The exemption is traditional, based on a belief that you can’t tax the Crown. However even the Queen pays tax in the UK now, so it seems overdue for the Governor-General to do the same. Now this will not mean a pay drop for the next GG, as the Remuneration Authority will take account of the tax status in setting the salary.
A summary of their major recommendations:
- Pass a separate Governor-General Act defining the office, term and appointment, removing them from the Civil List Act.
- Have a permanent legislative authority for the funding of the Governor-General and their office and travel.
- Remove the exemption from income tax on the salary (but the allowance to cover expenses remains tax free).
- Remove Section 7 of the Civil List Act which allows the Minister of Finance to exempt the Governor-General from paying any public or local tax, duty, rate, levy or fee.
- Have an annuity determined by the Remuneration Authority for former GGs, and upon their death half that level paid to a surviving spouse or partner.
- When the Chief Justice (or other Judge) acts as Administrator of the Government they stay on their current salary, rather than the current law where they get paid 50% of their judicial salary and 50% of the GGs salary.
All looks pretty good to me. A small but useful modernisation of our constitutional structure.