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

• Parliamentary Salaries and Allowances (Temporary Reduction—COVID-19) Amendment Determination 2020

This temporary reduction determination affects the Parliamentary Salaries and Allowances Determination 2020 (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 is to allow public sector leaders, including members of Parliament (MPs), 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 of certain public office-holders, including MPs (listed in Schedule 4A of the Amendment Act).

The salaries of MPs are set according to criteria in the Remuneration Authority Act 1977 with the underlying premise of de-politicising the setting of their remuneration. The Authority is generally not permitted to make a determination that reduces existing MPs’ pay and their pay must be paid according to the determination that is currently in force. However, section 19A overrides aspects of the legislative regime by permitting a capped reduction of MPs’ salaries 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 MPs, which include taking account of any prevailing adverse economic conditions, fairness to the person whose remuneration is being determined, and fairness to the taxpayer (see sections 18 and 18A of the Remuneration Authority Act 1977). MPs will move to their adjusted salaries as specified in the Schedule of this determination on its commencement date.

On the day after this temporary reduction determination expires, MPs’ salaries will revert to the amounts payable under the original determination.

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

• Parliamentary Salaries and Allowances (Temporary Reduction—COVID-19) Amendment Determination 2020