Allowances for Mayors, Deputy Mayors and Councillors – annual adjustment

Read the submissions received below. Submissions do not necessarily reflect the views of the Tribunal and assertions made in them have not been fact-checked.

Submissions have been published in order of receipt either in full, or in a de-identified or redacted form, as requested.

For an accessible version of these submissions, please email enquiries@remunerationtribunal.vic.gov.au

In accordance with section 24(1) of the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards Act 2019 (Vic) (VIRTIPS Act), the Tribunal hereby publishes notice of its intention to make a Determination adjusting the values of the allowances payable to Mayors, Deputy Mayors and Councillors.

The Tribunal invites submissions from interested persons or bodies in relation to the proposed Determination.

Details about the proposed Determination and how to make a submission are set out below.

What will the Determination cover?

The Determination will provide for an annual adjustment to the current values of the base allowance payable to every elected Council member in Victoria. The value of the base allowance varies depending on the role of the Council member, with Mayors and Deputy Mayors entitled to a higher allowance, and the allowance category to which their Council has been assigned.

The current values of the base allowance (effective from 18 December 2023) are set out in the table below.

Further information on the Council allowance categories, including a list of the Councils in each category, is available in the Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Determination No. 01/2022(opens in a new window). The Tribunal does not propose to make any changes to allowance categories in this Determination.

The Tribunal has provided for scheduled increases to base allowances for Mayors and Deputy Mayors, with the next increase taking effect on 18 December 2024. If any adjustments to base allowances are made by the Tribunal in the proposed Determination, these will apply in addition to the scheduled increases for Mayors and Deputy Mayors.

The Tribunal has also provided for a remote area travel allowance, currently equal to $45.90 per day (subject to eligibility requirements and an annual cap of $5,738). The Tribunal will also consider an annual adjustment to this value.

How will the Tribunal make its Determination?

The Tribunal is required to consider the following factors in making a Determination:

• current and projected economic conditions and trends
• the financial position and fiscal strategy of the State of Victoria
• any statement or policy issued by the Government in respect of its wages policy (or equivalent) and the remuneration and allowances of any specified occupational group as defined in the VIRTIPS Act
• submissions received in relation to the Determination.

Current and projected economic conditions and trends

The Tribunal’s understanding of current and projected economic conditions and trends will be informed by the Victorian and federal budgets (both expected in May 2024), statements by the Reserve Bank of Australia(opens in a new window), the outcome of the Fair Work Commission’s Annual Wage Review 2023-24(opens in a new window) (expected in June 2024) and other relevant information.

The Tribunal will also have regard to the latest data on key economic indicators published by the Australian Bureau of Statistics (ABS), including the following releases:

• Australian National Accounts: National Income, Expenditure and Product(opens in a new window)
• Average Weekly Earnings(opens in a new window)
• Consumer Price Index (CPI)(opens in a new window)
• Labour Force(opens in a new window)
• Wage Price Index (WPI)(opens in a new window).

The table below summarises key ABS data about the Victorian and Australian economies at the time of issuing this notice (March 2024).

Financial position and fiscal strategy of the State of Victoria

The Tribunal’s understanding of the financial position and fiscal strategy of the State of Victoria will be informed by the Victorian Budget (expected in May 2024) and the latest Auditor‑General’s Report on the Annual Financial Report of the State of Victoria(opens in a new window) (November 2023).

At the time of issuing this notice, the Tribunal notes the following with respect to Victoria’s financial position and fiscal strategy:

• according to the Victorian Government’s 2023-24 Mid-Year Financial Report(opens in a new window) (March 2024):
  • the general government sector recorded an operating deficit of $4.2 billion for the first half of 2023-24
  • net debt for the general government sector was $126.8 billion at 31 December 2023
• the 2023/24 Budget Update(opens in a new window) (December 2023) forecast operating cash surpluses through to 2026‑27, with an expected return to an operating surplus in 2025-26.

Relevant Victorian Government remuneration policies

The Tribunal is required to take into account the Victorian Government’s Wages Policy and the Enterprise Bargaining Framework(opens in a new window), which applies to enterprise agreements entered into by departments and agencies in the Victorian public sector.

The current policy provides that employees’ wages and conditions will be allowed to grow at a rate of 3% per annum over the life of an agreement. In addition to annual wage increases, a separate lump sum, cash payment will be available, equivalent to an additional 0.5% of overall agreement costs.

Additional changes to allowances and other conditions – but not ‘general wages’ – may be permitted where the Victorian Government agrees that these will address key agency or wider public sector priorities and where the costs are funded through appropriate cash offsets or an approved funding strategy.

How can I make a submission?

The Tribunal invites submissions from any person or body, including any affected person or class of affected persons, in relation to the proposed Determination.

Consultation questions

You may wish to consider the following questions in your submission:

• What adjustment to the values of allowances should the Tribunal consider, if any?
• Which economic and financial indicators should the Tribunal consider in adjusting the values of allowances?
• What other matters should the Tribunal consider when making the Determination, if any, in addition to those listed in section 24(2) of the VIRTIPS Act?

