EXPLANATORY STATEMENT

Defence Determination 2017/6

This Determination amends Defence Determination 2016/19, Conditions of service (the Principal Determination), made under section 58B of the Defence Act 1903 (the Defence Act) and in accordance with subsection 33(3) of the Acts Interpretation Act 1901 (AIA Act). Determinations made under section 58B of the Defence Act are disallowable legislative instruments subject to the Legislation Act 2003. These instruments are also subject to the interpretation principles in the AIA Act, as modified by section 58B of the Defence Act.

Chapter 15 of the Principal Determination sets out provisions dealing with living and working on long-term posting overseas for members of the Australian Defence Force.

This Determination has the following three purposes.

• To implement revised post indexes for ADF members at overseas posting locations. A data service provider works out the post index from local prices surveyed in March and September each year. An exchange rate movement in the national currency of 2 per cent or more since the post index was last varied then prompts an amending Determination to vary the post index.
• To provide the current amount a member contributes towards overseas public transport costs.
• To provide the current amount a member contributes towards their child's overseas school transport costs.

Section 1 of this Determination sets out the manner in which this Determination may be cited.

Section 2 of this Determination provides that the Determination commences on the following dates.

• Sections 1 to 4 commence on 1 March 2017.
• Section 5 commences on 9 March 2017.
• Sections 6 to 9 commence on 1 March 2017.

Section 3 provides that this instrument has authority under section 58B of the Defence Act 1903.

Section 4 specifies that the amendment is made to the Principal Determination, as amended.

Section 5 repeals and substitutes Annex 15.2.A of the Principal Determination. The new table changes post indexes at a range of posting locations. The changes are due to recent exchange rate movements. The following summarises the changes.

• The applied and published post index rates decreased for Belgium, Cambodia, Canada (all locations), China, Ethiopia, Fiji, France (Paris), France (Other), Germany, Indonesia, Italy (all locations), Jordan, Kuwait, Marshall Islands, Micronesia, Netherlands, Palau, Saudi Arabia, Singapore, Spain (Madrid), Thailand, Timor-Leste, United Arab Emirates and USA (all locations).
• The published post index rates decreased for Brunei, Malaysia, Myanmar, Pakistan, Philippines, Spain (Other), Sri Lanka and Vietnam. However, as the indexes were below 100 the last time the index changed and have remained below 100, there is no affect to the benefits paid to members in these locations.

Sections 6 and 7 amend section 15.3.7 of the Principal Determination, which provides for reimbursement of excess public transport costs in an overseas location. The member contribution amount for public transport is reviewed annually based on the cost of public transport in Canberra. The following amendments have been made.

• Section 6 increases the member contribution amount by 2.3%.
• Section 7 repeals and substitutes the example in subsection 15.3.7.4 of the Principal Determination. The example shows how to calculate the amount a member may be reimbursed for excess public transport costs. The new example contains new figures consequential upon section 6 of this Determination.

Sections 8 and 9 amend section 15.6.11 of the Principal Determination, which provides for reimbursement of excess school transport costs for dependants in an overseas location. The member contribution amount for school transport is reviewed annually based on the cost of school transport in Canberra. The following amendments have been made.

• Section 8 increases the member contribution amount by 2.7%.
• Section 9 repeals and substitutes the example in subsection 15.6.11.4 of the Principal Determination. The example shows how to calculate the amount a member may be reimbursed for excess school transport costs. The new example contains new figures consequential upon section 8 of this Determination.

Consultation

Consultation is not considered necessary for the post indexes and excess commuting cost rate adjustment processes as they fall within the bounds of routine, house keeping of an established benefit. The post index data is provided to Defence from a recognised data provider and the adjustments are made according to established policy. Where a post index adjustment results in a major change to any particular country/location, the overseas post is provided with advance notification of the pending change.

Authority:  Section 58B of the
Defence Act 1903

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Defence Determination 2017/6, Post indexes and overseas excess commuting costs – amendment

This Determination is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Determination

This Determination has the following three purposes.

• To implement revised post indexes for ADF members at overseas posting locations. A data service provider works out the post index from local prices surveyed in March and September each year. An exchange rate movement in the national currency of 2 per cent or more since the post index was last varied then prompts an amending Determination to vary the post index.
• To provide the current amount a member contributes towards overseas public transport costs.
• To provide the current amount a member contributes towards their child's overseas school transport costs.

Human rights implications

Post indexes

Right to the enjoyment of just and favourable conditions of work

The protection of a person's right to remuneration engages Article 7 of the International Covenant on Economic, Social and Cultural Rights. Article 7 guarantees just and favourable conditions of work, including remuneration, safe and healthy conditions, equal opportunity and reasonable limitations.

Legitimate objective: Defence members are posted to perform duty in overseas locations. This could cause the member and their family economic hardship if the location has a high cost of living. The purpose of a post index is to show the relative cost of living at a posting location compared with Australia. This is then used to calculate various overseas allowances.

Reasonable, necessary and proportionate: This Determination adjusts the post indexes to ensure that an affected person continues to receive just and favourable remuneration. The post indexes and associated overseas allowances assist the member and their family to not suffer a disadvantage because of the requirement for the member to live and work overseas.

Excess commuting costs

Right to the enjoyment of just and favourable conditions of work

The protection of a person's right to remuneration engages Article 7 of the International Covenant on Economic, Social and Cultural Rights. Article 7 guarantees just and favourable conditions of work, including remuneration, safe and healthy conditions, equal opportunity and reasonable limitations.

Legitimate objective: This Determination adjusts member contribution rates towards public transport costs and school transport costs, for members posted overseas.

Reasonable, necessary and proportionate: A policy principle underpinning many aspects of ADF member overseas conditions is that members posted to locations that are more expensive to live in than Australia should not be disadvantaged by those expensive local conditions and the Commonwealth should provide a subsidy to the member. Transport cost benefits are examples of the application of this policy.

Members in Australia are not ordinarily reimbursed their costs of getting to work, or the costs of their children getting to school. It is a long-standing industrial principle that these are private expenses. The public transport and school transport benefits do pay for these expenses, but the member is required to make a contribution. The contribution for public transport costs and school transport costs is based on the Australian public transport cost (with Canberra's costs chosen as a benchmark, as there is some fluctuation between States).

The requirements on members to contribute towards these benefits ensure that they do not receive a 'windfall gain' by being posted to an expensive overseas location, but have approximate parity with their working conditions in Australia.

Conclusion

This Determination is compatible with human rights because it does not limit any human rights.

Lisa Annette Arnold, Acting Assistant Secretary People Policy and Employment Conditions