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Review of Parliamentary Entitlements Committee Report April 2010

Chapter 3 – Limitations of the Current Framework

If you want me to agree that ministerial and parliamentary entitlements is one of the most complex areas that I have ever seen in government, then I am very happy to do that, because it is an extraordinarily complex area.

Dr Ian Watt
Former Secretary of the Department of Finance and Deregulation, 200642

The committee’s second term of reference refers to framework changes that remove instances of overlap, duplication, inconsistency and gaps in the provision of entitlements. Successive reports of the ANAO in 200143, 200344 and 2009 have portrayed the parliamentary entitlements framework as “complex and overdue for reform”.45  The 2009 ANAO report noted that:

…the framework remains characterised by:

This chapter will explore the limitations of the current framework in order to demonstrate the need for change and to provide a basis for discussion of the committee’s recommendations.  A detailed, but not exhaustive, summary of current entitlements is provided at Appendix 3.

Overview of current framework

The current framework comprises:  at least 11 Acts of Parliament; three sets of regulations; six Remuneration Tribunal determinations and reports; 21 determinations made by the Special Minister of State (the minister) under the Members of Parliament (Staff) Act 1984 (‘MOP(S) Act’); and nine formal procedural rules and sets of guidelines made by the minister to give effect to Remuneration Tribunal determinations.

These formal instruments interact with a myriad of decisions made by the minister, prime minister or presiding officers under legislative authority, and by ministers and departmental officials exercising executive or delegated authority (see Figure 3.1).  Finally, there are accepted conventions and practices that are difficult to administer because they are not codified, are largely unrecorded, and their origins and historical development are not transparent.  Some of the risks of relying on such conventions are discussed in Chapter 2 of the 2009 ANAO report.46

Figure 3.1 shows that there is no overarching legislation to bind the framework into a cohesive whole.  Responsibility for the framework is distributed among four ministers under the current Administrative Arrangements Order (AAO)47, and responsibility for specific entitlements has been delegated to other ministers and the presiding officers (see Table 3.1).  To further complicate this mix, the decision-makers under the framework are based in the parliament, the executive and an independent statutory body (the Remuneration Tribunal); and none is compelled to consult the others, or to publish the rationale for their decisions.

Until relatively recently, there has been a reluctance on the part of the executive to make ministerial decisions, including formal documents such as procedural rules and guidelines, publicly available.  One effect of key documents not being publicly available is that decision-makers may not be fully aware of the implications of their decisions for areas of the framework that are outside their immediate responsibility.  For example, without access to the complete framework, a decision maker may not know:

The government decided in July 2009 to publish on the Finance website details of the parliamentary entitlements framework, including procedural rules and guidelines and copies of the entitlements handbooks provided to senators and members.  Prior to this decision, the documents were freely available to the presiding officers in their capacity as senators and members, but were available to members of the Remuneration Tribunal only as a courtesy.  On the other hand, Tribunal determinations have not always been subject to consultation with the executive prior to their public release.  Lack of transparency may compromise the capacity of all agencies that provide services and information to senators and members to deliver a coordinated response to change or to provide timely and accurate advice.

The cumulative effect of these framework characteristics, combined with a long-standing tendency on the part of the various decision-makers to respond to requests from senators and members by addressing specific cases rather than exploring more general solutions, has led to systemic problems within the framework.  These problems include instances of inconsistency and ambiguity, duplication, overlap, redundancy, entitlements that are split between multiple heads of authority and a general lack of transparency about the framework.

In addition, providing certain entitlements under multiple heads of authority has made it difficult to discern which administrative body should assume responsibility for addressing identified needs within the framework.  This chapter will consider each of these problems in turn.

Inconsistency and ambiguity

The causes of inconsistency and ambiguity in the framework often derive from split responsibilities for determining the range and level of entitlements.  Inconsistency and ambiguity are also generic flow-on effects of the more specific issues discussed in this chapter, such as duplication.  As submitted by Finance, it is rarely possible to understand an individual entitlement by referencing one source document.48 This makes it very difficult for senators and members to use their entitlements with a high degree of certainty and for departmental officers to give senators and members definitive advice on the legitimate use of their entitlements.

As mentioned above, the current legislative framework comprises many pieces of primary and subordinate legislation.  The Remuneration Tribunal has submitted that the approach to the parliamentary entitlements framework adopted at the time of the making of the Remuneration and Allowances Act 1990 (R&A Act) and the Parliamentary Entitlements Act 1990 (PE Act) is soundly based in logic and should continue.49 This split separates the framework into two streams.  The first stream covers remuneration payments and the second stream covers funds made available for the business expenses of parliamentarians.

