E. Our People
This section describes the employment and post-employment benefits provided to our people and our relationships with other key people.
Finance provides salary and related benefits to:
· staff employed by current and former members of parliament under the Members of Parliament (Staff) Act 1984 (MOP(S) Act)
· parliamentarians under the Parliamentary Business Resources Act 2017 (PBR Act).
Finance provides post-employment benefits to former prime ministers under the PBR Act.
E1. Employee benefits
Policy and measurement
Liabilities for short-term employee benefits and termination benefits expected within 12 months of the end of the reporting period are measured at their nominal amounts.
Other long-term employee benefits are measured at the present value of the defined benefit obligation at the end of the reporting period.
The liability for employee benefits includes provision for annual leave and long service leave.
The liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including Finance’s superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out at termination.
Separation and redundancy
Provision is made for separation and redundancy benefit payments. Finance recognises a provision for restructuring when it has a detailed formal plan for the restructuring and has informed those employees affected that it will carry out the restructuring.
Finance employees are members of the CSS, PSS, PSS accumulation plan (PSSap) or other superannuation funds held outside the Australian Government.
The CSS and PSS are defined benefit schemes of the Australian Government. The PSSap is a defined contribution scheme. The liability for defined benefits is recognised in Finance’s Administered statements and reported in Note C3.
Finance makes employer contributions to the employees’ defined benefit superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the Australian Government. Finance accounts for the contributions as if they were contributions to defined contribution plans.
Key judgements and estimates
The liability for long service leave has been determined by reference to an actuarial assessment. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Leave liabilities for employees engaged under the MOP(S) Act are calculated with reference to an actuarial assessment. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Separation and redundancy
A provision for severance payments is made for employees engaged under the MOP(S) Act in the event their employment is terminated, other than through resignation. These are measured as the defined benefit obligation adjusted for future salary increases discounted back to present value using yields on government bonds.
Provision is made for certain entitlements for former prime ministers, including staff, office and vehicle costs. The liability is calculated with reference to an actuarial assessment for each former prime minister individually where future recurrent expenditure assumptions are set having regard to historical data adjusted for inflation.
Wages and salaries
Defined contribution plans
Defined benefit plans
Leave and other entitlements
Separation and redundancies
Other employee expenses
Total employee benefit expenses
Separation and redundancies
Total employee provisions
E2. Key management personnel renumeration
Key management personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities of Finance. Finance has determined the KMP to be the Finance Minister, the Assistant Minister for Finance and the members of Finance’s Executive Board which includes the Secretary, Deputy Secretaries and two SES on a rotational basis. KMP remuneration is reported in the table below.
Short-term employee benefits
Other long-term benefits
Total key management personnel remuneration1
Number of key management personnel included in the table above2
1 The above table excludes the remuneration and other benefits of the Finance Minister and the Assistant Minister for Finance whose remuneration and other benefits are set by the Remuneration Tribunal.
2 Represents the total number of persons who held a KMP position during the year, or part thereof (Finance’s Executive Board reduced from eight to seven positions during the year).
E3. Related parties
Finance is an Australian Government controlled entity. Related parties to Finance are KMP, cabinet ministers and other Australian Government entities. KMP remuneration for members of the Executive Board is disclosed in Note E2.
Transactions with related parties
Finance undertakes a number of functions on behalf of the Australian Government, as detailed in the financial statements. In performing these functions, Finance transacts with other Australian Government controlled entities for normal day-to-day business operations provided under normal terms and conditions or on a cost recovery basis. This includes general insurance activities and the collection of rental income. Finance also administers payments for work expenses, allowances and entitlements of parliamentarians (including cabinet ministers). These payments are made in the normal course of Administered operations and are paid in accordance with legislation and appropriate frameworks.
Giving consideration to the relationships with related parties and the transactions entered into during the year, it has been determined that there were no related party transactions to be separately disclosed.