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2002
THE PARLIAMENT OF THE COMMONWEALTH
OF AUSTRALIA
HOUSE OF REPRESENTATIVES
EXPLANATORY MEMORANDUM
(Circulated
by authority of the Special Minister of State,
Senator the Honourable Eric
Abetz)
The purpose of the Bill is to establish a uniform set of arrangements for
all Life Gold Pass holders, their spouses and their widows or widowers. The Bill
sets limits on the number of return trips within Australia that may be
undertaken each year by former Prime Ministers, former Senators or Members,
spouses of former Prime Ministers, spouses of former Senators or Members,
spouses of sitting Senators or Members and widows or widowers.
On 27
September 2001 the Prime Minister announced that the unlimited access to travel
for Life Gold Pass holders (who qualified prior to 1994) was beyond community
standards and that the Government would legislate to limit the use of the
entitlement for all entitlees.
Prior to 1976 the Life Gold Pass was
provided under Executive Decision and from 1 June 1976 the Life Gold Pass has
been provided under a Determination of the Remuneration Tribunal. Eligibility is
established on the basis of length of service in the Parliament, with a
weighting system to recognise Prime Ministerial and Ministerial service. Since 1
January 1994 the Tribunal has imposed a limit of 25 return trips per annum on
use of the Pass.
The Bill sets limits on the number of return trips
within Australia that may be undertaken each year by former Prime Ministers (40
return trips), former Senators or Members (25 return trips), spouses of former
Prime Ministers (40 return trips 10 of which may be unaccompanied), spouses of
former Senators or Members (25 return trips), spouses of sitting Senators or
Members (25 return trips to Canberra) and widows or widowers.
The
arrangements for widows and widowers have been tailored to recognise the
different benefits that have been provided in the past. The widows and widowers
of members who retired prior to 1 June 1976 have has access to unlimited travel
and in the future they and the widows of former Prime Ministers will be limited
to 10 trips per annum for 5 years and 5 trips per annum thereafter. All other
widows will be limited to 10 trips for the first year and 5 trips the second
year following the death of the member and then the entitlement will
cease.
The Bill contains a forfeiture provision linked to the forfeiture of
superannuation benefits following conviction of a “corruption
offence” as defined in the Crimes (Superannuation Benefits) Act
1989. The forfeiture provisions are intended to apply both to Life Gold Pass
holders and former Senators and Members who qualify for severance travel
benefits.
The Bill contains a range of provisions aimed at clarifying and
enhancing the integrity of a uniform set of arrangements. These include clear
statements of:
• the type of travel that may be
undertaken;
• a definition of a return trip;
• how to treat
stopovers; and
• what constitutes a commercial purpose.
The Bill
also provides mechanisms for compensation in the event that a Court ruled that
limiting trips involved an appropriation of property. It also provides for the
recovery of expenses if the entitlement is misused.
The Bill has a
special appropriation provision – up until now the costs of some Life Gold
Pass travel has been met from special appropriation and some from annual
appropriation.
The Bill also includes a clause dealing with the
Remuneration Tribunal. The Tribunal will continue to determine the qualifying
period for the Life Gold Pass. Any other benefits provided by determinations of
the Remuneration Tribunal are not affected by the Bill with the exception of the
cessation of severance travel for a person who is convicted of a corruption
offence.
Since the overall effect of the Bill is to limit the entitlement it is
expected there will be a reduction in overall expenditure.
PART 1 – INTRODUCTION
Clause 1 is a formal provision specifying the short title of the
Bill
The disqualification provisions (Part 6) of the Bill are to commence on
Royal Assent. Other parts will commence 28 days after receiving Royal Assent for
administration reasons – chiefly to allow time to notify Life Gold Pass
holders (and their spouses) and widows and widowers about the new arrangements.
Several terms are defined in clause 4:
‘Australia does not include an external Territory.’
The Life Gold Pass has never applied to travel to the external
Territories.
‘commercial purpose’.
This would
include attendance at meetings of a government appointed board or advisory body
for which a sitting fee is paid.
