FOR MEDIA 1 JULY 1986
The Government has rejected an increase of 11.7 per cent in
salaries payable to Parliamentarians recommended by the
Remuneration Tribunal's 1986 review.
The Tribunal, which reviews the remuneration payable to
Ministers* Senators and Members, Judges, Members of the
Inter-state Commission, Secretaries of Commonwealth
Departments and holders of public offices, presented its
report to the Government last week. It has recdmmended no
change in the general levels of salaries except in relation
to Parliamentarians where it has recommended strongly the
removal of an anomaly which has existed since 1984.
The anomaly has arisen because the Government has
consistently set an example in wage restraint by either not
accepting or reducing the increases recommended by the
tribunal. In its submission to the Tribunal this year the
Government, while recognising that a real anomaly existed,
submitted that it would not be appropriate to increase
Parliamentarians' salaries at this time. The Tribunal has
argued. however, for an Increase now and has stated that
compliance with its statutory obligation, and fairness and
equity required that the anomaly be removed.
The Government has nevertheless decided that in the
Interests of restraint generally It will forego the Increase
recommended by the Tribunal. The only Increases to apply to
Parliamentarians' salaries will be those resulting from
National Wage decisions.
On a related matter It should also be noted that, contrary
to some assertions, Parliamentarians are subject to the same
taxation requirements as other taxpayers In relation to
their fringe benefits and the allowances. Indeed the
particular circumstances of many parliamentarians Is such
that their disposable -income is likely to fall as a result
of the tax package.
The net outcome for particular Parliamentarians will depend
to a large extent on the degree to which they spend expense
of office and electoral allowances on deductible expenses,
Like all other taxpayers# they will be required to maintain
suitable expenditure records from today to support
deductions for employment-related expenses. Any allowan~ ces
not spent on deductible Items will attract Income tax.
2.
This may well result in some significant increases in tax
liabilities for individuals. In this regard, it is
particularly relevant that entertainment expenses may no
longer be claimed as tax deductions. Parliamentarians have
significant expenses in this area, but will no longer be
able to claim deductions in relation to them. Accordingly a
significant part of their expense allowances are likely to
become subject to full taxation from today.