Note: The following explanatory memorandum should be read in conjunction with the explanatory memorandum(s) appended to the:

• Local Government Members (Temporary Reduction—COVID-19) Amendment Determination (No 2) 2020

• Local Government Members (Temporary Reduction—COVID-19) Amendment Determination 2020

This temporary reduction determination affects the Local Government Members (2019/20) Determination 2019 (the original determination).

This determination commences on 9 July 2020 and expires on 6 January 2021.

On 15 May 2020, the Remuneration Authority (COVID-19 Measures) Amendment Act 2020 (the Amendment Act) was passed. The purpose of the amendment Act, as outlined in its explanatory note, is to allow public sector leaders, including elected members of local authorities (mayors, deputy mayors, chairpersons, deputy chairpersons, and members), to show leadership in the public sector during the COVID-19 outbreak and to show solidarity with those in the private sector who are losing their jobs or facing significant pay reductions. Accordingly, the Amendment Act inserted section 19A into the Remuneration Authority Act 1977 to permit the Authority to reduce the remuneration for certain public office holders, including local government elected members (listed in Schedule 4A of the Amendment Act).

The remuneration of local government elected members is set according to the Remuneration Authority Act 1977 and the Local Government Act 2002 with the underlying premise to depoliticise the setting of their remuneration. The Authority is generally not permitted to make a determination that reduces existing elected members’ pay and their remuneration must be paid according to the determination that is presently in force. However, section 19A overrides aspects of the legislative regime by permitting a capped reduction of elected members’ remuneration by up to 20% for a period of up to 6 months.

In making this temporary reduction determination, the Authority has applied the existing criteria that it must take into account when setting the remuneration of elected members, which include taking account of any prevailing adverse economic conditions, fairness to the person whose remuneration is being determined, and fairness to ratepayers (see clause 7 of Schedule 7 of the Local Government Act 2002 and section 18A of the Remuneration Authority Act 1977). The adjusted remuneration payable to elected members as shown in the Schedule of this determination will apply on and from the day on which this determination comes into force until it expires.

In making its decisions on any deductions in elected members’ pay, the Authority took account of the fact that many elected members are on relatively low rates of remuneration and decided that cuts would apply only to remuneration above $100,000 per annum. The Authority is aware that elected members are easily identified in their communities, highly exposed to public opinion, and expected to show pro-active leadership. At the beginning of the Covid-19 crisis, many elected members publicly pledged to donate a proportion of their remuneration to local charities—some for several months. The Authority therefore invited those potentially impacted by its decision to provide confidential information to the Authority with details of any such donations they wished to have taken into account. Some took advantage of this and the deduction was adjusted accordingly. For a variety of reasons, others indicated that they did not wish to provide information. The Authority’s decisions were made on the basis of the information supplied.

On the day after this temporary reduction determination expires, the elected members’ remuneration will revert to the amount payable under the original determination.

Note: The preceding explanatory memorandum should be read in conjunction with the explanatory memorandum(s) appended to the:

• Local Government Members (Temporary Reduction—COVID-19) Amendment Determination (No 2) 2020

• Local Government Members (Temporary Reduction—COVID-19) Amendment Determination 2020