OMMONWEALTH OF AUSTRALIA.
SPEECH
The Rt. Hon. SIR ROBERT MENZIES,
M. P.,
ON THlE
PARLIAMENTARY ALLOWANCES BILL
1964 AND ASSOCIATED BILLS.
[ Front the Parliamentary Debates," 28th October, 1964.]
Sir ROBERT MENZIES ( Kooyong-
Prime Minister) [ 3.221.-I move-
That the Bills be now read a second time.
Honorable members may recall that when,
in April 1959, 1 introduced legislation dealing
with Ministers of State, parliamentary
allowances and parliamentary retiring
allowances, I indicated the Governent's
view that these matters should be dealt
with every three years at the beginning of
each Parliament. What I said was-
The proposal to which effect is now being given
is a proposal that the salary and allowances of
members of this Parliament should be dealt with
every three years, at the beginning of each Parliament,
and that the decision should endure, except
for some quite phenomenal or catastrophic circumstances,
for the whole of the period of three years.
These, of course, are matters for Parliament
since, under section 48 of -the Constitution
of the Commonwealth, alterations in the
emoluments of members of the Parliament
must be made by Parliament itself.
The Government did not, in the event,
bring down any proposals at -the beginning
of the 24th Parliament-that is, the early
part of 1962-or at any time in the life of
that Parliament. It is now, therefore, more
than five years since the last review. Having
14043/ 64. regard to the great changes which have
occurred during this period in the r~ ates of
earning outside Parliament, and the increasing
pressure of parliamentary business, the
Government has decided ithat a review of
emoluments should not be further delayed,
but should be made now in respect of the
25th Parliament and to take effect from
1st November 1964. As regards parliamentary
retiring allowances, I shall say
something in detail a little later on. At
present I limit myself to the observation
that steps to amend the benefits upwards
are due, and in reality overdue. The increased
pension benefits proposed will, as
I will indicate later, require increased contributions
on the part of members.
In relation to increases in salaries and
allowances, the Government is again convinced
that the adjustments proposed are
due, and even overdue. Circumstances are,
of course, never really propitious for dealing
with parliamentary salaries and allowances.
Certainly some people are always found to
say, " Now is not the time". No doubt
on this occasion, as in the past, that will
be said. But to understand the Government's
decision it is only necessary to understand
the facts pertaining to salary incomes.
Recently the Leader of the Opposition ( MT.
Calwell) asked me if I would make available
to the House certain information and
comparisons in the parliamentary pension
and salary field and in certain related areas
of salary, for instance in the Public Service.
I agreed, as I said at the time, with the
implication of the honorable member's request;
that is, that a first requirement in this
matter is to have and to study the facts.
The Leader of the Opposition added-
Most imporiantly, will his Government take suitable
action to adjust parliamentary and electorate
allowances in such appropriate fashion and at such
time as it deems desirable in the light of movements
in the directions that I have just instanced?
As honorable members know, material,
in response to the honorable member's
request, has been tabled by my colleague,
the Deputy Prime Minister ( Mr. McEwen),
on my behalf. This material shows what
I may call a cycle of increases in salary'
incomes since the 1959 adjustment of Parliamentary
salaries and allowances. The
salaries and allowances of members of State
Parliaments, which were increased following
the Commonwealth adjustment of
March 1959 have, with the exception of
Victoria, been increased again by substantial
amounts in 1963 or 1964.
A very significant comparison may be
made with the position of members of the
Assembly in the State Parliament of New
South Wales. Their salary is œ 2,650. Members
of the National Parliament, a parliament
which has to deal with the greatest
national and international problems and
with a vast complex of social, economic
and financial responsibilities, now receive
œ 2,750. The State electorate allowances
range from œ 650 to œ 1,050, the Commonwealth
from œ 850 to œ 1,050. Clearly, this
state of affairs ought not to continue, and
only this Parliament can change it.
Both this year and last year there have
been large increases in Public Service
salaries-in the professional grades and the
administrative grades and, I may add,
largely as a result of arbitration. As I shall
be indicating a little later, when I come to a
subsequent -bill, there are now to be, on the
decision of the Government, necessary
adjustments in the salaries in the First
Division of the Public Service, that is
to say in the salaries of the Permanent
Ieads of Departments and also of statutory
officers and related officers. I shall come to
that matter later when moving the second reading of a subsequent bill, but I just
interpose on my own remarks at this stage
to say that, as a result of all these changes
that have been made through aribitral processes,
there are officers in the Second
Division of the Public Service who are now
being paid more than the Permanent Heads
who are in the second grade of Permanent
Heads. This, of course, is a state of affairs
that really nobody could allow -to continue
if we are to have an orderly and properly
organised Public Service.
