Prime Minister Malcolm Turnbull said Ley judged resignation to be the appropriate course of action in the interests of the government. But Ley has maintained her claims were within the rules.
In response to the scandal, Turnbull has announced major reforms to the parliamentary entitlements system. The changes are modelled on the UK’s system of vetting MPs’ expenses.
What are the proposed reforms?
The main reform Turnbull announced is the introduction of an independent agency, modelled on the UK’s Independent Parliamentary Standards Authority, for parliamentary entitlements. The Department of Finance administers Australia’s current system.
The independent authority will be staffed by a member experienced in auditing, a member experienced in remuneration matters, the president of the Remuneration Tribunal, a former judge and a former MP. This is a very strong board. It will have significant independence from the government.
MPs and senators will be able to get advice and rulings from the independent agency if they are unsure about a claim.
This means the administration of MPs’ entitlements will now be out of the hands of MPs themselves, who may be interested in a generous interpretation of claimable expenses. MPs’ expenses will now be overseen in a more robust and independent way.
The second reform is to have monthly disclosure of parliamentary expenses, rather than every six months. More frequent reporting will certainly improve the system’s transparency.
The government has also committed to implementing the recommendations of the independent review of parliamentary entitlements that followed then-Speaker Bronwyn Bishop’s 2015 “Choppergate” scandal.
As such, entitlement claims will be limited to those made for the dominant purpose of conducting parliamentary business. This excludes political party administration and management, and activities for the dominant purpose of party fundraising, pursuing commercial interests or obtaining personal benefit.
The legal enforcement of the system will be increased. Where MPs misuse entitlements, legislation will oblige them to repay the money – plus a 25% penalty.
The terminology of “entitlements” will be changed to “work expenses”. This is because MPs are given resources to perform their duties in exchange for acting in the public interest.
What happened in the UK?
In 2009, the UK had its own MP expenses scandal. UK MPs made inappropriate claims for a second residence allowance, alongside outrageous claims for moat cleaning, a ride-on lawn mower, jellied eels and a duck house.
The scandal led to the first resignation of a Speaker in the House of Commons for more than 300 years, and prompted the resignation of a dozen government ministers.
Following public outrage, legislation was introduced to set up the Independent Parliamentary Standards Authority. It was a strong reaction to a situation that the then-British prime minister, Gordon Brown, called the “biggest parliamentary scandal for two centuries”.
The Independent Parliamentary Standards Authority determines what MPs can claim, and administers and audits those claims. It is independent of government and has significant resources.
Will the reforms fix the system?
Turnbull’s reforms will significantly revamp the entitlements system. They introduce for the first time an independent agency to vet MP expenses. If the agency does its job well, it will ensure MPs do not abuse the system.
The reforms will also simplify the system, enhance transparency, tighten the rules, and introduce enforceable penalties.
When the system comes into effect, Australians will hopefully see fewer politicians flying around in helicopters and private jets while attending to their private affairs on public funds. The reforms are a great first step toward rebuilding public trust in our elected representatives.
Authors: Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT University