitlement to the Sydney Allowance as part of the 2008 Annual Determination unless there were compelling reasons for not doing so.

All submissions received have supported retention of the annual entitlement. Reasons for doing so include the administrative efficiency and that it is more in keeping with the Tribunal’s long held view that Members make permanent accommodation arrangements in Sydney.

The Tribunal has noted the comments of the Members and having regard to these comments, and that nearly 40 percent of Members receive the Sydney Allowance as an annual rate, the Tribunal will retain both the daily and annual rates.

The Tribunal has also had regard to both written and oral submissions on the introduction of additional conditions to the Sydney Allowance to overcome the problem of overpayment of unspent portions of this entitlement in a timely manner. Unlike the daily Sydney Allowance, which is provided for each day a Member is in Sydney on parliamentary business, the annual amount is provided to Members in advance based on the number of days determined by the Tribunal as reasonable for Members to be in Sydney on parliamentary business. A reconciliation is undertaken at the end of each financial year of the actual number of days a Member was in Sydney on parliamentary business and if it happens that the Member was in Sydney on a smaller number of occasions than was originally estimated by the Member then that Member is required to repay the proportional amount back to the Parliament.

The Tribunal is encouraged by administrative arrangements introduced by the Legislative Assembly to ensure Members are not left with a large debt at the end of each financial year. The Tribunal has been asked to make these arrangements official by adopting them as conditions for this entitlement. The Tribunal does not support this request. The Tribunal has continually encouraged the Clerks of the Parliament to introduce administrative arrangements for entitlements that are consistent with the Tribunal’s determinations. This approach provides clear rules on the operation of the entitlements while at the same time allowing the Clerks sufficient flexibility to introduce administrative arrangements to meet the individual needs of Members. Continually adding conditions to the entitlements can only lead to greater complication.

Where it is clear that changes are warranted to the entitlements scheme to ensure that public funds are used properly then the Tribunal will not hesitate to introduce such changes.

The Auditor General has noted in the past that a small number of Members have failed to repay unspent portions of the Sydney Allowance. The Tribunal is also aware that the officers of the Legislature expend a considerable amount of time and energy in trying to recoup this money. The Tribunal does not consider this a satisfactory state of affairs. The Tribunal expects, as would the community expect, that Members when required to repay public monies would do so promptly. The Tribunal accepts that the overwhelming majority of Members do make reimbursements expeditiously. To ensure 100 percent compliance with this expectation, the Tribunal could introduce sanctions against those Members who do not reimburse outstanding amounts within a reasonable time. The Tribunal is not prepared to do so at this time but will formally introduce a time limit within which Members must have settled any Sydney Allowance accounts. Should this not prove effective then the Tribunal will seriously consider stronger measures at the time of the next annual review.

The Tribunal also received submissions concerning the administration of the Sydney Allowance and in particular the inflexibility associated with the level of proof to be presented by Members to confirm the overnight stay. Members are presently required to sign in and out of the Parliamentary Register as proof of being in Sydney on Parliamentary business when Parliament is not sitting. The conditions applicable to the Sydney Allowance also provide that on those occasions where Members are in Sydney on parliamentary business but are not required to attend Parliament House eg, attending a function, then the Member must provide sufficient proof to the Clerks to substantiate each such occasion. It is sufficient for Ministers to provide evidence from their diaries or other forms of documentary evidence acceptable to the Clerks to certify as evidence of their attendance in Sydney.

The Tribunal acknowledges that it is not always convenient for Members to sign in and out when they are in Sydney on Parliamentary business. The Tribunal considers that there should be sufficient administrative flexibility to avoid this type of inconvenience. The Tribunal is prepared to amend the conditions so that the flexibility granted to Ministers to provide entries from their diaries or other forms of documentary evidence acceptable to the Clerks to certify as proof of their attendance in Sydney, is extended to Members.

One submission proposed that the definition of "principal place of residence" should be tightened to prevent any abuse of the allowance. There is no evidence that the present definition is the source of any abuse.