The Government has necessarily had
regard to all these developments and I
believe that thoughtful and reasonable
people will, on the evidence, be ready to
accept that increases are now justified. We
have considered whether, even though the
salary adjustments are more than due, we
ought ' to defer them still longer. We have
concluded that we should not. In the first
place, we are firm in our view that the
adjustments are warranted. In the second
place, they are adjustments which come at
the end of a cycle of adjustments and not
at the beginning.
Sir, as politicians-and we must all plead
guilty to being politicians-we are well
aware of the facts that increases in the
provision for Federal members are always
attacked-this seems to be something from
which State members have a certificate of
exemption-and that a Sena'te election is
in front of us.
Nevertheless, we are convinced that
' honest dealing with the electors requires that
they should know right away what our proposals
are; we believe that they will
appreciate the propriety of this course, and
that on proper consideration they will see
the fairness of the changes that are being
made. On some previous occasions a review
has been approached by first having an
independent committee inquire and report
to the Government. We had the Nicholas
Committee in 1951. In 1955 and 1959, we
had a committee of inquiry under the
chairmanship of Sir Frank Richardson.
This, however, has not been an invariable
practice. On other occasions, the Government
of the day itself has brought proposals
to Parliament without recourse to such a
committee, and we have decided to do that
on this occasion. We decided against a
committee because what we are now proposing
to the House is essentially an
upgrading of the amounts applying under
the existing arrangements for salaries,
allowances and retiring allowances. It is not
a review of the structure of the arrangements
or of other parliamentary privileges.
Honorable members will see that the
salary of members and senators is to
increase by œ 750 per annum to œ 3,500 per
annum. As there are misapprehensions inI
some quarters, I would like to make it clear
that members' salaries, like ministerial
salaries, are -taxable at the normal rates.
Thus, the increase of œ 750 is subject to
income tax-say, œ 280 in an average case,
and this is a modest figure-and to an
increased retiring allowance contribution-
œ 143-a matter that I shall refer to later.
This means that the net current cash gain,
if I may so describe it, to the member is
œ 327 per annum.
The supplementary salaries of Ministers
and other office bearers have been increased
broadly in parallel with this basic increase.
In the case of senior Ministers and the
Leader of the Opposition the increases
range from œ 1,000 per annum to 1,250
per annum; in the case of junior Ministers,
the increase is œ 750 per annum. In general,
the increases represent of the order of
per cent, of the 1959 level-a little more
in some eases, a little less in others. The electorate allowances have been
increased, by no means extravagantly, by
œ 250 per annum, while special allowances
have been increased by amounts varying
for different offices-from 100 per annum
in the case of Whips, to L2504œ 300 per
annum in the case of Ministers and the
Leader of the Opposition in the House, and
œ 500 per annum in the case of the Prime
Minister. Electorate allowances are, of
course, granted to cover expenses incurred
by members and their wives in discharging
their public responsibilities. These costs have
increased significantly since 1959. The same
can be said of the costs of discharging the
duties of various parliamentary offices.
These expenses, which private citizens do
not normally encounter, are ones which, in
turn the special allowances are designed
to cover.
It is proposed, although this will be done
administratively, to increase travelling
allowances for senior Ministers and the
Leader of the Opposition by œ 3 per day
and for junior Ministers and members by
2 per day. As I do not want to take up
time by reading through a mass of figures,
with the concurrence of honorable members
I incorporate in " Hansard " a statement
setting out in detail the proposed
changes in salaries and allowances. Copies
of the statement are available to honorable
members and the Press.
THE COMMONWEALTH PARLIAMENT
SALARIES AND ALLOWANCES
SUMMARY OF PROPOSED CHANGES
1. Members-Salary Electorate Allowance-
Senator
City Electorate
Country Electorate
Travelling Allowance ( per day)
2. Ministers-Salary ( additional to I above)-
Prime Minister
Deputy Prime Minister ( not being Treasurer)
Treasurer Other Senior Ministers..
Junior Ministers
Special Allowance ( additional to I above)-
Prime Minister.