While this split is sensible, there are problems with the current framework in both structure and transparency of entitlements.  Schedule 1 of the PE Act lists benefits that members are entitled to (in some cases, with the approval of the minister).  These benefits may be varied or omitted by determinations made by the Remuneration Tribunal and by regulations.  In the event of a conflict between a determination and a regulation, the regulation prevails (see s.9 of the PE Act).

This means that a Remuneration Tribunal determination made pursuant to s.9 of the PE Act cannot be considered authoritative until it has been established that there is no conflicting regulation.  If there is a conflicting regulation the scope of an entitlement will depend on questions of statutory interpretation, making the entitlement difficult to administer and enforce.

In addition, the Remuneration Tribunal has used its determination making power (under clause 3 of Part 2 of Schedule 3 to the R&A Act, and clause 1 of Part 7 of Division 2 of the Remuneration Tribunal Act 1973 [RT Act])to sub-delegate powers to the minister to prescribe some entitlements and make procedural rules to give full effect to other entitlements.50

Uncertainty or confusion about the extent of and rationale for various entitlements may also contribute to the negative public image of the total benefits package which is regarded as overly generous, lacking in transparency and open to the perception that personal benefits are provided at public expense.  However, many of the individual entitlements such as salary, travel, office expenses and facilities are reasonable given that they recognise the wide range of roles and responsibilities carried out by parliamentarians.  A key framework design question is how to make the purpose of specific entitlements clearer and more defensible.

The electorate allowance discussed in Chapter 5 is an example of uncertainty and ambiguity.

Figure 3-1 Current Parliamentary Entitlements Framework – Major Components

Figure 3 1 Current Parliamentary Entitlements Framework – Major Components - See Overview of Current Framework for details
Click to view larger image

Table 3-1 Current parliamentary entitlements framework – administrative arrangements

Minister / Office Holder

Act

Entitlement

Authority to administer

Special Minister of State

Parliamentary Entitlements Act 1990

 

AAO

Members of Parliament (Staff) Act 1984

 

AAO

Members of Parliament (Life Gold Pass) Act 2002

 

AAO

Ministers of State Act 1952

 

AAO

Parliamentary Precincts Act 1988

 

AAO

Parliamentary Allowances Act 1952

 

AAO

 

Entitlements under certain Remuneration Tribunal determinations

Delegation from Remuneration Tribunal

Minister for Finance

Parliamentary Contributory Superannuation Act 1948

 

AAO

Parliamentary Superannuation Act 2004

 

AAO

Minister for Education, Employment and Workplace Relations

Remuneration and Allowances Act 1990

 

AAO

Remuneration Tribunal Act 1973

 

AAO

Prime Minister

Parliamentary Presiding Officers Act 1965

 

AAO

 

Several under PE Act

Decision maker under PE Act

 

Benefits to former prime ministers

Executive authority

Minister for Defence

 

Special Purpose Aircraft

Decision maker under PE Act
Delegation from SMOS

Attorney General

 

Legal Assistance to ministers

Decision maker under PE Regulations

Presiding Officers

 

Services in Australian Parliament House

Decision makers under Parliamentary Precincts Act

 

Some aspects of Electorate Office IT

Memorandum of Understanding with Finance



A clearer delineation between remuneration entitlements and the tools of trade entitlements that support senators and members to carry out their parliamentary and electorate duties would help to assure both the parliamentarians and the wider community about the true nature of the expenditure.  Remuneration-type entitlements are those that personally benefit senators and members such as salary, allowances in the nature of salary, living away from home allowances, superannuation and severance benefits.  The tools of trade entitlements that support parliamentarians to carry out their parliamentary and electorate duties include transportation (by various transport modes), official telephones, office equipment and facilities, and expenditure for communicating with electors by way of printed or electronic material.

The Remuneration Tribunal also points out that the wording of the RT Act has always presented it with challenges.51  The use of the term ‘allowances’ emanates from s.48 of the Australian Constitution which provides the ultimate head of power for these matters.52  The term allowance has been used variably throughout the legislation and determinations to cover different types of entitlements:  basic parliamentary salary; additional salary by way of allowance; and budgets which provide for a certain function, such as communications (which cannot be converted to remuneration).  More modern and consistent terminology throughout the framework would be useful.

There are also unclear and sometimes inconsistent definitions of key terms relating to the use of entitlements.  These terms include ‘parliamentary business, ‘electorate business’, ‘official business’, ‘party business’, ‘electioneering’ etc.  Some definitions used in the PE Act have different meanings under the Remuneration Tribunal’s determinations, for example ‘dependent child’.  In addition, the Tribunal’s determinations use definitions of ‘parliamentary office holder’ and ‘official business’ that are specific to individual entitlements and vary from their defined or implied meaning under the PE Act.