‘convicted ‘ and
‘corruption offence’ have the same meanings as in the
Crimes (Superannuation Benefits) Act 1989 because the disqualification
provision in this Bill will be tied to the process outlined for those convicted
of a corruption offence under the Crimes (Superannuation Benefits) Act
1989.
‘domestic return trip’.
(a)
‘wholly within Australia’. This covers travel that commences at a
given point and finishes at the same point. It may include travel to multiple
destinations within Australia so long as a stop-over of more than 24 hours is
not involved.
‘former member’ see clause 5 that
expands and clarifies ‘retires’.
‘scheduled
transport service’ is taken to mean any regular timetabled
transport whether metropolitan, intrastate or interstate. This includes
metropolitan buses, coach services, metropolitan trains, intrastate and
interstate train services, trams planes and ferries. Ferry service has the
ordinary meaning that is, transport across a body of water such as a river, lake
or strait. It therefore includes ferry services that operate to islands off the
mainland for example, the Spirit of Tasmania (between Devonport and Port
Melbourne) and Kangaroo Island Sealink (between Cape Jervis and Kangaroo
Island).
A return trip may consist of travel by more than one carrier.
However special rules apply when a stop-over of more than 24 hours is involved
(see below).
‘severance travel’ is an entitlement
provided by Remuneration Tribunal determinations to members who retire from the
Parliament but are not eligible for the Life Gold Pass. The entitlement provides
for travel on a sliding scale for periods from 6 months to 5 years depending on
the number of Parliaments in which a former Senator or Member has
served.
‘spouse’ is the de jure spouse. This
accords with arrangements that have applied with the Remuneration Tribunal
Determination. The legal effect of the definition is that it overides earlier
legislation such as s.26 of the Sex Discrimination Act
1984.
‘stop-over’ is an interruption in the
course of a journey and may occur on the forward or return legs. It is important
to note that this Bill makes a distinction between a stopover of more than 24
hours (which is taken as a break in the journey) and less than 24 hours (which
is taken as not breaking the journey). A break in the journey of more than 24
hours means that the preceding travel counts as one leg of a return journey
(that is, 0.5 of a return trip).
‘retires from the
Parliament’
‘Retires from the Parliament’ is
used in the broadest sense to cover all circumstances by which a person ceases
to be a member. Retirement is effective from the day following the day on which
the person ceases to be eligible for Parliamentary allowances.
Subitem (3) of
the clause is to ensure that all Parliamentary retirees, both existing and
future are covered in the Bill.
In the event that a member dies in office and has qualified for a Life
Gold Pass it is taken that s/he has retired from the Parliament with the Life
Gold Pass. This provision is to ensure all widow/ers of those qualified to hold
a Life Gold Pass have access to the benefits provided to them under the Bill.
Further explanation of benefits to widow/ers follows in the relevant
clauses.
Travel under the Life Gold Pass entitlement is specific to domestic
travel. The definition in this clause makes it plain that the entire trip is
within Australia and this includes any stop-overs. The trip is specifically a
return trip so must end at the same place it began.
Clause 8 reiterates that the trip referred to in this Bill is a return
trip and
stop-overs, regardless of their length, do not affect the fact
that it is a
return trip.
Clause 9: When return trip is in a
year etc.
As the trips in the Bill are allocated on an annual basis
the possible situation of a trip beginning in one financial year and ending in
the next needs to be addressed. This clause makes it clear that a trip is
counted against the year in which it was begun and not the year in which it
ended.
In the case of widow/ers however, whose entitlements are not on a
financial year basis the year concerned dates either from the date of the
commencement of the Act (in the case of existing widow/ers) or from the date of
the death of the member in the case of future widow/ers. Clause 9 (3) is
concerned with widow/ers who have an ongoing entitlement and (4) covers the
others with a finite benefit. In either case where a trip may have begun in one
12 month period and finished in another it is counted against the entitlement
for the year in which it was begun. Any trips undertaken by those widow/ers in
(3) with a finite entitlement must be completed before the end of the second
year.