Senior Ministers
Junior Ministers
Travelling Allowance ( per day)-
Prime Minister
Senior Ministers
Junior Ministers Present IProposed
per annumn per annumn
L 2,750 800 850
1,050 4 f 3,500 1,050 1,100 1,300 6
8,500 5,000
4,900 4,250 3,000 4,000 1,800 1,500 18 12
Present Proposed
per annumn per annumn
3. Other Office Bearers-
Salary ( additional to I above)-œœ
President and Speaker .2,250 3,000
Chairman of Committees 1,000 1,250
Leader of Opposition ( Representatives) 3,250 4,250
Leader of Opposition ( Senate) 1,500 2,000
Deputy Leader of Opposition ( Representatives) 1,500 2,000
Deputy Leader of Opposition ( Senate) 500 650
Leader of Third Party ( subject to existing conditions) 750 1,000
Special Allowance ( additional to I above)-
President and Speaker 500 600
Leader of Opposition ( Representatives) 1,500 1,800
Leader of Opposition ( Senate) 500 600
Deputy Leader of Opposition ( Representatives) 500 600
Deputy Leader of Opposition ( Senate) 250 300
Leader of Third Party ( subject to existing conditions) 250 300
Government Whip ( Representatives) .500 600
Other Whips 400 500
Travelling Allowance ( per day)-
President and Speaker 10 12
Leader of Opposition ( Representatives) 12
Deputy Leader of Opposition ( Representatives) .10 12
The actual adjustments to salaries and allowances
must, inevitably, be in some degree a
matter of judgment. Obviously, the adjustments
must have regard to adjustments
which have already been made in other
incomes. Incidentally, average earnings in
Australia have risen 35 per cent, since early
1959. The adjustments must have regard to
trends in expenses incurred by members and
office bearers. We have considered the facts
on both these points and the proposals now
before the Housc have been devised having
regard to the facts. We believe that the
basis arrived at is justified by the facts and
is one which will serve to sustain the quality
and prestige of the National Parliament.
I turn now to members' retiring allowances,
the amounts of which are no longer
appropriate to the increased parliamentary
salaries. In considering the standard of
benefits, we concluded that members should
be entitled to contribute for a basic pension
which, in ordinary circumstances, would be
per cent, of the salary they were receiving
on retirement. The 1959 legislation
resulted in 30 per cent. of the cost of pensions
being met from members' contributions
to the Fund. I want to emphasise that,
because I think it is little understood around
Australia that this is a contributor'y pensions
scheme. We have preserved this basis of
financing in adopting the scale of contributions
which the Commonwealth Actuary has
calculated for the benefits set out in the Parliamentary Retiring Allowances Bill. The
contribution henceforth will be III per
cent. of salary, or, as I indicated a little
earlier, œ 7 14s. 10d. per week on the proposed
salary. The scheme has now been in
force since 1948 -and, in the course of our
review of the Fund, the Actuary reported
that at 26th March 1963 there was a substantial
surplus in the Fund, which then
amounted to œ 77,000, and which now would
undoubtedly exceed œ 100,000. This surplus,
which has -been built up entirely from the
contributions of members, has enabled us
to review the rates of pension now being
paid. There are many who were once well
known in this Parliament and who are now
receiving pensions at the rates prevailing
prior to the 1959 legislation. We have decided
to raise these pensions to the rates
that were adopted in 1959 and, as a result
of the surplus in the Fund, 30 per cent. of
the cost of these pensions will be met from
the Fund. Those who have retired since the
1959 legislation will receive either a lump
sum payment from the surplus or an
increased pension related to 50 per cent. of
the parliamentary salaries hitherto in force.
These pensions will also be financed on the
basis of 30 per cent, from the Fund.
Finally, as I said in my speech in 1959,
we have examined the possibility of a contributory
scheme to give very much modified
effect to the recommendations of the
Richardson Committee for a supplementary
scheme for Ministers and certain other
office bearers. The scheme now to be introduced,
based upon actuarial advice, provides
for a basic contribution rate of œ 4 5s.
per week and pensions varying with service
from a minimum of eight years to a maximum
of fourteen years. That will be service
as a Minister or as Leader of the Opposition
or whatever the office may be. Mr. Calwell.-Eight years of service in
the position will be necessary before one
can qualify.
Sir ROBERT MENZIES.-That is right.
The contribution rates have also been calculated
on a basis to ensure that 30 per cent.
of the pensions will be met from the Fund.
I commend these three Bills to the House.
BY AUTHORITY: A. J. ARTHUB, COMMONWEALTH GOVERNMENT PRINTER, CANBERRA.
14043/ 64.-2