Major Overhaul Of Parliamentary Allowances

24 April 2017

The Andrews Labor Government will comprehensively overhaul the allowance system for Members of Parliament by tightening the second residence allowance, improving transparency through online reporting, enforcing repayments and penalties for non-compliance, and removing the ability of MPs to set their own salaries and allowances.

While the previous Liberal Government made minor changes in 2013, they left in place an inadequate, outdated and confusing system which did not go far enough to reform the allowance system.

This new package of reforms will ensure parliamentary standards are in line with community expectations and current professional practices. A significantly enhanced integrity regime will enforce compliance with the new rules and regulations.

To restore public confidence in the Parliament, several immediate changes will be made including:

  • The Second Residence Allowance will only be eligible for MPs who represent regional seats outside the 80km radius of Melbourne. MPs claiming the allowance will be required to provide evidence in support of the claim and will need to be enrolled to vote at their principal place of residence. It will also be renamed the ‘Parliamentary sitting accommodation allowance’ to clarify the purpose of the allowance.
  • The Commercial Vehicle Travel Allowance is currently available to MPs in large regional electorates for a range of private transport options for travel on electorate business – this will now be restricted to air travel only.
  • The Electorate Office and Communications Budget includes a $10,000 allocation for interstate and overseas travel for official business. It will now no longer be possible to rollover the travel component to the next financial year and spouse travel will no longer be funded.

In addition to these immediate changes, the Labor Government will establish an independent Remuneration Tribunal to set salaries and allowances for Members of Parliament, public service executive officers and other office holders.

The tribunal will review existing salary, allowances and motor vehicle allowances and will also set the value of the Electorate Office and Communications Budget, the consolidated travel allowances, the second residence allowance, the expense allowance and the electorate allowance.

The Tribunal’s decisions will be effective from beginning of the next Parliament and ensures MPs will never again have a say in determining their own salaries and allowances.

Parliamentary travel allowances will be consolidated from four to a single allowance for MPs undertaking electorate or parliamentary business and reimbursement will be for costs incurred. Documentary evidence will be required and additional scrutiny will be provided for claims beyond 68 nights per year in Melbourne, reflecting parliamentary sitting schedules.

For the first time, all allowances claimed will be published on the Parliament’s website every quarter and relevant sections of the Members Guide will be published to ensure full transparency.

The Parliament currently has no ability to recover payments claimed in breach of the rules. This is unacceptable so the Government will introduce legislation to allow for recovery and for a penalty of 25 per cent for non-compliance. This is consistent with the recent approach taken by the Commonwealth Parliament.

The Clerk of the Parliament and the Department of Parliamentary Services will also be given a broader monitoring and compliance role and a statement of principles on the appropriate use of allowances will be introduced.

A new Parliamentary Integrity Advisor (PIA) will be established to advise and educate MPs on the use of parliamentary allowances and their obligations to disclose various matters in the Register of Interests.

The PIA will give confidential advice on specific matters and prepare an annual report to Parliament. They will be appointed for a term of Parliament and can only be removed on reasonable grounds by the resolution agreed to by both Houses of Parliament.

These changes are in line with the recommendations put forward by the Audit Committee of Parliament.

Quotes attributable to Premier Daniel Andrews

“The current system is clearly inadequate and needs a complete overhaul. These allowances need to be cleaned up and that’s exactly what we’ll do.”

“Establishing a Remuneration Tribunal means MPs will never again be able to determine their own salaries and allowances – and that’s as it should be.”

Quotes attributable to Special Minister Gavin Jennings

“Members of Parliament should only be claiming allowances for legitimate, work-related expenses – just like every other Victorian – and these reforms will make sure that’s the case.”

“We’re serious about enforcing the rules so if MPs wrongly claim these allowances they will be required to pay them back and under these changes, they’ll also be paying a 25 per cent fine.”

Reviewed 19 August 2020

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