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Review of Parliamentary Entitlements Committee Report April 2010

Appendix 1: Parliamentary Entitlements in Other Jurisdictions

During the course of its deliberations the committee examined how overseas and Australian state jurisdictions regulate parliamentary entitlements (other than remuneration).  This appendix outlines the key themes in those jurisdictions.  It is not a detailed description of entitlements regimes in the various jurisdictions surveyed. 73

Entitlements

It is standard practice in all surveyed jurisdictions to provide elected representatives with the tools they need to undertake their roles and responsibilities.  These entitlements may be subject either to monetary limits or to purpose requirements.  Where the entitlement is drawn down incrementally on a transactional basis, such as when obtaining office requisites, the vendor providing the services may be paid by the entitlement’s administrators, or the member of a legislature may have to pay for the service and seek reimbursement.  Overseas jurisdictions use a variety of arrangements to cover parliamentary expenses, as is set out in the following selected examples.

The United Kingdom

In November 2009, the Committee on Standards in Public Life made a comprehensive set of recommendations for reform of the UK MPs allowances system.  From the next UK general election, the Independent Parliamentary Standards Authority (IPSA) will have sole responsibility for setting and administering the rules on MPs’ expenses.  Rules are based on reimbursement of tightly controlled expenses, up to certain financial limits.  All expenses claims and payments will be published.74

The European Union

In July 2009 a new single statute covering salaries and allowances for members of the European Parliament came into effect 75. Under the new arrangements an elected member of the European Parliament is paid a flat rate allowance from which the member is expected to pay all the costs of running the member’s office in the member’s state of election (telephone, postage, purchase and operation of a computer, and the costs of travel within the state of election).  Members are separately reimbursed for the costs of travel to and from Brussels on presentation of receipts.  They are also paid a daily allowance to attend official meetings of parliamentary bodies (the evidence for this is the member’s signature on the official attendance register for the meeting). 

The United States of America

During each session of the Congress, each member of the House of Representatives has a single Members' Representational Allowance (MRA) available to support the conduct of official and representational duties.  Ordinary and necessary expenses incurred by the member or the member's employees are paid from this allowance 76. Costs are either reimbursed to the member or directly paid to a vendor providing services to the member. 

New Zealand

Each member of parliament is entitled to uncapped domestic air travel, taxis and rental cars for parliamentary business (or a mileage reimbursement if a private vehicle is used), accommodation while on parliamentary business, and telephone services (land line rentals and a mobile phone).  Each member is also is given an annual expense allowance intended to cover out of pocket expenses incurred while carrying out parliamentary business (such as hospitality, memberships, donations and prizes). 

Legislative authority

With the exception of Queensland, all jurisdictions surveyed had one or more pieces of legislation authorising parliamentary entitlements.  The United Kingdom has notably moved from a system of entitlements authorised by resolutions of the House of Commons (which were compiled into a guide called The Green Book) to one to be determined by an independent statutory authority.77  In Queensland, the Governor in Council authorises the Members’ Entitlement Handbook, which is then published in the Queensland Government Gazette and is available online.78

The United States, European Union, Canada, New South Wales, Victoria and Tasmania are examples of jurisdictions with a single legislative authority and a single authority for determining the rules for the entitlements regime (or a single decision -making body for each parliamentary chamber).  South Australia and Western Australia have legislation that authorises an independent body to determine parliamentary entitlements, and authorises parliament or the executive to provide for specified additional entitlements.

An example of a dual legislative authority is New Zealand, which has two sources of legislative authority (the Civil List Act 1979 [NZ] and the Parliamentary Services Act 2000 [NZ]) but only one administrative authority (the speaker of the house).

By way of contrast there are multiple authorities for the entitlements of Australian federal parliamentarians.  The ANAO in its 2009 report described the framework as being a “combination of statute79, convention and practice”.80

The multiplicity of authorities means that the rules for the Commonwealth parliamentary entitlements regime are dispersed through multiple documents.  Finance produces handbooks that consolidate the rules for use by members of parliament, but any dispute must be resolved by reference to the primary legal documents, notwithstanding that a member may have relied upon the handbook to decide on the legitimacy of a claim. 

Decision making

A robust entitlements regime is arguably one where the decision-making body is able to ensure that elected representatives have the support they need to perform their functions, but does not encourage wastage or the consumption of unnecessary services.  Each of the above regimes has its advantages and disadvantages.  Independence from the pressure of elected representatives certainly has its advantages, but unless an independent body has relevant expertise and engages in consultations with parliamentarians, it may not sufficiently understand the parliamentarians’ needs to determine remuneration effectively.  A regime in which the decision-making authority is part of the government has the advantage that its framers will have regard to overall budget implications and would also understand the functions and duties of a member of parliament. 

Where legislation confers the responsibility for deciding the scope and nature of the parliamentary entitlements regime on an independent authority, the relevant legislation sometimes requires that authority to consult interested parties or take submissions about the regime.  The UK IPSA is given a list of eight parties with whom it must consult, and may consult with any other person it considers appropriate. 

The decision or rule makers for parliamentary entitlements regimes in the jurisdictions surveyed are generally (but not exclusively) overseen within the respective parliament.  For example:

Jurisdictions that do not have a fragmented system for determining entitlements (for example New Zealand and Queensland) have produced a single set of internally consistent rules for allowances regimes.  Procedural requirements for decision making, such as mandatory consultations, gazettal of executive rules or statutory tabling requirements, provide transparency for such regimes.  Fixed review cycles can channel elected representatives’ requests for further entitlements into a formalised decision-making procedure which can evaluate the requests in the context of the entire regime. 

