Review of operations

2. Review of operations

In 2023‑24, the Tribunal undertook work in relation to the remuneration arrangements for the following occupational groups:

• MPs
• executives employed in Victorian Public Service (VPS) bodies and prescribed public entities (PEs)
• Mayors, Deputy Mayors and Councillors (Council Members) in local governments in Victoria.

2.1 Members of Parliament

The Tribunal is responsible for inquiring into and setting the value of salaries and work‑related parliamentary allowances for MPs (VIRTIPS Act, ss. 6(1)(a)-(c)). It may also make guidelines with respect to the use of some work-related parliamentary allowances and the EO&C Budget (VIRTIPS Act, s. 36(1)).

The Determination in effect at 30 June 2024 was the Members of Parliament (Victoria) Determination No. 01/2023 (2023 MP Determination) – the Tribunal’s second comprehensive Determination of MP salaries and allowances. The guidelines in force at 30 June 2024 were the Members of Parliament (Victoria) Guidelines No. 01/2023 (2023 MP Guidelines).

2024 annual adjustment Determination

The Tribunal is required to make a Determination providing for an annual adjustment to the values set in the current MP Determination (VIRTIPS Act, s. 18).

On 1 July 2024, the Tribunal made the Members of Parliament (Victoria) Annual Adjustment Determination 2024 (2024 MP annual adjustment Determination). This Determination adjusted the values of MP salaries, work-related parliamentary allowances and the EO&C Budget with effect from 1 July 2024.

In making the Determination, the Tribunal considered current and projected economic conditions, the financial position and fiscal strategy of the State, the Government’s wages policy and stakeholder submissions (VIRTIPS Act, s. 24(2)).

The Tribunal gave weight to the current Wages Policy and the Enterprise Bargaining Framework (Wages Policy) and noted available data at the time of making the Determination that suggested a mixed economic outlook. The Tribunal also took into account remuneration adjustments for MPs in other jurisdictions and the Fair Work Commission’s Annual Wage Review 2023-24.

The Tribunal’s Determination increased the basic salary for MPs and the additional salary and expense allowance provided to specified parliamentary office holders by 3.5 per cent. From 1 July 2024, the basic salary payable to all MPs is $205,798 per annum, with additional salaries payable to specified parliamentary office holders ranging from $8,232 to $229,636 per annum. The expense allowance payable to eligible specified parliamentary office holders ranges from $3,683 to $62,597 per annum.

The Tribunal adjusted the values of work-related parliamentary allowances in line with the relevant price movements in the Victorian economy. These adjustment rates were 3.4 per cent in line with the ‘transport’ group of the Melbourne Consumer Price Index (CPI) for domestic transport-related allowances, and 3.6 per cent in line with Melbourne CPI for other allowances (Table 2.1).

Table 2.1: Values of work-related parliamentary allowances for MPs

The EO&C Budget formula was adjusted to reflect movements in relevant costs, including postage, and the effective rate per voter increased by 6.1 per cent. The Tribunal continued to link the travel allowance to rates set by the Commonwealth Remuneration Tribunal.

Through the consultation process for the Determination, submitters proposed changes to the 2023 MP Guidelines for the Tribunal’s consideration. The Tribunal decided to make specific changes to better support MPs with a disability by updating the eligibility criteria for the commercial transport allowance and the EO&C Budget. The Members of Parliament (Victoria) Guidelines No. 01/2024 were made by the Tribunal on 24 July 2024 and were effective from 1 August 2024.

Further information about the 2024 MP annual adjustment Determination, including a detailed Statement of Reasons accompanying the Determination, and the current MP Guidelines is available on the Tribunal’s website.

2.2 Public sector executives

The Tribunal is responsible for inquiring into and determining the remuneration bands for executives employed in VPS bodies and PEs (VIRTIPS Act, ss. 6(1)(d) and 6(1)(g)).

Under the VIRTIPS Act, the Tribunal also has the functions of:

• issuing guidelines with respect to the placement of executives within the remuneration bands (ss. 6(1)(e), 6(1)(h) and 36(6))
• providing advice to employers proposing to pay an executive above the relevant remuneration band (ss. 6(1)(i) and and 37(1))
• providing advice to the Minister about the remuneration of executives (ss. 6(1)(l) and 37(3)).

In 2023-24, the Tribunal’s work in relation to executives comprised:

• commencing a comprehensive Determination to reset the values of the remuneration bands for executives employed in VPS bodies
• reviewing the guidelines to support VPS employers in setting executive remuneration within the remuneration bands set by the Tribunal
• initial work on a comprehensive Determination to reset the values of the remuneration bands for executives employed in PEs
• preliminary work on advice to the Assistant Treasurer on options for updating the Executive Motor Vehicle Scheme to provide specific guidance on the provision of zero emissions vehicles
• advice to public sector employers proposing to pay an executive above the relevant remuneration band.

