Commonwealth of Australia Explanatory Memoranda

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GOVERNOR-GENERAL AMENDMENT (SALARY AND SUPERANNUATION) BILL 2008

                                2008




THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                 HOUSE OF REPRESENTATIVES




    GOVERNOR-GENERAL AMENDMENT (SALARY AND
           SUPERANNUATION) BILL 2008




                EXPLANATORY MEMORANDUM




(Circulated by authority of the Prime Minister, the Hon Kevin Rudd MP)
           GOVERNOR-GENERAL AMENDMENT (SALARY AND
                  SUPERANNUATION) BILL 2008

OUTLINE

The Bill proposes an amendment to the Governor-General Act 1974 to set the salary
for the next Governor-General, Her Excellency Ms Quentin Bryce AC, prior to her
swearing-in on 5 September 2008.

Section 3 of the Constitution provides that the salary of the Governor-General shall
not be altered during their continuance in office. The Bill amends the
Governor-General Act 1974 to change the sum payable for the salary of the
Governor-General from $365,000 to $394,000. The proposed salary has been set so
that it moderately exceeds the estimated average salary of the Chief Justice of the
High Court of Australia over the notional five year term of the appointment of the
Governor-General. This is consistent with the convention that has applied since 1974.
The salary figure has been reduced to take account of Ms Bryce's entitlement to a
Commonwealth-funded pension from prior employment. The amendment will take
effect on Royal Assent.

The Bill also removes references in the Governor-General Act 1974 to the
Superannuation Surcharge which was discontinued in 2005.

FINANCIAL IMPACT STATEMENT

There will be a financial cost from increasing the Governor-General's salary. The net
financial impact of the new arrangements is unquantifiable as it is not possible to
estimate the exact taxation liabilities, which will depend on the individual financial
circumstances of the Governor-General and State Governors. However, the overall
impact is expected to be negligible.




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NOTES ON CLAUSES

Clause 1 - Short title
This clause provides for the Act to be cited as the Governor-General Amendment
(Salary and Superannuation) Act 2008.

Clause 2 - Commencement
This clause provides for the Act to commence on Royal Assent.

Clause 3 - Schedule(s)
This clause provides that an Act specified in the Schedule to this Act is amended or
repealed as set out in the Schedule, and that any other item in the Schedule operates
according to its terms.

PART 1 -- SALARY

Item 1
Section 3 of the Governor-General Act 1974 (the Act) provides that the annual sum
payable for the salary of the Governor-General shall be $365,000.

Item 1 omits the annual sum of $365,000 and substitutes a new annual sum of
$394,000.

Item 2

Item 2 is a transitional provision to ensure that the amendments do not apply during
the continuance in office of the person holding office as Governor-General
immediately before the commencement of this Part.

PART 2 -- SUPERANNUATION

Items 3 to 10 repeal the definitions of various terms that relate to the superannuation
surcharge provisions in the Act.

Item 3

Item 3 repeals the definition of assessment in subsection 2(A)(2) of the Act.

Item 4

Item 4 repeals the definition of basic rate in subsection 2(A)(2) of the Act.

Item 5

Repeals the definition of notice of assessment in subsection 2(A)(2) of the Act.




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Item 6

Repeals the definition of scheme in subsection 2(A)(2) of the Act.

Item 7

Repeals the definition of surcharge in subsection 2(A)(2) of the Act.

Item 8

Repeals the definition of surchargeable contributions in subsection 2(A)(2) of the
Act.

Item 9

Repeals the definition of surcharge debt account in subsection 2(A)(2) of the Act.

Item 10

Repeals the definition of surcharge deduction in subsection 2(A)(2) of the Act.

Item 11

Subsection 4(1) of the Act provides that a Governor-General is entitled, when he or
she leaves office, to an allowance calculated in accordance with subsection 4(3) of the
Act. Subsection 4(3) describes the impact of the superannuation surcharge on that
allowance. Item 13 repeals subsections 4(3) and substitutes new paragraph 4(3)(a).
Item 11 therefore omits the reference to subsection 4(3) and substitutes a reference to
the new paragraph.

Item 12

Subsection 4(2) of the Act provides that an allowance is payable to the spouse of a
former Governor-General in accordance with the formula set out in subsection 4(3A).
The formula in subsection 4(3A) takes account of the superannuation surcharge. Item
13 repeals subsections 4(3)(A) and substitutes new paragraph 4(3)(b). Item 12
therefore omits the reference to subsection 4(3A) in subsection 4(2) and substitutes a
reference to the new paragraph.

Item 13

Item 13 repeals subsections 4(3) to (7) and substitutes new paragraphs 4(3)(a) and (b)
and new subsection 4(4). These new provisions set out the method of calculating the
allowance payable to a former Governor-General.

New paragraph 4(3)(a) provides that the rate of allowance payable to a person who
has held office as Governor-General will be 60% of the rate of the salary payable to
the Chief Justice of the High Court of Australia at that time.




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New paragraph 4(3)(b) provides that the rate of the allowance payable to a person
who is a spouse of a deceased person who held office as Governor-General will be
five-eighths, that is 62.5%, of the rate applicable under paragraph 4(3)(a) to a person
who has held office as Governor-General.

New subsection 4(4) provides that the amount of the allowance that would otherwise
be payable to a person under this section in respect of any period is reduced by the
amount of any pension or retiring allowance payable to that person, whether by virtue
of a law or otherwise, in respect of that period out of money provided in whole or in
part by the Commonwealth, a State or a Territory.

Item 14

Section 4A of the Act deals with the situation where a former Governor-General dies
leaving more than one spouse.

Item 14 repeals paragraph 4A(3)(b) of the Act, which provides that the aggregate of
the allowances payable to the former spouses cannot exceed 100% of the allowance
that was payable to the former Governor-General, and replaces it with a new
paragraph. New paragraph 4A(3)(b) has the same effect as the repealed paragraph,
but it recasts the provision and replaces the references to paragraph 4(3), which would
be repealed by Item 13, with a reference to new paragraph 4(3)(a).

Item 15

Item 15 omits the reference in paragraph 4A(3)(c) to subsection 4(3A), which would
be repealed by Item 13, and substitutes a reference to paragraph 4(3)(b), inserted by
Item 14.

Item 16

Repeals section 5A, which specifies that the trustee of the scheme for the purposes of
the Superannuation Contributions Tax (Assessment and Collection) Act 199 to be the
Secretary of the Department of the Prime Minister and Cabinet, or his or her nominee.
With the abolition of the superannuation surcharge, this provision is no longer
necessary.

Item 17

Item 17 ensures that the repeals and amendments made by Part 2 do not apply in
relation to a person who held office as Governor-General at any time after
29 June 2001 and before the commencement of Part 2.




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