Item 1: Former Prime Ministers who are retired and qualify for a Life
Gold Pass are entitled to a maximum of 40 return trips per year.
Item 2: The spouse of a former Prime Minister may accompany or join the former
Prime Minister on 40 domestic return trips per year. For up to 10 of those trips
it is not necessary that the spouse accompany or join the former Prime Minister.
The travel for the spouse as for the Life Gold Pass holder must be for
non-commercial purposes. However it is open to the spouse to accompany or join
the Life Gold Pass holder when the Pass holder has travelled but not used the
Life Gold Pass.
Item 3: The entitlement for widows of former Prime
Ministers who qualified for a Life Gold Pass is 10 domestic return trips per
annum for 5 years and 5 domestic trips per annum thereafter from the
commencement of the Act. For future widows the entitlement will commence on the
death of the Life Gold Pass holder.
Item 1: Former members who qualify for a Life Gold Pass are entitled to
a maximum of 25 return trips per year.
Item 2: The spouse of
such a former member is also entitled to 25 return trips per year so long as the
purpose of the trip is for him/her to accompany or join the former member.
Item 5: The widow/ers in this group have had, under very longstanding
arrangements, unlimited travel. The Bill will limit the number of trips per
annum but will not withdraw the benefit for these persons.
Item 3 &
4: refer to all other widow/ers who will be subject to the new arrangements
(that is, 10 trips in the first year and 5 trips in the second year). Any person
who becomes a widow in the 12 months prior to the commencement of the Act will
be entitled to the full 2 year benefit from the date of commencement.
Sitting members who meet the qualifying period for a Life Gold Pass do
not receive the Pass until they retire. However the spouses are entitled to
travel to Canberra on a specified number of occasions to accompany or join the
member.
Item 1: The spouse of a qualified Prime Minister is entitled to
a maximum of 40 return trips to Canberra per year so long as the trip is for
him/her to accompany or join the Prime Minister.
Item 2: The spouse of
a former Prime Minister who remains in the Parliament is entitled to a maximum
of 40 return trips to Canberra per year so long as the trip is for him/her to
accompany or join the member.
Item 3: The spouse of a qualified member
can have a maximum of 25
return trips to Canberra per year so long as the
trip is for him/her to accompany or join the member.
Life Gold Pass
entitlements for sitting members do not affect any other entitlements they may
have under the Parliamentary Entitlements Act 1990 or those provided by
determinations of the Remuneration Tribunal.
There are situations where a pro-rated adjustment to Life Gold Pass
entitlements is necessary. The pro-rata scheme for this Bill parallels that in
the Parliamentary Entitlements Act 1990 where the entitlement is worked
out according to a specific formula. Clause 14 outlines the specific
applications for pro-rating adjustments under this Bill.
Clause 14:
Pro-rata adjustments
There are many situations where a member
retires during the course of a financial year rather than at the end of it.
Under these circumstances the Life Gold Pass entitlements are pro-rated for the
proportion of the year that is the period of retirement. There are corresponding
pro-rata adjustments for the spouse of a former member or for someone who
becomes the spouse of a former member.
During the course of a year a
person may become the spouse of a sitting member who is qualified for a Life
Gold Pass. The benefits that flow on to them as a spouse will be
pro-rated.
Clause 14 (1) has a table to enable the calculation of
1. the number of trips to which the person is entitled; and
2. the
commencement of and duration of the remaining period to the end of the financial
year.
An example using the pro-rating formula follows. A member is entitled
to 25 trips for the financial year (see Part 3 item 1). If he/she retires on 27
September 2004 then the calculation of his/her entitlement for the remaining
period is as follows.
The calculation is:
Number of domestic x
number of days in the remaining period
return trips specified
365
in the item
25 x (3+31+30+31+31+28+31+30+31+30) =
25 x 276
365
365
= 18.9 with rounding = 19 trips
This Part provides a mechanism for withdrawing the benefit of travel in
retirement at taxpayers’ expense from both Life Gold Pass holders and
Severance Travel entitlees when they have been convicted of a corruption offence
and a superannuation order withdrawing their superannuation benfits has been
made. The existing arrangement where there is no such mechanism for forfeiture
of travel benefits is anomalous.
