Dear Assistant Treasurer
The main task undertaken by the Tribunal in financial year 2023-24 was a comprehensive review of the remuneration bands for executives employed in public service bodies.
In making its Determination, the Tribunal observed changes in the role of public service executives since its first Determination in May 2020, including the increasing complexity of roles and additional public scrutiny on executives. The Tribunal also commissioned a detailed market analysis that pointed to the reduced competitiveness of the previous remuneration bands, which may affect the ability of the government to attract and retain talented executives.
The Tribunal was mindful of Victoria’s current fiscal position and the views of the Victorian Public Service (VPS) leadership that the previous remuneration bands were broadly appropriate. Weight was also given to the Government’s Wages Policy and the importance of maintaining appropriate relativities between non-executive and executive employees.
Balancing these factors, the Tribunal decided to maintain the existing remuneration band structure for public service body Heads and executives employed in the VPS and set new values for these bands from 1 July 2024. The effective increase in the value of the remuneration bands was between 4.0 and 4.5 per cent, inclusive of changes to statutory superannuation entitlements.
In addition to the Determination of remuneration bands for public service body executives, the Tribunal also made annual adjustments to the value of salaries and work-related parliamentary allowances for Members of Parliament (MPs) and allowances payable to local government Mayors, Deputy Mayors and Councillors.
Each of these adjustments was made during a period of relatively high inflation in Australia and the world. Although all of the matters the Tribunal is required to consider under its legislation were weighed carefully, the Tribunal was mindful of the impact of its decisions on the broader economy. Thus, particular weight was given to the Government’s Wages Policy and current and projected economic conditions and trends, in seeking to find the right balance between wages fairness for the occupational groups within the Tribunal’s jurisdiction and the need for restraint dictated by the prevailing economic circumstances.
In response to a submission received, the Tribunal decided to make changes to the Members of Parliament Guidelines to better support MPs with a disability by updating the eligibility criteria for the commercial transport allowance and the Electorate Office and Communications Budget. I would like to acknowledge the excellent cooperation of the Department of Parliamentary Services and its Secretary, Trish Burrows, in supporting these changes. I would also like to thank the Clerks of the Parliament of Victoria, Bridget Noonan and Robert McDonald, for their assistance during the process.
This financial year was the third full year of the operation of the payment above the band process. As you know, if an employer proposes to pay an executive above the maximum of the relevant remuneration band, the employer must first seek and consider the advice of the Tribunal. The employer is not bound to accept the advice. In providing advice, the Tribunal strives to protect the integrity of the overall remuneration structure and at the same time recognise that there may be circumstances where prevailing market conditions justify a departure from the standard structure.
Over the course of the year, the Tribunal provided advice in response to 40 requests from public sector employers to pay a total of 60 executives above the maximum of the relevant band. This represented approximately two per cent of the total number of executives employed in the Victorian public sector and covered by the Tribunal’s determinations. Thus, it is pleasing to be able to again report that the remuneration bands determined by the Tribunal appear to be appropriate for the vast majority of executives.
During the year the Tribunal surveyed MPs, local government Mayors and public sector employers about their level of satisfaction with the Tribunal’s delivery of its outputs. The overall level of satisfaction was 84 per cent against a target of 80 per cent. In terms of the timeliness of its responses, the Tribunal delivered 98 per cent of its legislated work program within established timeframes against a target of 85 per cent.
Nevertheless, over the coming year, the Tribunal proposes to further improve the information it provides about the reasons for its decisions and to reach out to key stakeholders to explain the Tribunal’s statutory responsibilities and how it goes about its decision-making process. In this respect, it was noted that the lowest satisfaction rate came from the local government sector. The Tribunal proposes to engage more fully with the sector including addressing concerns raised during the annual adjustment consultation process.
I would like to acknowledge Jennifer Acton, whose term as a Member of the Tribunal concluded on 3 June 2024. As an inaugural Member, Jenny guided the establishment of the Tribunal’s systems and processes in its early days providing a foundation for the future built on both integrity and robustness. As a former Presidential Member of the Fair Work Commission, she brought a deep knowledge of wage-setting in Australia to the Tribunal’s decision-making processes over the past five years. The Members wish her well in her future endeavours.
I would also like to welcome Gregory Wilson, who was appointed as a Member of the Tribunal on 23 July 2024. Greg brings vast experience in various senior roles in the VPS, as well as Chair or former Chair of numerous boards in the public sector. I very much look forward to working with him.
Finally, I would like to acknowledge the continuing exemplary performance of the Tribunal’s Secretariat in every aspect of its work in supporting the Tribunal.
On behalf of the Tribunal’s Members, it is my pleasure to submit this report to you.
Yours sincerely
Warren McCann
Chair
Victorian Independent Remuneration Tribunal
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