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2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
DEFENCE AMENDMENT (FAIR PAY FOR MEMBERS OF THE ADF) BILL 2014
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Jacqui Lambie)
DEFENCE AMENDMENT (FAIR PAY FOR MEMBERS OF THE ADF) BILL 2014
OUTLINE
The purpose of the Defence Amendment (Fair Pay for Members of the ADF) Bill 2014 is to amend
the Defence Act 1903 to protect the wages of the members of the Australian Defence Force (ADF) by
linking them to annual pay increases Federal Parliamentarians or to CPI (whichever is the greater in
the year under review).
The members of the ADF have their pay assessed arbitrarily by the Minister of Defence (the Minister)
under section 58B of the Defence Act 1903. This is a unique situation for workers of Australia. The
Minister's decision cannot be appealed. In addition, all other Australians can be members of unions
and can collectively bargain and negotiate their wages annually. Members of the ADF cannot
collectively negotiate their pay in this wage. They are entirely at the mercy of the Minister of the day.
Historically, Ministerial determinations of defence wages have been reasonably fair and have not
involved increases which effectively create a decrease in their wage by not at least meeting the rising
costs of living (in line with CPI). However a recent decision by the Minister of Defence has led to
circumstances where wages for members of the ADF for a period of three years will fall below the
rising costs of living and has been seen as a cut to pay.
This Bill ensures fairness in the assessment of annual wage increases for members of the Australian
defence force by linking Defence Force pay to the higher of increases in Parliamentary allowance and
CPI
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Defence Amendment (Fair Pay for Members of the ADF) Bill 2014
This Bill is compatible with the human rights and freedoms recognised or declared in the international
instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Bill will amend the Defence Act 1903 to ensure the members of the ADF receive fair and
reasonable pay increases each year. The Bill will ensure arbitrary decisions made by Minister will be
fair and reasonable and not be subjected to any political agenda that may be acting on the Minister
from time to time by ensuring his assessment of annual wage increases for members of the Australian
defence force are linked to at least meet the same amounts of increases in Parliamentary allowance
and CPI (whichever is greater).
Human rights implications
This bill does not engage any of the applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
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NOTES ON CLAUSES
Clause 1: Short Title
1. Provides for the Act to be cited as the Defence Amendment (Fair Pay for Members of the
ADF) Act 2014
Clause 2: Commencement
2. Provides that the Act will commence on the date it receives the Royal Assent.
SCHEDULE 1 -AMENDMENTS
Part 1 - Amendments
3. At the end of Part IIIA of the Defence Act 1903, Item 1 adds a Division 4 with new sections
58Z to 58ZD.
4. 58Z - inserts various definitions to assist with the application of all clauses under the new
Part IIIA, Division 4 of the Defence Act 1903.
5. 58ZA - inserts a new provision specifically defining the meaning of the "CPI index number"
to be applied after royal assent of the Bill.
6. 58ZB -inserts a new provision specifically defining the meaning of the "Parliamentary
allowance amount" to be applied after royal assent of the Bill.
7. 58ZC - is the substantive clause of the Bill inserting a new provision detailing how the
Defence Force pay will be linked to the higher of increases in Parliamentary allowance and
CPI. To save all confusion, nothing in this Bill is designed to link parliamentarian's
entitlements to ADF members. Rather the Bill is designed to link percentage increases in
salary of politicians to percentage increases in ADF members pays. ADF member allowances
over and above their salary (which are referred to as relevant allowances in Division 2 of
Part IIIA--see section 58F) are worked out separately under the Defence Act 1903 and
nothing in this Bill seeks to change how that occurs currently. This Bill only relates to
percentage rise of ADF members wages annually.
8. 58ZD - inserts a Sunset provision ensuring that subsection 58ZC(1) will expire three years
after Royal assent.
PART 2 - TRANSITIONAL PROVISIONS
9. The amendments made by this Schedule apply in relation to Defence Force pay
determinations made on or after the day this Schedule commences.
10. The schedule states that as soon as practicable after the commencement of this Schedule, and
in any case within 28 days after royal assent of the Bill, new Defence Force pay
determinations covering the remuneration of all members must be made in accordance with
the new provisions.
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