Quantum of the Sydney Allowance

In 2005 the Tribunal undertook a fundamental review of the Sydney Allowance. In that review the history and purpose of the Allowance was discussed. Briefly put, because Parliament is located in Sydney and much of its business is conducted in Sydney, Members must travel to Sydney to perform a high proportion of their parliamentary duties including the duty of representing their constituents in Parliament House. This necessitates Members of non-metropolitan electorates to incur additional expenses associated with staying and living in Sydney throughout the year. The Sydney Allowance (formerly known as the Living Away from Home Allowance) is intended to compensate Members for these additional accommodation costs and living expenses. Since the introduction of the Allowance in 1975 the Tribunal has set the daily rate of the Sydney Allowance at a lower level than the ad hoc capital city travel rate available to public sector employees on the premise that Members would make longer term accommodation arrangements in Sydney. The Tribunal has encouraged Members to buy or lease accommodation for this purpose.

The Tribunal continues to support this approach as the most appropriate for Members who are required to travel and stay in Sydney for up to 135 nights each year.

The Tribunal last reviewed the quantum of this Allowance in 2005. The Tribunal’s methodology was articulated in that review. The Tribunal has adopted a similar methodology on this occasion and noted that there have been cost increases which warrant an increase in the daily rate beyond the normal CPI increases. The Tribunal has adjusted the daily rate of this Allowance accordingly.

Additional Staff Member for Members of the Legislative Assembly

Since the completion of the 2007 Report and Determination the Tribunal did provide a Ruling, pursuant to section 17 of the Act in February 2008, which clarified that the references in the Determination to staff grading and employment duration are provided only as a means by which the overall budget for this purpose may be calculated. The purpose of this Ruling was to clarify that Members had complete flexibility on the grade and duration of the additional staff member provided it did not exceed the overall budget for this purpose.
The relevant condition associated with this matter has been amended to reflect the Ruling.
Submissions have been received drawing the Tribunal’s attention to the workloads of those electorates within which there are high levels of public housing estates. The workload of these electorate offices is such that additional support is required.

The Tribunal acknowledges that there is a higher level of interaction between the Member and the Member’s electorate office staff with constituents of electorates with high levels of public housing than those without. Whilst the Tribunal is prepared to consider this matter further, it should be noted that most electorates are likely to have an element or characteristic in their constituency that requires greater community interaction with the electorate office. Should, for example, electorates with higher levels of migrant population receive similar additional support? Should electorates whose constituents, while not living in public housing, are nevertheless from low socio-economic backgrounds be similarly provided with such additional support? The Tribunal would be prepared to receive submissions on this matter at the time of the next annual review.

Electorate to Sydney Travel Warrants

The Tribunal has again received submissions seeking to expand the use of travel warrants. In its 2007 Report the Tribunal stated the following;

“…Submissions have again been received seeking to extend the value of the travel warrant to include the cost of getting to and from the airport. This matter was considered as part of the 2006 annual review. At that time the Tribunal concluded that:

“…The Tribunal has considered this matter carefully but is of the view the existing arrangements are adequate. The Electorate to Sydney travel warrants are for exactly that purpose – travel to and from Sydney. Each warrant has a value based on the cost of the airline ticket from the airport nearest the Member’s home to Sydney. Members have the additional flexibility of using whatever means they wish to travel to Sydney provided the cost does not exceed the value of the warrant. Any extra travel required is to be met from the LSA or the Members’ electoral allowance.”

The Tribunal makes the final observation that part of the reason why non-metropolitan members receive higher levels of Logistic Support Allocation and Electoral Allowance is to accommodate the additional travel costs.”

The Tribunal does not consider any further clarification or review is required in respect of this entitlement.

Government Travel Booking Service

The Government has entered into a period contract with a provider for Government travel bookings. Members have advised that the requirement to use this provider does not provide them with the necessary flexibility to make their travel bookings nor are they able to take advantage of a multitude of on line booking services which provide cheaper air fares. The submission from the Presiding Officers has informed the Tribunal that the administration of the accounts for payment of travel bookings made through the Government contract are overly bureaucratic and existing arrangements have inherent difficulties in reconciliation of payments with services provided.

In addition, advice received from the Presiding Officers is that the Parliament is not bound by the provisions of the Public Sector (Goods and Services) Regulation 2000 (the Regulation) under the Public Sector Employment and Management Act 2002. It is under this Regulation that New South Wales period contracts, including contracts for travel bookings are entered into between the Government (through the State Contracts Control Board) and goods and services provided. Within existing rules, public sector agencies are bound to use these providers in the provision on goods and services.

The Regulation provides a definition of the extent of the Public Sector. Clause 3 of the Regulation defines “public sector” as:

“…public sector service has the meaning given to it under the Act, except that it does not include the service of either House of Parliament, or the President or Speaker, or the President and the Speaker jointly.”

