Bills Digest no. 138 2009–10
Ministers of State Amendment Bill 2010
WARNING:
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
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Ministers of State Amendment Bill
2010
Date introduced: 17 March 2010
House: House
of Representatives
Portfolio: Special Minister of State
Commencement: On Royal Assent.
Links: The
links to the Bill, its Explanatory Memorandum and second
reading speech can be found on the Bills page, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To amend the Ministers of
State Act 1952 to:
- increase the maximum annual sum potentially payable as salaries
to Ministers of State under section 66 of the Constitution;
and
- introduce a regulation-making power to enable the
Governor-General to amend this maximum annual sum by regulation as
and when necessary.
This Bill increases the maximum amount potentially payable under
section 66 of the Constitution for the salaries of Ministers
(including Parliamentary Secretaries) for the current financial
year and for later financial years to $3.5 million. It is currently
$3.2 million. A Ministerial salary in this context means the
‘additional’ salary that a Parliamentarian receives
(over and above their base Parliamentary salary) by virtue of being
a Minister.
The Minister states the purpose for which the increase will be
used:
This amount needs to be increased to $3.5
million dollars to pay ministerial salaries at current levels for
2009-2010 (and for future financial years), and to meet any
additional expenditure, such as payment of additional salary for
acting arrangements.[1]
It should be noted that Ministers salaries are not being
increased in this Bill. The Remuneration Tribunal Report in 2009
setting out the rates per annum of the additional salaries
payable to Ministers of State has not altered from the additional
salaries set out in the Remuneration Tribunal report of
2007.[2] However, the
base pay or salary has increased from $127 060 to $131 040 in
October 2009.
The base pay for Federal parliamentarians is governed by the
Remuneration and Allowances Act 1990. Sub-clause 1(2) of
Schedule 3 of the Remuneration and Allowances Act 1990
provides that members of parliament’s annual salary is equal
to the minimum annual rate of salary payable to an SES employee
with a classification of SES Band 2; or a percentage of a reference
salary if the regulations so prescribe.[3] Since 1999, Ministers’ salaries
have been linked to the Tribunal’s Principal Executive Office
(PEO) Structure. The parliamentary base salary is $131 040
effective from 1 October 2009.[4]
The Remuneration Tribunal is required to report to the Minister
under subsection 6(1) of the Remuneration Tribunal Act
1973. The Remuneration Tribunal website states that:
The Tribunal is required to report to
Government annually on the additional salary payable to Ministers
(subsection 6(1) of the Act). 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 annual 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.[5]
The additional salaries payable to Ministers of State are
expressed as a percentage of the parliamentary base salary. For
example Ministers in Cabinet with some exceptions are 72.5 per cent
of the base salary while, other Ministers are 57.5 per cent of the
base salary.[6]
The Australian Constitution section 66 provides:
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 year.
Section 5 of the Ministers of State Act 1952 stipulates
a maximum annual amount that may be appropriated from the
Consolidate Revenue Fund for the purpose of paying Ministers’
salaries – as mentioned that amount is currently $3.2
million. The Bill proposes to introduce a regulation-making power
to enable the Government to increase this maximum amount more
easily. The Minister states:
There have been 29 amendments to the amount set
under section 5 of the Ministers of State Act 1952, since
its inception in 1952. This averages one amendment every two years.
This section was last amended in 2006 and is therefore well overdue
for the regular amendment. This constant cycle of amendments is not
the most efficient way of dealing with this matter. Enabling the
maximum sum available for salaries to be provided for by regulation
obviates the need for recurrent amendments to the Act. As such
regulations would be subject to disallowance, there will continue
to be parliamentary scrutiny of any future changes to the
amount.[7]
Note that the Ministers of State Act 1952 is not an
Appropriation Act: it does not actually authorise any
appropriation. Rather, money for the purpose of paying
Ministers’ salaries is appropriated under Appropriation
Act (No.1) 2009-2010 and is a special administered
appropriation under Outcome 3 of the Department of Finance and
Deregulation. It is listed under special appropriations as
Commonwealth of Australia Constitution Act 1901
(s.66).[8]
Note that provision in the
Bill allowing for the making of a regulation to alter the maximum
total funds for Ministerial salaries set out in section 5 is not a
Henry VIII clause. A Henry VIII clause is the ‘inclusion in
an Act of a power to amend either that Act or other Acts by
regulation’.[9] Any future regulations under this Bill do not
amend the Principal Act.
The Senate Selection of Bills Committee resolved to recommend
that the Ministers of State Amendment Bill 2010 not be referred to
committees.[10]
The Explanatory Memorandum states that the amendment will
increase the total sum available to be appropriated for ministerial
salaries by $0.3 million for the 2009-10 financial year and
beyond.[11]
As previously mentioned, the Ministers of State Act
1952 is not an Appropriation Act but an Act that sets the
maximum amount potentially payable for Ministers’ salaries in
any one financial year. Any future further increase in the maximum
level, where that increase is made via regulations made possible by
this Bill, will be disallowable in the usual manner.
Schedule 1—Amendments to the Ministers
of State Act 1952
Item 1 repeals and substitutes section 5. The
maximum annual sum payable to Ministers as salary is increased to
$3.5 million for the current financial year and future financial
years, or a higher amount if so prescribed in the regulations.
Item 2 inserts new section 7 which introduces a
general regulation-making power to the Ministers of State Act
1952 which will allow regulations to be made on matters
required or permitted by the Act or necessary for carrying out or
giving effect to the Act.
Item 3 enables item 1 to apply to the financial
year that commenced on 1 July 2009 and to later financial
years.
The Bill proposes to allow the setting of the maximum amount
designated for Ministers’ salaries by regulation.[12] Regulations are not subject to the same level of
debate as a Bill is subject in its passage through the Parliament.
However, given the number of amendments to the Act, it will make
the process somewhat less cumbersome. The regulations are still
subject to parliamentary scrutiny in relation to the disallowance
procedures set out in the Legislative Instruments Act
2003.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2784.
Moira Coombs
19 April 2010
Bills Digest Service
Parliamentary Library
Back to top