Incidental use

The question of incidental use arises where an entitlement may be used only for a specified purpose.  The United States regime, for example, specifically permits incidental use provided that it is “negligible in nature, frequency, time consumed, and expense”.81

Most other jurisdictions do not specifically address this issue, although it might be indirectly addressed by statements of ethical principles or in certification requirements relating to the use of entitlements.  For example, in Queensland, claims against the General Travel Allocation must be accompanied by a certification that the purpose of the travel was “primarily for parliamentary business”. 

Compliance and audit

Compliance mechanisms for parliamentary entitlements regimes must respect the principle of parliamentary privilege and therefore the administrator’s primary compliance tool is usually an administrative audit.  This involves examining members’ claims for entitlements using documentation submitted to the administration, but does not ‘go behind the member’s signature’ by allowing the administrators to obtain access to documents held by the member. 

For example, the UK’s Commissioner for Parliamentary Investigations has the function of investigating payments from the MPs’ allowances scheme which should not have been made.  The commissioner has statutory access to any information held by the administration (IPSA) but does not have power to obtain information from a member.82  Where a wrongly made payment has been identified, the commissioner cannot impose sanctions on the member, but rather must refer the matter to the House of Commons Committee on Standards and Privileges.83

The New Zealand speaker has in place a process for settling disputes between an MP and the administrators about the validity of a claim in the members’ allowance regime.  The dispute settlement process comprises a system of escalating internal reviews by Parliamentary Services, the entity responsible for administering the regime, with the final arbitration on the validity of a disputed claim being the responsibility of the speaker.

Publication of expenditure

Most overseas and Australian jurisdictions publish statistics on the use of parliamentary entitlements.  The degree of detail published and the frequency of publication varies.  In some cases publication is done by tabling a report, whereas in other jurisdictions reports are published online.  Canada publishes an annual report of each member’s office, travel and other expenses online.  In New Zealand a report of members’ accommodation and travel is published quarterly online.  In Queensland each member’s travel expenditure is tabled annually.

Statements of principles

Some jurisdictions have incorporated general principles into their members’ entitlements regimes.  Statements of general principles can serve several purposes.  They may contain rules limiting the way in which members may or may not use their entitlements, in which case the rules can be very relevant to determining whether a particular expense was legitimately claimed.  They may also contain ethical statements which are essentially unenforceable but nevertheless useful for stating the moral framework in which the entitlements regime is to be administered.

The Scottish Parliament 84 has incorporated both substantive rules and statements of ethics into principles applicable to its members’ expenses regime.  For example, it has a principle of ‘objectivity’ which contains a substantive rule limiting use of expenses to those incurred “only for purposes of carrying out parliamentary duties”.  Principles are supported by aspirational statements; for example in the case of ‘objectivity’, that members’ claims “must represent value for money”.  Under the heading ‘leadership’, Scottish members are exhorted to “lead by example to strengthen public trust in the scheme”. 

On balance, the committee felt that such aspirational statements are of limited practical value.

In the United States, the House of Representatives handbook for the MRA contains a statement of rules applicable to all entitlements comprising the MRA.85 These set out what they may and may not be used for including that they may be used only for official and representational expenses and that they may not be used for, inter alia, personal, campaign, political or committee expenses. 

The New Zealand members’ entitlement regime states that “expenditure must only be incurred for parliamentary purposes”. 86 As ‘parliamentary purposes’ is a defined term this statement of principle establishes a standard against which all entitlement use may be tested.  Ethical statements, such as principles of openness, transparency, value for money and cost effectiveness are also included in the speaker’s directions.

Conclusion

It is clear that most jurisdictions face a similar range of choices about how to frame an entitlements regime for elected representatives.  It is not possible to judge the effectiveness of any particular scheme without comparing the administrative history of each jurisdiction, something which was beyond the resources of the committee.  However, the following conclusions can be drawn from the issues discussed above:

Publishing a member’s entitlements expenditure is a key compliance tool in most jurisdictions; it is consistent with the principles of accountability and transparency.

73. The jurisdictions surveyed were the European Union, the UK House of Commons, the Scottish Parliament, the United States, Canada, New Zealand, and all Australian jurisdictions.

74. As set out in IPSA press release of 29 March 2010, available at http://www.parliamentarystandards.org.uk/

75. For a full text of the statute see http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32005Q0684:EN:HTML (viewed 19 October 2009).

76. See http://cha.house.gov/search/node/members%20representational%20allowance (viewed 15 February 2010).

77. Under section 5(3) of the Parliamentary Standards Act 2009 (UK) the Independent Parliamentary Standards Authority is responsible for preparing the ‘MPs Allowances Scheme’.

78. See http://www.parliament.qld.gov.au/publications/view/legislativeAssembly/documents/entitlements/Members%20Entitlements%20Handbook.pdf (viewed 16 February 2010).

79. There are at least 11 pieces of legislation – see figure 3.1 in Chapter 3 above.

80. See p.14, paragraph 11, of the ANAO Performance Audit Report No 3, 2009-10, ‘Administration of Parliamentarians’ Entitlements by the Department of Finance and Deregulation’. 

81. See http://cha.house.gov/search/node/members%20representational%20allowance (viewed 16 February 2010)

82. See s.9(1) of the Parliamentary Standards Act 2009 (UK). 

83. See s.9(6) of the Parliamentary Standards Act 2009 (UK). 

84. See http://www.scottish.parliament.uk/MSP/MSPAllowances/index.htm (viewed 25 February 2010). 

85. See http://cha.house.gov/search/node/members%20representational%20allowance (viewed 25 February 2010).

86. See http://www.parliament.nz/NR/rdonlyres/BCEA476B-0FE7-4BC8-838A-DFC155E6EB83/94402/Directions2008Final4.pdf (viewed 25 February 2010).

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Appendix 2: Issues Raised in Submissions


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Last Modified: 30 September, 2011