A Bill for an Act to amend the Public Governance, Performance and Accountability Act 2013, and for related purposes
The Parliament of Australia enacts:
1 Short title
This Act is the Public Governance, Performance and Accountability Amendment (Executive Remuneration) Act 2017.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
| Commencement information |
| Column 1 | Column 2 | Column 3 |
| Provisions | Commencement | Date/Details |
| 1. The whole of this Act | 1 July 2018. | 1 July 2018 |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Schedules
Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Amendments
Public Governance, Performance and Accountability Act 2013
1 Section 6
Omit:
• waivers, set‑offs and act of grace payments by the Commonwealth.
substitute:
• waivers, set‑offs and act of grace payments by the Commonwealth; and
• remuneration of senior executives of Commonwealth entities.
2 Section 6
Omit:
It also has some requirements that apply to the directors of wholly‑owned Commonwealth companies.
substitute:
It also has some requirements that apply in relation to wholly‑owned Commonwealth companies.
3 Section 8
Insert:
annualised average weekly earnings: see subsection 72A(2).
remuneration cap: see subsection 72A(1).
senior executive:
(a) of a Commonwealth entity: see subsection 72B(2); and
(b) of a wholly‑owned Commonwealth company: see subsection 93A(2).
4 At the end of section 50
Add:
Division 10 has requirements relating to remuneration of senior executives of Commonwealth entities.
5 At the end of Part 2‑4
Add:
Division 10—Executive remuneration
72A Definitions
(1) The remuneration cap for a senior executive of a Commonwealth entity or a Commonwealth company for a period starting in a reporting period for the entity or company is the amount worked out using the formula:
where:
AAWE means the annualised average weekly earnings for the reporting period for the entity or company.
(2) The annualised average weekly earnings for a reporting period for a Commonwealth entity or a Commonwealth company is the amount worked out using the formula:
where:
AWE (short for average weekly earnings) means the amount published by the Australian Statistician in a document titled “Average Weekly Earnings” under the headings “Average Weekly Earnings, Australia—Original—Full‑time adult average weekly total earnings” (or, if any of those change, in a replacement document or under replacement headings) for the most recent index reference period before the start of the reporting period.
72B Remuneration of senior executives
(1) Despite any other Act, a Commonwealth entity must not pay a senior executive of a Commonwealth entity remuneration for a period (the pay period) that would result in the total remuneration of the senior executive for the pay period from all Commonwealth entities exceeding the remuneration cap for the pay period.
(2) A person is a senior executive of a Commonwealth entity if the person is the holder of, or is appointed to:
(a) a principal executive office (within the meaning of the Remuneration Tribunal Act 1973) of that entity; or
(b) the office of a Secretary of a Department of State or a Parliamentary Department.
(3) However, to avoid doubt, the Governor‑General or a judge is not a senior executive of a Commonwealth entity.
Note: The High Court and the Future Fund Board of Guardians are not Commonwealth entities—see subsection 10(2) of the Act.
72C Reporting on remuneration
The annual report prepared by the accountable authority of a Commonwealth entity and given to the entity’s responsible Minister under section 46 for a reporting period for the entity must include a statement setting out, for each senior executive of the entity:
(a) the total remuneration for the reporting period; and
(b) the ratio of the total remuneration for the reporting period to the annualised average weekly earnings for the reporting period; and
(c) the ratio of the total weekly remuneration at the end of the reporting period to the national minimum weekly wage set by a national minimum wage order (within the meaning of the Fair Work Act 2009) that is in operation at the end of the reporting period.
6 At the end of section 88
Add “, and requirements in relation to remuneration of senior executives of wholly‑owned Commonwealth companies”.
7 At the end of Division 3 of Part 3‑1
Add:
93A Remuneration of senior executives
(1) Despite any other Act, a wholly‑owned Commonwealth company must not pay a senior executive of a wholly‑owned Commonwealth company remuneration for a period (the pay period) that would result in the total remuneration of the senior executive for the pay period from all wholly‑owned Commonwealth companies exceeding the remuneration cap for the pay period.
(2) A person is a senior executive of a wholly‑owned Commonwealth company if the person is:
(a) a director or secretary of the company; or
(b) a person (other than a director or secretary of the company, a Minister, or an APS employee engaged as an employee for the purposes of a Commonwealth entity or Commonwealth company other than the company) who:
(i) makes, or participates in making, decisions that affect the whole, or a substantial part, of the operations of the company; or
(ii) has the capacity to affect significantly the company’s financial standing.
93B Reporting on remuneration
When the directors of a wholly‑owned Commonwealth company give the responsible Minister the reports required by section 97 for a reporting period for the company, the directors must give the responsible Minister a statement setting out, for each senior executive of the company:
(a) the total remuneration for the reporting period; and
(b) the ratio of the total remuneration for the reporting period to the annualised average weekly earnings for the reporting period; and
(c) the ratio of the total weekly remuneration at the end of the reporting period to the national minimum weekly wage set by a national minimum wage order (within the meaning of the Fair Work Act 2009) that is in operation at the end of the reporting period.
8 Application
(1) In this item:
amended PGPA Act means the Public Governance, Performance and Accountability Act 2013 as amended by this Act.
commencement time means the time at which this Schedule commences.
(2) If an arrangement in relation to remuneration between a Commonwealth entity and a senior executive of a Commonwealth entity is in force immediately before the commencement time, section 72B of the amended PGPA Act does not apply in relation to the senior executive until the arrangement expires or is terminated.
(3) If an arrangement in relation to remuneration between a wholly‑owned Commonwealth company and a senior executive of a wholly‑owned Commonwealth company is in force immediately before the commencement time, section 93A of the amended PGPA Act does not apply in relation to the senior executive until the arrangement expires or is terminated.
(4) If:
(a) immediately before the commencement time, a senior executive of a Commonwealth entity has a statutory entitlement to remuneration from a Commonwealth entity; and
(b) after the commencement time, a Commonwealth entity would, apart from this subitem, contravene section 72B of the amended PGPA Act by paying the remuneration in accordance with the entitlement;
that section does not apply in relation to the senior executive until the senior executive ceases to have the entitlement.
(5) If:
(a) immediately before the commencement time, a senior executive of a wholly‑owned Commonwealth company has a statutory entitlement to remuneration from a wholly‑owned Commonwealth company; and
(b) after the commencement time, a wholly‑owned Commonwealth company would, apart from this subitem, contravene section 93A of the amended PGPA Act by paying the remuneration in accordance with the entitlement;
that section does not apply in relation to the senior executive until the senior executive ceases to have the entitlement.