A new approach to delivering tools of trade could establish primary legislation, clearer powers of delegation (which would be used in accordance with the objectives of the primary legislation) and subordinate legislation that groups like entitlements together, with consistent meanings and operational rules.  That type of approach would establish a robust foundation upon which to administer and use the entitlements covered by the scheme.

Duplication

The conditions which foster the duplication of entitlements within the framework are:

Duplication increases confusion and error, particularly where the duplicated entitlement or wording is not identical, as in the example from Remuneration Tribunal Determination 2008/15 – Travelling Allowance (the TA determination) shown in Table 3-2 below.

Table 3-2 Duplication

Instrument

Clause

Provision Applies to Comment

Remuneration Tribunal Determination 2008/15 – TA

2.10(e)

TA shall be payable for: …meetings of his or her parliamentary political party executive … outside Canberra or direct travel to or from such meetings; or...

All senators and members.

All the travel contemplated under clause 2.10(e) is covered by clause 2.10(f).

Remuneration Tribunal Determination 2008/15 – TA

2.10 (f)

TA shall be payable for: …meetings, other than in Canberra, of a parliamentary political party, or of its executive, or of its committees, and attendance at the national and state conferences of a political party, of which he or she is a member…and meetings outside the electorate on electorate business up to a maximum of ten overnight stays per annum in total, and direct travel to or from such meetings or conferences;

All senators and members.

See comments regarding clause 2.10(e) above.

When senators and members are claiming travelling allowance they are required to specify the clause of the determination that authorises their claim.  The wording in the determination leads parliamentarians and the departmental officers assisting them to search for subtle differences in meaning between the two clauses, and hampers the provision of definitive advice.  This duplication also creates a risk of administrative error and increases the risk of inaccurate reporting.

Overlap

Conditions that foster the overlap of entitlements within the framework are:

The effect of each of these conditions is cumulative.  That is, the more complex and fragmented the framework is, the greater the risk that a new decision will overlap with an existing entitlement.  Overlap is particularly common within the framework where specific conditions have been set for particular office holders or for very small groups of senators and members.

As shown in the example outlined in Appendix 3, telephone services for senators and members are provided through seven overlapping entitlements under four heads of authority.

The effect of overlap is that a reader (whether a decision-maker or any other interested party) who does not have access to an unpublished decision cannot be certain that they have considered the whole field of relevant entitlements and administrative conditions in relation to a particular subject. This is particularly the case where a published head of authority overlaps with an unpublished decision under executive authority or an approval by the minister under the PE Act.

This situation increases the risk of misinterpretation by parliamentarians and their staff, and of inaccurate advice being provided by Finance.  It also increases the risk of further fragmentation and inconsistency when new decisions are made.  For example, the number and distribution of telephone entitlements under the current framework increases the risk that a minor entitlement could be omitted from overarching decisions that are intended to cover all telephone use.

Split sources of entitlement

Within the current framework, entitlements that are wholly located within one legislative instrument tend to be either:

Broader entitlements, such as domestic and overseas travel, are distributed between the PE Act, the PE Regulations, the Remuneration Tribunal Determination Members of Parliament – Entitlements, related sub-legislative instruments and executive authority.  Within the current arrangement of the PE Act, there is also a structural division between the entitlements of backbench senators and members and those of office holders.  This further exacerbates the difficulty of administering entitlements.

A split between heads of authority is a precursor to some of the other framework problems discussed in this chapter, such as inconsistency, conflict and overlap.  It can impede action to fill identified gaps in the framework, as it may not be immediately obvious who should assume responsibility for addressing an issue, or where a solution might be best located.

As discussed under 'Overlap' above, interested parties who read the current framework cannot be certain that they have considered the whole field of relevant entitlements and administrative conditions in relation to particular subject matter. 

Gaps

The structure of the current entitlements framework allows gaps to remain unaddressed, partly because of the distribution of responsibility discussed above, and partly because of the ad hoc development of the framework.  Grouping like tools of trade together under cohesive legislation would assist parliamentarians with the use of their entitlements, and with the future interpretation of entitlements, including the assessment of how the entitlements framework might apply to emerging problems.

Redundancy

A number of entitlements within the current framework have become redundant through:  lack of regular review; the relationship between legislative instruments (for example, the capacity under section 9 of the PE Act for a Remuneration Tribunal determination to vary or omit a scheduled benefit under the Act); and a historical reluctance to remove entitlements.