Notwithstanding the exclusion of the Parliament from the provisions of the Regulation, the Tribunal still considers that the Parliament should continue to use the period contracts where there is a clear cost or service benefit to do so. Where it is clear that there is neither a cost nor a service benefit then it is clear that they are not bound to use the period contracts. The Tribunal will, therefore, remove the requirement to use the period contract provider for the provision of air travel bookings.

Committee Allowances

The Tribunal has again received submissions on Committee Allowances. The submission is essentially the same as that received in 2007. The Tribunal addressed this matter as part of that review and does not intend to consider this matter further on this occasion.

Electorate Mailout Account (EMA)

One submission received called for the Tribunal to review the use of the EMA, noting what was alleged to be a "spike" in expenditure prior to elections or, alternatively, to abolish the EMA.

The Tribunal would need to be satisfied that there has been an abuse of the EMA before taking any steps in relation to its expenditure. The Tribunal has no evidence of any abuse.

Party Status

The Tribunal also received a submission on the number of members necessary to determine Party status. The Tribunal has noted the comments but also notes that any change to the numbers would require legislative amendment.

Tribunal Annual Report Date

In its 2007 Report the Tribunal drew the attention of the Parliament to the administrative problems associated with the requirement of having the Tribunal make its annual determinations by 31 May each year. The Tribunal regrets to see that no action has been taken to remove this restriction.

The Tribunal would again urge the Parliament to provide the Tribunal with greater flexibility in its reporting timeframe.

Other Matters

One submission proposed a one-year freeze on salary increases for Members. The Tribunal has no jurisdiction in relation to salaries.

One submission sought the restoration of the entitlement to travel to New Zealand for the purpose of undertaking Parliamentary business. The Tribunal has no jurisdiction in respect of that matter.

2. REVIEW OF ADDITIONAL ENTITLEMENTS

General

Some submissions were received calling for substantial increases in a number of the allowances. Detailed reference was made to the cost of living and accommodation in Sydney in particular, and the increasing cost of fuel and the impact that was having on country Members given the long distances they travelled.

The Tribunal notes, however, that most of the submissions received called for the application of movements in the Consumer Price Index to be applied to the allowances. That is the course adopted by the Tribunal except that in respect of the Sydney Allowance, where the case has been made out for an increase greater than the CPI movement.

Electoral Allowance

For this review the Tribunal has adopted its usual approach and increased the electoral allowance by 4.2 per cent ie the CPI increase between March 2007 and March 2008.

Sydney Allowance

For reasons stated in Part 1 of this Report the Tribunal has increased the daily rate of the Sydney Allowance to $240 per day.

Logistic Support Allocation (LSA)

The Tribunal has reviewed the Logistic Support Allocation in accordance with its usual approach and provided an increase of 4.2 per cent.

Committee Allowance

The purpose of this Allowance is to remunerate Members serving 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.

Members' salaries were increased from 1 July 2007 by 6.8 per cent. Because of the delay in finalisation of this 2007 Report and Determination that increase in the Committee Allowance formed part of the 2007 Determination. There has been no increase in Members’ salaries since 1 July 2007. Therefore, consistent with the Tribunal’s usual approach no further increase in Committee Allowances is warranted.

Electorate Mail-out Account (EMA)

The EMA has been adjusted to reflect enrolment statistics as of April 2008 and these are outlined in Schedule 4 of the Determination.

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

The Tribunal has reviewed the use and conditions of this Allowance and considers that no adjustment is warranted at this time.

Travelling Allowances for Recognised Office Holders

The Tribunal’s Determination is based on those rates provided to New South Wales Public Servants and those deemed “reasonable” by the Australian Taxation Office (ATO). In both the New South Wales Public Sector and ATO guidelines, travel allowances are differentiated on the basis of destination and salary level of officer. The 2007 rates remain applicable at the time of making the determination.
__________________________________________

 

PART TWO
 

SUMMARY OF 2008 DETERMINATION

Electoral Allowance	4.2 per cent increase
Sydney Allowance	14 per cent increase
Logistic Support Allocation	4.2 per cent increase
Electorate Mailout Account	No increase
Committee Allowance	No increase
Electorate Charter Allowance	No increase
Travel Allowances	No increase

Dated this day of 30 May 2008

The Honourable Justice R P Boland
THE PARLIAMENTARY REMUNERATION TRIBUNAL