2024 VPS comprehensive Determination

On 2 July 2024, the Tribunal made its second comprehensive Determination for executives employed in public service bodies – the Remuneration bands for executives employed in public service bodies (Victoria) Determination No. 01/2024 (2024 VPS Determination).

This Determination provided an opportunity to reset the values of the remuneration bands to reflect current circumstances, and the Tribunal accordingly set new remuneration bands from 1 July 2024 for public service body Heads and the Senior Executive Service (SES) in the VPS.

The Tribunal considered current and projected economic conditions, the financial position and fiscal strategy of the State of Victoria, the Government’s wages policy and stakeholder submissions. In addition, the Tribunal was required to comprehensively review the roles of executives employed in public service bodies and the remuneration provided to those executives (VIRTIPS Act, s. 21).

To support the Tribunal’s consideration, it published a notice of its decision to make the Determination in December 2023 and invited submissions from affected parties. The Tribunal received submissions from the Commission for Gender Equality in the Public Sector, the Victorian Public Sector Commission and the Victorian Secretaries Board. The Tribunal also sent an online questionnaire to 1,665 executives employed in public service bodies and received 628 completed questionnaires (a response rate of 38 per cent).

In making the 2024 VPS Determination, the Tribunal observed changes in the role of public service executives since its first Determination, 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 VPS leadership that the previous remuneration bands were broadly appropriate. The Tribunal also gave weight to the current Wages Policy and the importance of maintaining appropriate relativities between non-executive and executive employees following in‑principle agreement on a new VPS enterprise bargaining agreement.

Balancing these factors, the Tribunal decided to maintain the existing remuneration band structure for public service body Heads and executives employed in the SES and set new values for these bands from 1 July 2024 (Table 2.2). 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.

Table 2.2: Values of the remuneration bands for executives employed in public service bodies, 1 July 2024.

_{Note: (a) The remuneration bands are expressed as a total remuneration package (TRP), comprising base salary, non-monetary benefits (and the cost of these to employers) and employer superannuation contributions. All values are for executives employed on a 1.0 full-time equivalent basis and apply pro-rata to executives employed on a part time basis.}

The comprehensive Determination, including a detailed Statement of Reasons, is available on the Tribunal’s website.

VPS executive remuneration guidelines

The Tribunal is able to make guidelines regarding the placement of executives employed in public service bodies within the remuneration bands set by a Determination (VIRTIPS Act, s. 36(6)(b)).

In the context of making the 2024 VPS Determination, the Tribunal reviewed and updated its original guidelines and published the Victorian Public Service Executive Remuneration Guidelines (VPS Guidelines) on 2 July 2024.

The updates:

• give greater emphasis to government policies on diversity and inclusion in setting executive remuneration
• encourage VPS employers to regularly review executive remuneration arrangements, including to consider changes to the functions and responsibilities of executive roles and remuneration relativities.

The Tribunal also clarified that the VPS Guidelines do not require employers to remunerate an executive at the bottom of the relevant remuneration band.

The VPS Guidelines are available on the Tribunal’s website.

Executives employed in prescribed public entities

The Tribunal is also responsible for setting the remuneration bands for executives employed in prescribed PEs.

The Determination currently in effect is the Remuneration bands for executives employed in prescribed public entities (Victoria) Determination No. 01/2020 (2020 PE Determination), as amended by annual adjustment Determinations made in 2021, 2022 and 2023.

The VIRTIPS Act (s. 19(2)) requires the Tribunal to make a new comprehensive Determination at the end of each subsequent four-year period following the previous comprehensive Determination being made. The 2020 PE Determination was made on 17 December 2020, which means the earliest that the next comprehensive Determination can be made is 18 December 2024.

The Tribunal intends to publish its PE comprehensive Determination by the end of 2024.

Advice on Executive Motor Vehicle Scheme

The Minister may request the Tribunal to provide advice about remuneration and funding in relation to any specified occupational group and remuneration in relation to prescribed public sector bodies (VIRTIPS Act, s. 37(3)).

On 14 June 2024, the Assistant Treasurer requested the Tribunal’s advice on options for updating the Executive Motor Vehicle Scheme to provide specific guidance on the provision of zero emissions vehicles. The Tribunal’s advice is to be provided within six months of the date of the request from the Assistant Treasurer.

Payment above the band advice

The Tribunal is required to provide advice to public sector employers proposing to pay an executive above the maximum of the relevant remuneration band set by a Determination (VIRTIPS Act, s. 37(1)). This advice is published on the Tribunal’s website where appropriate to support greater transparency and accountability in relation to executive remuneration.

