MP's salary and entitlements

The Remuneration Tribunal has today set MPs base salary at $185 000 effective from 15 March 2012. This amount was foreshadowed in the Tribunal’s statement and initial report released on the 15 December 2011. The setting of the base salary had been dependent on the Government introducing legislation to delink increases in base salary and additional salary with the benefits received by former members under the Parliamentary Superannuation Contributory Scheme 1948 (PCSS).

Following the passage of the Remuneration and the other Legislation Amendment Bill 2011 and the Members of Parliament (Life Gold Pass) and other Legislation Amendment Bill 2012 this severing is complete. The Remuneration Tribunal has the authority to determine what portion of the base salary and additional salary will not be counted for superannuation purposes: that amount had been determined as $38 620 for base salary and 20% of the additional salary (as there are different levels of additional salary).

The Tribunal has also introduced additional salary for shadow ministers, set as a percentage of the base salary, which could be either 20.0% or 25.0%. The Tribunal has allowed the payment of additional salary for the make-up of the current shadow ministry but has foreshadowed that it expects the size of the shadow ministry to be equal to that of the ministry in the future.

Members of Parliament salary and entitlements

On 24 March the Special Minister of State, Hon Gary Gray, introduced the Remuneration and other legislation amendment bill 2011. This bill provides, among other matters, for the Remuneration Tribunal to determine MP’s base salary, currently $136 640, and ends the Parliament’s ability to disallow the remuneration determinations, that is senators’ and members’ pay increases. The Bill also requires the Tribunal, an independent statutory authority, to publish its reasons for the determination.

Since 1990 the Remuneration Tribunal has only had an advisory power with regard to the annual allowance (or base salary). After the relevant determinations are tabled, Parliament may resolve to disapprove (disallow) the determinations. In 1974 Parliament disallowed the Tribunal’s determination increasing the annual allowance to $20 000 per annum. In the thirty years since then Parliament has also modified determinations, postponed increases and enacted reduced allowances previously determined by the Tribunal. The most recent example of wage restraint was the pay freeze that occurred from 1 July 2008.