Bills Digest no. 91 2005–06
Ministers of State Amendment
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Contact Officer & Copyright Details
State Amendment Bill
House: House of Representatives
Portfolio: Finance and
commences on the date of Royal Assent
To amend the Ministers of
State Act 1952 to increase the limit of the amount payable in
any financial year from the Consolidated Revenue Fund from $2.8
million to $3.2 million.
Members of Parliament receive an annual allowance (also referred
to as parliamentary base salary) as well as other allowances and
benefits. Ministers receive an additional salary by virtue of their
position within the Executive.
The Ministers of State Act 1952 appropriates monies for
payment of ministerial salaries and determines the maximum number
of ministers of state.
For detailed background information and the current status of
Members and Senators allowances and benefits see the following
Section 48 of the Constitution provides for the payment of an
allowance to Members and Senators:
Until the Parliament otherwise provides, each
senator and each member of the House of Representatives shall
receive an allowance of four hundred pounds a year, to be reckoned
from the day on which he takes his seat.
Since 1901, the Parliament has enacted legislation to define the
annual allowance for the purposes of Section 48 of the
Constitution. The role of the Remuneration Tribunal in this process
is to conduct reviews of members and senators allowances at least
annually and to provide advice to the Government on the outcome.
Schedule 3, section 1(3) of the Remuneration and Allowances Act
1990 provides that the Governor-General may make regulations
in relation to prescribing a percentage of the reference salary
(section 2(b)) and the Minister for Employment and Workplace
Relations must consider advice from the Remuneration Tribunal about
the proposed regulation.
The Research Note entitled The Annual allowance for senators
and members sets out in detail how the annual allowances for
senators and members are calculated.
Reference Salary under the PEO
Report 1999/01 by the Tribunal recommended that the annual
allowance be linked to a reference salary under the Principle
Executive Office (PEO) Classification Structure.(8) The
Government accepted this recommendation and made the
Remuneration and Allowances Regulations 2005 to create the
link. The Regulations provide for the reference salary to be 100
per cent of the rate determined by the Remuneration Tribunal for
Band A of the PEO Classification.
The annual allowance for senators and members is
linked to Reference Salary A under the PEO Band A
Classification $111 150 per annum from 1 July
The applicable Remuneration Tribunal Determination
Determination 2005/19, Principal Executive Office (PEO)
Classification Structure and Terms and
It is the Principal Executive Office Structure rates which
have been adjusted in 2005. As the senators and members
annual allowance is linked to this structure as described above,
any adjustments which occur in the PEO structure flow on to the
senators and members annual allowance. Consequently, with the
increase to the annual allowance of senators and members
(parliamentary base salary) on 1 July 2005, the additional salary
of Ministers of State also increased because Ministers salaries are
expressed as a percentage of the annual allowance.
Section 66 of the Australian Constitution provides for the
payment of Ministers of State:
There shall be payable to the Queen, out of the
Consolidated Revenue Fund of the Commonwealth, for the salaries of
the Ministers of State, an annual sum which, until the Parliament
otherwise provides , shall not exceed twelve thousand pounds a
The Remuneration Tribunal is empowered, by
ss. 6(1) of the Remuneration Tribunal Act 1973, to
report on salary for Ministers of State.
Ministerial salary is expressed as a percentage of the annual
allowance (basic parliamentary salary). The Tribunal's Report
Number 1 of 2005
Report on Ministers of State - Salaries Additional to the Basic
Parliamentary Salary confirms the percentage rates that
currently apply. (2) The percentage rates that currently
apply can be found in the e-brief at footnote 2.
The Remuneration Tribunal is required to report to
Government annually on the additional salary payable to Ministers.
Under the Constitution, the salaries of Ministers are a matter for
decision by Executive Government, and do not require legislative
action for implementation. The Ministers of State Act 1952, as
amended, makes provisions for an annual appropriation which is
apportioned in salaries to the Prime Minister, Deputy Prime
Minister, Treasurer, Leader of the Government in the Senate, Leader
of the House, other Ministers and Parliamentary Secretaries.
Report No. 1 of 2005 Report on Ministers
of State- Salaries Additional to the Basic Parliamentary
Salary made no change to the percentage of annual allowance
for ministers of state. The percentage of annual allowance and the
categories of office remained the same as those reported in Report
Number 2 of 2004. Report Number 1 of 2004 had made two amendments
to the categories of office but no change to the percentage of
annual allowance. The amendments included a category Other
Minister in Cabinet who is also Manager of Government Business in
the Senate with the same percentage of salary as the Leader of
the House. An amendment was made to the category of Manager of
Government Business in the Senate to change it to
Parliamentary Secretary who is also Manager of Government
Business in the Senate. There have been no recent changes to
the percentage rates.
This is a special appropriation for ministers salaries and is
administered by the Department of Finance and Administration. In
the 2005-06 Portfolio Budget statement for the Department of
Finance and Administration, a special appropriation of $2.753
million has been allocated for ministers salaries.
Schedule 1, Item 1 amends section 5 of the
Ministers of State Act 1952 to increase the limit in
relation to the amount appropriated from the Consolidated Revenue
Fund from $2,800,000 to $3,200,000.
Item 2 provides that the amendment to the Act
will apply to the financial year commencing on 1 July 2005 and will
apply to financial years which follow.
The increase in the amount of the limit on the appropriation for
ministers salaries in the Act will allow the increases that have
occurred in ministers salaries recently to be met and to allow for
possible future increases in accordance with the annual reviews
conducted by the Remuneration Tribunal.
Leanne Manthorpe, The Annual Allowance for Senators and Members,
Research Note No. 1 2005-06 http://www.aph.gov.au/library/pubs/rn/2005-06/06rn01.htm
Leanne Manthorpe, Parliamentary allowances, benefits and
salaries of office, E-Brief, http://www.aph.gov.au/library/intguide/POL/Parlrem.htm
Remuneration Tribunal, Report No.1 of 2005, Report on Ministers
Bills Digest Service
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© Commonwealth of Australia 2006
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