The heavily politicised Administrative Appeals Tribunal (AAT) will be abolished. 

The AAT was set up almost 50 years ago to review the decisions of government, including on matters of taxation, immigration and social security.

But Attorney-General Mark Dreyfus says the former government made so many political appointments to the AAT in its term that it is no longer effective. 

“By appointing 85 former Liberal MPs, failed Liberal candidates, former Liberal staffers and other close Liberal associates, without any merit-based selection process … the former government fatally compromised the AAT,” Mr Dreyfus said this week.

“Australians rightly expect honesty, integrity and accountability in government.”

He says a new review body will be established in 2023, and any current tribunal members will be invited to continue with it.

The government of the day appoints AAT members for terms of up to seven years, though they may also be re-appointed.

Governments of all stripes have made appointments to the tribunal as gifts to political colleagues, but there has been a rise in such political appointments since the Coalition won office in 2013. Analysts have noted several appointments of members to review issues despite having no expertise in the area.

“The AAT's dysfunction has had a very real cost to the tens of thousands of people who rely on the AAT each year to independently review government decisions that have major and sometimes life-changing impacts on their lives,” Mr Dreyfus said.

“Decisions on such as whether an older Australian receives an age pension, whether a veteran is compensated for a service injury or whether a participant in the NDIS receives funding for an essential report.”

Mr Dreyfus says the new body will use a merit-based process for appointing tribunal members.

Justice Susan Kenney has been appointed as the acting president of the AAT to guide its transition to the new system.

The new review body will be given 75 additional staff to help clear backlogs, at a cost of $63.4 million.

Legislation to establish the body is to be introduced next year.