Examples of redundant entitlements, demonstrating the inter-relationship between framework problems, are shown in Table 3-3 below.

Table 3-3 Redundant Entitlements

Instrument

Item

Entitlement

Reason for redundancy

Comment

PE Act

Items 6(1A) and 6(2)(b), Part 2, Schedule 1

Dedicated Data Line

Lack of review.

The term dedicated data line is redundant as a result of technological change.  The term is now used as a head of authority for home internet access, usually provided by ADSL on an existing telephone line.

Remuneration Tribunal Determination 2006/18 Clause 10.2

PE Act

Item 8(a), Part 1, Schedule 1

Travel within Australia on first‑class domestic services.

Relationship between legislative instruments.

The apparent inconsistency between the two heads of authority is resolved in two ways:

  • First-class airfares are not generally available on domestic services, so the provision in the Act is functionally redundant.
  • Arguably, clause 2.6 of the determination varies item 8(a) in accordance with section 9 of the PE Act and section 7 of the Remuneration Tribunal Act 1973.
Remuneration Tribunal Determination
2006/18
Clauses 2.1, 2.6 Cost of travel within Australia shall not exceed the cost of a business-class air fare.

Remuneration Tribunal Determination  2008/15 - TA

Clause 2.21

Travelling allowance for Second Deputy Speaker.

Lack of review.

Departmental records indicate that there has only ever been one claim against this clause – for one night in 2004.  This indicates that either the role of Second Deputy Speaker does not require sufficient additional travel to justify additional TA or that other mechanisms are available within the framework to cover the costs of travel.


Transparency

A transparent and accountable framework for the administration of parliamentary entitlements is in the best interests of the government and the parliament.  Opacity can lead to public perceptions that the system is open to abuse even though the vast majority of parliamentarians are honest users of their entitlements.

Past internal and external examinations of the system have found that overwhelmingly senators and members attempt to work within what are undoubtedly complex entitlements and expenditure rules and obligations.  In any entitlements system, let alone the one covering parliamentarians, transparency, accountability and administrative simplicity are highly desirable.  The framework should be able to operate efficiently, with claims administered promptly, honest mistakes notified and rectified quickly, and instances of exploitation or abuse investigated and sanctions swiftly applied.  Furthermore, the public deserves assurance that there are adequate controls to ensure that public money is being properly spent.

The government has undertaken to expand the current six-monthly reporting arrangements which apply to some travel expenditures to cover all the expenditure of senators, members, former parliamentarians, family members and employees that is paid by Finance.53 This measure will improve the openness and transparency of the system as well as assist in improving the confidence of the Australian people in the system.  These reports will be available from the department’s website.  A more transparent framework would help assure the public that the remuneration paid to parliamentarians and entitlements provided to support their parliamentary and electorate business are justified.


42. Senate Finance and Public Administration Legislation Committee (2006) Estimates, 25 May 2006, F&PALC12, Canberra.

43. Australian National Audit Office (2001), Parliamentarians’ Entitlements: 1999-2000, ANAO Audit Report No.5 2001-02, ANAO, Canberra.

44. Australian National Audit Office (2003) Administration of Staff Employed Under the Members of Parliament (Staff) Act 1984, Audit Report No.15 2003-04, ANAO, Canberra.

45. Australian National Audit Office (2009) Administration of Parliamentarians’ Entitlements by the Department of Finance and Deregulation, Audit Report No.3, 2009-10, ANAO, Canberra, p.17.

46. Ibid., pp.54-67.

47. The current Administrative Arrangements Order, dated 25 January 2008, is available from the website of the Department of the Prime Minister and Cabinet at: http://www.dpmc.gov.au/parliamentary/docs/aao.pdf.

48. Submission to the review by the Department of Finance and Deregulation, p.2.

49. Submission to the review by the Commonwealth Remuneration Tribunal, p.1.

50. Refer for example to clauses 13.2 and 13.3 of Remuneration Tribunal Determination 2006/18, which set out the powers of the Special Minister of State to make decisions about matters not covered by the determination (clause 13.2); and to make procedural rules and guidelines to give effect to entitlements provided under the determination (clause 13.3).

51. Ibid., p.3.

52. S.48 reads: “Until the Parliament otherwise provides, each senator and each member of the House of Representatives shall receive an allowance of four hundred pounds a year, to be reckoned from the day on which he takes his seat”.

53. Ludwig, J Special Minister of State, (2009) Reform of Parliamentary Entitlements, Canberra, 8 September.

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Last Modified: 23 March, 2011