In 2023-24, the Tribunal provided advice in response to 40 requests from employers to pay a total of 60 executives above the maximum of the relevant remuneration band. This compares to 44 requests for advice in respect of 76 executives in 2022-23. Table 2.3 below provides a breakdown of payment above the band requests in 2023-24.

Table 2.3: Requests for payment above the band advice by employer type, 2023-24

The majority of requests for advice related to executives employed in the major transport infrastructure and finance sectors (Figure 2.1).

Figure 2.1: Requests for payment above the band advice by sector, 2023-24

2.3 Mayors, Deputy Mayors and Councillors

The Tribunal is responsible for setting the value of the allowances payable to Mayors, Deputy Mayors and Councillors (Council Members) in all 79 local governments in Victoria (VIRTIPS Act, s. 23A).

The Determination in effect at 30 June 2024 was the Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Determination No. 01/2022.

The Determination set a base allowance for each Council Member, the value of which varies according to the role (Mayor, Deputy Mayor or Councillor) and the allowance category to which the Council has been assigned. The Determination also provided for a remote area travel allowance (RATA), which compensates eligible Council Members for the time taken to travel to Council meetings or authorised functions.

2024 annual adjustment Determination

The Tribunal is required to make a Determination providing for an annual adjustment to the values set in the current local government Determination. The Tribunal has previously made annual adjustment Determinations in December 2022 and June 2023.

On 1 July 2024, the Tribunal made the Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Annual Adjustment Determination 2024 (2024 LG annual adjustment Determination). This Determination adjusted the values of the base allowance and the RATA by 3.5 per cent with effect from 1 July 2024.

The Tribunal is required to consider a range of economic and financial factors, as well as submissions received, when making a Determination (VIRTIPS Act, s. 24(2)). The Tribunal also took into account recent adjustments to allowances for Council Members in other jurisdictions, the Victorian Government’s rate cap for 2024-25 and the financial position of local Councils presented in the most recent audit of Councils by the Victorian Auditor-General’s Office.

The current values of the base allowance for Council Members are set out in Table 2.4. Further increases to allowances for Mayors and Deputy Mayors are scheduled to be phased in from 18 December 2024.

Table 2.4: Value of the base allowance for Mayors, Deputy Mayors and Councillors, by council allowance category, 1 July 2024 until 17 December 2024.

The current value of the RATA is $47.50 per day, up to a maximum of $5,937.50 per annum.

Further information about the 2024 LG annual adjustment Determination, including a detailed Statement of Reasons accompanying the Determination, is available on the Tribunal’s website.

2.4 State Budget performance measures

The Victorian Budget 2023-24 specifies one quality and one timeliness performance measure for the Tribunal [Reference: Department of Treasury and Finance (2023), Budget Paper No. 3 – Service Delivery, p. 304].

The quality measure relates to the satisfaction of key stakeholders — including MPs, public sector employers and Council Members — with the Tribunal’s processes regarding Determinations, reviews and advice.

To measure stakeholder satisfaction, a questionnaire was sent to approximately 400 stakeholders, including MPs and the Clerks of the Parliament of Victoria, public sector employers and local government Mayors. The questionnaire asked respondents to rate their overall satisfaction with the Tribunal’s delivery of outputs [Note: The question asked was ‘Considering consultation methods, consideration of views and issues, communication of outcomes, and timeliness, how satisfied were you overall with the Tribunal's delivery of determinations, reviews and advice in 2023-24?’].

The Tribunal recorded an overall level of stakeholder satisfaction of 84 per cent against a target of 80 per cent, based on 75 responses to the questionnaire.

The timeliness measure relates to delivery of the Tribunal’s legislated work program within established timeframes. In 2023-24, the Tribunal’s legislated work program comprised:

• making comprehensive and annual adjustment Determinations consistent with timeframes set out in the VIRTIPS Act [Note: The Tribunal undertook substantial work on the 2024 MP annual adjustment Determination, 2024 VPS Determination and 2024 LG annual adjustment Determination in the 2023-24 financial year, but as these Determinations were made after 30 June 2024, they were not counted for the timeliness performance measure.]
• responding to requests for advice submitted by VPS and PE employers proposing to pay an executive above the relevant remuneration band — the Tribunal aims to provide advice within 15 business days of a complete request being received
• providing advice as requested by the Minister — the advice must be provided within a reasonable time after receiving the request
• provision of the Tribunal’s 2022-23 annual report by 31 October 2023.

In 2023-24, the Tribunal delivered 98 per cent of its legislated work program within established timeframes, against a target of 85 per cent.