REMUNERATION TRIBUNAL

Explanatory Statement:  Determination 2017/07
Specified Statutory Offices – Remuneration and Allowances

1. The Remuneration Tribunal Act 1973 (the Act) establishes the Remuneration Tribunal (the Tribunal) as an independent statutory authority responsible for reporting on and determining the remuneration, allowances and entitlements of key Commonwealth office holders.  These include members of Parliament, Judges of Federal Courts, most full-time and part-time holders of public offices including Specified Statutory Offices and Principal Executive Offices.

Consultation

2.                 Section 11 of the Act advises that in the performance of its functions the Tribunal:

• may inform itself in such manner as it thinks fit;
• may receive written or oral statements;
• is not required to conduct any proceeding in a formal manner; and
• is not bound by the rules of evidence.

3.                 The Tribunal normally receives submissions on remuneration from a portfolio minister, or a secretary, program manager or employing body (in respect of a Principal Executive Office) with responsibility for the relevant office(s).  The Tribunal will normally seek the views of the relevant Portfolio Minister prior to determining remuneration for an office.

4.                 The Tribunal may reach a decision based on the information provided in the submission and other publicly available information such as portfolio budget statements, annual reports, corporate plans, legislation and media releases.  On occasion it may wish to meet with relevant parties or seek further information from the relevant minister or person making the submission.

5.                 Amongst other relevant matters in deliberating on appropriate remuneration for an office the Tribunal informs itself on:

• the main functions, responsibilities and accountabilities of the office;
• the organisational structure, budget and workforce;
• the requisite characteristics, skills or qualifications required of the office holder(s); and
• the remuneration of similar, comparator, offices within its jurisdiction. 

Annual review

6.                 The Tribunal has an obligation, under sub-sections 7(1), (2), (3) and 8(1) of the Act to make determinations in respect of remuneration for various offices within its jurisdiction at periods of not more than one year.  In meeting this obligation the Tribunal decides whether any general adjustment to remuneration should occur.  The Tribunal issued determinations in December 2016 and at that time made no general adjustments to remuneration.

7.                 In considering whether any general adjustment should occur the Tribunal takes account of a range of economic conditions in Australia, including trends in public and private sector remuneration.  In order to inform its conclusions the Tribunal draws upon authoritative external sources such as the published material available from the Government, the Reserve Bank of Australia and the Australian Bureau of Statistics.  It is obliged by the Act also to consider the Annual Wage Reviews of the Fair Work Commission.  The Commission’s 2017 decision was released on 6 June 2017.

8.                 The Tribunal did not receive any submissions on this matter.

9.                 On 22 June 2017 the Tribunal notified its decision to increase remuneration by 2 per cent for public offices in its jurisdiction with effect from 1 July 2017.  A statement setting out the Tribunal’s reasons for decision is available at www.remtribunal.gov.au.

10.             Determination 2017/07 implements the Tribunal’s decision for Specified Statutory Offices.

11.             Consultation on these amendments was considered unnecessary given the matters considered by the Tribunal in making its decision.

Superannuation

12.             The term ‘Base Salary’ has been removed and replaced with the term ‘Superannuation Salary’.  Changes to the wording of the clauses regarding superannuation aim to simplify and clarify the existing arrangements for members of defined benefit funds.  The changes have no impact on any individual’s entitlements.  The Tribunal consulted with the Funds and Superannuation Branch of the Department of Finance on these changes to ensure they complied with legislation covering the respective superannuation schemes.  

Salary Sacrifice

13.             The restriction on salary sacrifice, limiting office holder’s flexibility to 50 per cent of superannuation salary, has been removed.  Consultation on this amendment was considered unnecessary given an exception allowing agency policies to override the limitation had reduced its impact.  The Tribunal considered it unnecessary to apply any restriction to the amount an appointee may salary sacrifice, noting this is consistent with general remuneration practices.

Retrospectivity

14.             Any retrospective application of this determination is in accordance with subsection 12(2) of the Legislation Act 2003 as it does not affect the rights of a person (other than the Commonwealth or an authority of the Commonwealth) to that person’s disadvantage, nor does it impose any liability on such a person.

The power to repeal, rescind and revoke, amend and vary

15.             Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Details of the determination are as follows:

PART 1 – GENERAL

16.             Part 1 specifies the authority for and the commencement date of the determination and revokes and supersedes the previous principal Determination 2016/14 applying to the offices covered by this determination. 

17.             The definition of ‘Base Salary’, and the reference to ‘Base Salary’ in the definition of ‘Total Remuneration’, has been removed. This change has been made to simplify and clarify the determination in relation to defined benefits superannuation funds.

18.             The other provisions in Part 1 remain unchanged from those contained in Part 1 of the superseded determination.

PART 2 – REMUNERATION AND RELATED MATTERS

19.             Clause 2.1 removes the reference to ‘Base Salary’ and specifies the commencement date for the Total Remuneration listed in Table 1 of Schedule A.

20.             Clause 2.2 removes the requirement for an office holder to take at least 50 per cent of Superannuation Salary as salary, except where agency policies and procedures on salary packaging allow otherwise.

21.             Clause 2.3.1 specifies the Superannuation Salary applicable to a Specified Statutory Officer who is a member of a Commonwealth defined benefits superannuation scheme, specified in Clauses 2.3.2, 2.3.3, 2.3.5 and 2.3.6 of this determination.

22.             The term ‘Base Salary’ has been replaced with ‘Superannuation Salary’ in Clauses 2.3.2, 2.3.3, 2.3.5 and 2.3.6. 

23.             Table 1 of Schedule A increases the Rates of Remuneration by 2 per cent, rounded, and specifies the commencement date for the Specified Statutory Offices listed in the Table.

PARTS 3 – 5

24.             Set out:

• the official travel provisions contained in Determination 2016/07 (or any Determination that supersedes 2016/07);
• the compensation for early loss of office provisions which are contained in Determination 2014/17; and
• the recreation leave provisions which are contained in Determination 2012/11.

25.             The provisions in Parts 3 to 5 remain unchanged.

               Authority: Sub-sections 7(3) and 7(4) of the Remuneration Tribunal Act 1973