The purpose of this Circular is to advise that the Public Sector Management Office and the Public Service Association of NSW have reached agreement on increases in meal, travelling and related allowances. The increases are effective from the first pay period commencing on or after 13 September 2000 and apply to the allowances contained in Tables 1 and 2, Part B-Monetary Rates to the Crown Employees (Public Service Conditions of Employment 1997) Award.

The increases shown in the attached schedule reflect the increases in the Consumer Price Index since the last review in 1997 and, where appropriate, the adjustment determined by the Australian Taxation Office (ATO) as compensation for the introduction of the Goods and Services Tax. The schedule also includes current rates of those allowances normally adjusted in line with the appropriate percentage increases in salaries.

As you will note, considerable changes have been made to the allowances for one-day journeys, overnight travel and overtime meal rates. These new rates are consistent with similar rates adopted by the ATO for the 2000/2001 income year in the ATO Taxation Ruling 2000/13.

Adoption of ATO rates for overnight travel and overtime meal allowances in particular eliminates taxation implications for employees and should result in some administrative savings for Departments and agencies.

It might be noted that the ATO regards meal allowances for one-day journeys as assessable income for employees and requires these amounts to be taxed and shown on employees' group certificates.

Any enquiries from Departments concerning this Circular should be directed to their client contact officer in the Public Sector Management Office.

C. Gellatly
Director-General