Explanatory memorandum
This memorandum is not part of the determination, but is intended to indicate its general effect.
This determination, which is deemed to have come into force on 1 April 2010, sets new rates for the Governor-General's salary, currently $191,645. From 1 April 2010, the salary is payable at the rate of $200,622 a year. From 1 April 2011, the salary is payable at the rate of $210,309 a year.
The Civil List Act 1979 provides for the Governor-General’s salary, determined from time to time by the Remuneration Authority, to be set on the basis that it is exempt from income tax.
In this determination, which sets the Governor-General’s salary on the basis that it is exempt from income tax, the Remuneration Authority has used the same approach as was used in 2009. This approach is to establish a notional gross salary and then to convert that salary into a tax-free salary by applying the relevant personal income tax rates and threshold levels. The effect is that the Governor-General’s remuneration is adjusted to place it on the same basis as that of any salaried person who benefits from adjustments in taxation rates and thresholds.
For the year commencing 1 April 2010, the previous year’s notional gross salary was increased by 1.25% and then converted to a tax-free salary using the personal tax rates and thresholds applying for the year 1 April 2010 to 31 March 2011. This results in a tax-free salary of $200,622. The increase of 1.25% takes into account increases in remuneration for other positions with broadly similar levels of responsibility. The increase in the tax-free salary was greater than 1.25% due to personal income tax rates being reduced in that year.
For the year commencing 1 April 2011, the notional gross salary from 1 April 2010 was increased by 1.5% and then converted to a tax-free salary using the personal tax rates and thresholds applying for the year 1 April 2011 to 31 March 2012. This results in a tax-free salary of $210,309. The increase of 1.5% takes into account increases in remuneration for other positions with broadly similar levels of responsibility. The increase in the tax-free salary was greater than 1.5% due to personal income tax rates being reduced again for this year.
This determination expires on the day after the incumbent Governor-General leaves office.
The Governor-General Act 2010, under which future Governors-General are to be appointed, provides for the Governor-General's salary to be determined on the basis that it is not exempt from income tax.