Clause 16: When this Part applies
– superannuation order made in relation
to a person
convicted of a corruption offence
If a person is convicted of a
corruption offence that has the consequence of a superannuation order made under
the Crimes (Superannuation Benefits) Act 1989 then the Life Gold Pass or
severance travel benefit will be removed as they are benefits provided by the
Commonwealth.
When a superannuation order is made by a court under the
Crimes (Superannuation Benefits) Act 1989 as a consequence of a person
being convicted of a corruption offence, the Director of Public Prosecutions
will notify the Minister so that action under clause 17 will take
place.
This Part affects any superannuation order that was made on 11
June 2002 or after. The 11 June 2002 was the date of the acting Prime
Minister’s announcement. If the order is made before the commencement of
the Act this Part has effect immediately after commencement (that is, on Royal
Assent). Therefore a person subject to a superannuation order that is issued on
or after 11 June 2002 will not receive a travel benefit after commencement of
the Act. Recovery provisions will not apply for travel undertaken prior to Royal
Assent
There are a number of consequences of the order being issued:
(1) the
person is no longer a holder of a Life Gold Pass and the Life Gold Pass
medallion must be returned to the Minister within 14 days;
(2) if a
superannuation order is issued in respect of a sitting member who had met the
qualifying period for the Life Gold Pass then the person is taken to no longer
satisfy the requirement for issue of a Life Gold Pass on retirement.
(3) the
person is incapable of qualifying for a Life Gold Pass if he/she has not
qualified; and
(4) the person is not entitled to severance
travel.
Clause 18: Revocation of order
Upon revocation of
the order the Director of Public Prosecutions notifies
the Minister and the
benefit is reinstated. For example, if the person was previously a Life Gold
Pass holder he/she resumes being a Life Gold Pass holder and the medallion is
returned.
This provision is a mechanism to compensate a Life Gold Pass holder who
is disqualified but subsequently has the Pass restored. The Bill provides that a
former member or spouse may be compensated by the provision of additional travel
entitlements. This is left with the responsible Minister to decide. It is
envisaged that any compensatory travel would be calculated using the pro-rata
formula based on the length of time the superannuation order applied.
There are different conditions for various groups in relation to the
travel benefit and this flows on to the stop-over provision. For example,
spouses can have different number of trips, some may be unaccompanied, others
must accompany or join and some are limited to travelling to Canberra. For this
reason there needs to be a statement of purpose for each group in relation to
stop-overs and these are covered in the following clauses.
This Part
recognises that a Life Gold Pass holder (and spouse) may wish to undertake
travel that is not simply travelling from home to a given destination and home
again but may involve multiple destinations.
If a stop-over is up to 24
hours it is taken to be en route and does not affect the count (that is, 1
return trip). However a stop-over of more than 24 hours is treated as a visit
and the preceding leg is counted as 0.5 of a return trip.
A regulation
making power has been provided to recognise that there may be exceptional
circumstances when the 24 hour rule may be unreasonable. Examples could include
suspension of transport services or unexpected serious accident or
illness.
The general rule for stop-overs is when there is a break in the journey
of more than 24 hours the preceding travel counts as one leg of a return journey
(that is, 0.5 of a return trip). For example:
Travel A → B
→ C → A
(stop-over)
If the
stop-over at B is less than 24 hours then the travel counts as 1 return trip
A-C. If the stop-over at B is more than 24 hours then the travel counts as 3
legs = 1.5 return trips (3 x 0.5 = 1.5).
The general rule applies to
former Prime Ministers, former members, sitting members who hold a Life Gold
pass and widow/ers.
The spouse of a former Prime Minister has 40 domestic return trips per
annum, 10 of which may be unaccompanied. This condition is reflected in the
stop-over clause.
The spouse of a former member is limited to 25 trips with the purpose of
accompanying or joining the former member and this is reflected in the
clause.
The spouse of a sitting member who is a Life Gold Pass holder is
entitled to 25 return trips to Canberra with the purpose of accompanying or
joining the member and again this is reflected in this clause.
The class of travel for Life Gold Pass holders, their spouses and
widow/ers under Determinations of the Remuneration Tribunal has been at the same
class of travel as a sitting member. This Bill provides a continuation of this
arrangement.
Trips allocated under Life Gold Pass entitlements are not transferable
from one year to the next neither can they be drawn on from the next year to be
used in the current year. This clause does not affect clause 9 that is concerned
with the straddling of a trip across 2 years.
It is government policy for persons to use frequent flyer points that
they have accrued by undertaking travel at the Commonwealth’s expense to
offset the cost of further Commonwealth paid travel.
This clause
provides the mechanism for treating travel under the Life Gold Pass holder or
spouse or widow/er who chooses to use frequent flyer points in accordance with
government policy – in such cases the travel is a count against this
entitlement.
The purpose of this clause is to clearly state the role of the
Remuneration Tribunal in relation to the Life Gold Pass entitlement. In the past
the Remuneration Tribunal has had total carriage of this entitlement and it is
important to outline the distinction between what the Bill provides and the
responsibility of the Tribunal.
In the case of inconsistency between the
two the Bill takes precedence over a determination the Remuneration Tribunal
(subitem (1)).
The Remuneration Tribunal determines the qualifying
period(s) for the Life Gold Pass.
Subitem (4) makes it clear that any
travel that straddles the change of jurisdiction from the Remuneration Tribunal
to the Bill has no effect on the entitlement. The exception to this is a person
who is convicted of a corruption offence.
The Remuneration Tribunal has
determined that severance travel is provided to retired members who have not
qualified for a Life Gold Pass. Subitem (5) makes it clear that the Bill has no
effect on severance travel except to cease it for a person who is convicted of a
corruption offence.
The clause provides that all Life Gold pass travel will be funded under
special appropriation. In the past because of the different authorities for
providing the benefit most of the funding was from special appropriation but
some was from annual appropriation.
Clause 32 provides a constitutional safety net to guarantee that any
provisions made in the Bill which result in the acquisition of property meet
constitutional compensation requirements. The Office of General Counsel has
advised that in its view a successful action under
para 51(xxxi) of the
Constitution is unlikely. However as there is some risk it is desirable the Bill
contain a provision to handle such an eventuality if it arose.
This is to put beyond doubt the liability of a person who travels at
Commonwealth expense without entitlement to pay the Commonwealth the expenses
incurred. The clause covers the entitlement provided by this Act and by the
Remuneration Tribunal in respect of Life Gold Pass travel prior to commencement
of the Act and severance travel both before and after the commencement of the
Act.
There has been advice from the Office of General Counsel that they
do not consider this clause amounts to the imposition of taxation as it merely
provides for the recovery of equal amounts of the expenses incurred by the
Commonwealth by the travel of an unauthorised person.
Please see Schedule 1 for explanation.
This provision sets out a general regulation making power for the Bill.
1 Definition
‘transitional
period’
As the Bill commences at some time through the year
2002-2003 and the Bill is based on the financial year there is a need to address
the time from commencement to 30 June 2003. This is referred to as the
transitional period. The entitlements in the transitional period are based on a
pro-rata formula.
Transitional provisions affect two groups of
entitlees in different ways. The group that had uncapped travel prior to the
commencement of the Bill are entitled to a pro-rated number of trips during the
transitional period. For the other group who were already subject to a limited
number of trips, the Bill provides that there will be no change in the total
number of trips for the year 2002-2003.
As Schedule 1 will be effective
for a short period of time, that is, until 30 June 2003 it is possible to amend
the Act at some later date to remove the Schedule.
If a trip was begun but not finished in the transitional period it is
counted against the number of allocated trips in the transitional period and not
in the year it was finished.
The principles underlying the arrangements during the transitional period
are:
1. When a person has been entitled to an unlimited benefit the
benefit available for the remainder of the year will be a pro-rated amount of
the new limited annual rate.
That is,
40 or x no. of days
remaining in the financial year
25 365
1. When a person has been
entitled to limited number of trips (25) during the year the transitional
provisions will mean that the limit applies for the whole year – initially
under Remuneration Tribunal Determination and then under the Act from the date
of commencement.
2. If a person becomes eligible for an entitlement
under the Act during the transitional period then the number of trips will be
calculated on a pro-rated basis.
It is worth noting that the transitional
arrangements do not apply to widows or widowers whose entitlements are not based
on a financial year cycle.
3 Transitional period
Item 1:
In relation to former Prime Ministers the maximum number of trips in the
transitional period is based on the formula outlined.
Item 2: For the
spouse of a former Prime Minister the maximum number of trips is also based on
the formula given except that during the transitional period the 10
unaccompanied trips are not subject to the pro-rata formula. That is, the wife
of a former Prime Minister who, up until now, has been able to travel
unaccompanied on an unlimited number of occasions will be limited to no more
than 10 unaccompanied trips out of the pro-rated number generated by the
transitional formula.
4 Transitional period
Pro-rated entitlements apply during
the transitional period.
Item 1: In relation to former members the
maximum number of trips in the transitional period is based on the given
formula. For example, the member retires on 12 April 2003 then
N = 25 x
(18 + 31 + 30) = 25 x 79 = 5.4 with rounding = 5
trips
365 365
Item 2:
For the spouse of a former member the maximum number of trips is also based on
the formula.
5 Adjustment – total number of domestic
return trips in the financial year
beginning on 1 July
2002
In the majority of cases this clause means that a person who has
an entitlement to 25 trips as at 1 July 2002 will, at the commencement of the
Act, have an entitlement of 25 trips minus the number of trips already
taken.
If a member retires from Parliament after 1 July 2002 or a person
becomes a spouse of a former member after 1 July 2002 then the entitlement for
the remainder of the year is calculated based on the pro-rata formula. Then on
commencement of the Act, the number of trips already undertaken will be
subtracted from the pro-rated entitlement for 2002-2003.
An example of
how the formula works follows.
If a member resigned on 1 September 2002
then their pro-rated travel entitlement for the rest of the year would be 25
minus 6 = 19 trips.
If the former member undertook 3 trips between 1
September 2002 and 15 October 2002 (for argument’s sake the commencement
date) then:
The residual number is 19 – 3 = 16 trips
This clause deals with the travel entitlement for spouses of sitting
members. Up to the present the Remuneration Tribunal Determination has placed no
limit on the number of trips a spouse of a sitting member, who has met the
qualifying period for a Life Gold Pass, may take (see para2.25(b) of
Determination 26 of 1998).
The new limits will come into effect 28 days
from commencement of the Act and the maximum number of trips that may be
undertaken between commencement and the end of the year will be:
40 or
x number of days in the transitional period
25
365
As with a normal financial year pro-rata entitlements apply if a person
retires, becomes a spouse of a former member or member during the transitional
period.
The pro-rata adjustments are based on the number of trips
allocated to each group for the transitional period. For example, if the
transitional period began on 1 January 2003 then for a former member there are a
total of 13 trips that can be taken between 1 January 2003 and 30 June 2003. If
a person retired on 31 March 2003 then the 13 trips for the transitional period
are pro-rated for the remaining time, that is, the time between 1 April 2003 and
30 June 2003 with a net result of 6 trips.
The formula used for the pro-rating during the transitional period varies
from the pro-rating formula for a normal year but produces mathematically the
same result.
Trips allocated under Life Gold Pass entitlements are not transferable
from one year to the next neither can they be drawn on from the next year to be
used in the current year. This clause does not affect clause 9 (of the Bill
proper) that is concerned with the straddling of a trip across 2 years.