How to make a submission

Written submissions (and requests for assistance to make a submission) should be emailed to the Tribunal Secretariat at enquiries@remunerationtribunal.vic.gov.au.

Written submissions must be received by the Tribunal by 5pm on Wednesday 24 April 2024.

The Tribunal may also accept requests from interested parties to make submissions after 24 April. Please contact the Tribunal Secretariat at enquiries@remunerationtribunal.vic.gov.au to request to make a late submission.

Those wishing to make an oral submission must advise the Tribunal Secretariat via email by 5pm on Friday 12 April 2024.

Publication and use of submissions

To promote transparency, submissions will be published on the Tribunal’s website in full or in summary form as appropriate. If the submitter seeks confidentiality or the submission contains information that is identified as commercially sensitive, the Tribunal will work with the submitter to publish the submission in a form which protects the confidentiality or commercial sensitivity.

Submissions that contain offensive or defamatory material, or that are outside the scope of the Determination, will not be published.

The Tribunal may use information provided in submissions in its Determination.

The Tribunal may receive a request under the Freedom of Information Act 1982 (Vic)(opens in a new window). Any such request will be determined in accordance with that Act, which contains provisions designed to protect personal information and information given in confidence. Further information can be found on the website of the Office of the Victorian Information Commissioner(opens in a new window).

When will the Tribunal make its Determination?

The Tribunal proposes to make the 2024 Annual Adjustment Determination in June 2024, ahead of a proposed effective date of 1 July 2024.

Any adjustments to the base allowance made by the Tribunal would also apply in addition to the scheduled increase to that allowance for Mayors and Deputy Mayors on 18 December 2024.

In accordance with section 24(1) of the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards Act 2019 (Vic) (VIRTIPS Act), the Tribunal hereby publishes notice of its intention to make a Determination.

Details about the proposed Determination and how to make a submission are set out below.

What will the Determination cover?

The Determination will provide for an annual adjustment to the values of the allowances set in the Tribunal’s Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Determination No. 1/2022 (Comprehensive Determination).

The Comprehensive Determination set a base allowance for every Council member in Victoria, the value of which varies depending on their role and the allowance category to which their Council has been assigned. The current values are available on the Tribunal’s Allowances for Mayors, Deputy Mayors and Councillors webpage.

The Comprehensive Determination provided for scheduled increases to base allowances until 2025 for Mayors and Deputy Mayors, and until 2023 for Councillors. The next increase is scheduled for 18 December 2023. If any adjustments to base allowances are made by the Tribunal in the proposed Determination, these will apply in addition to the scheduled increases under the Comprehensive Determination.

The Comprehensive Determination also provided for a remote area travel allowance, currently equal to $45 per day (subject to eligibility requirements and an annual cap of $5,625). The Tribunal will also consider an annual adjustment to this value.

The Tribunal does not propose to make any changes to allowance categories in this Determination.

When will the Determination take effect?

The Tribunal proposes to make the 2023 Annual Adjustment Determination take effect on 1 July 2023, in line with the annual adjustment Determinations for executives employed in public service bodies and prescribed public entities.

The Tribunal is seeking feedback on whether this would be appropriate, or if the Determination should take effect on another date (see ‘Submissions’).

Submissions

The Tribunal invites submissions from any person or body, including any affected person or class of affected persons, in relation to the proposed Determination.

You may wish to consider the following questions in your submission:

• What adjustment to the values of allowances should the Tribunal consider, if any?
• Which economic and financial indicators should the Tribunal consider in adjusting the values of allowances?
• What other matters should the Tribunal consider when making the Determination, if any, in addition to those listed in the VIRTIPS Act?
• Should the 2023 Annual Adjustment Determination take effect on 1 July 2023, or on some other date?

Written submissions (and requests for assistance to make a submission) should be emailed to the Tribunal Secretariat at enquiries@remunerationtribunal.vic.gov.au.

Written submissions must be received by the Tribunal by 5pm on Friday 28 April 2023.

The Tribunal may also accept requests from interested parties to make submissions after 28 April. Please contact the Tribunal Secretariat at enquiries@remunerationtribunal.vic.gov.au to request to make a late submission.

Those wishing to make an oral submission must advise the Tribunal Secretariat via email by 5pm on Friday 14 April 2023.

Publication of submissions

The Tribunal may use information provided in submissions in its Determination.

All submissions will be published in full or in summary form on the Tribunal’s website, unless the person making the submission seeks confidentiality or the submission contains information that is identified as commercially sensitive. In this instance, the submission will be published in a form which protects confidentiality or commercially sensitive information.

The Tribunal may remove identifying information from submissions if published.

Submissions that contain offensive or defamatory comments, or that are outside the scope of the Determination, will not be published.

The Tribunal may receive a request under the Freedom of Information Act 1982 (Vic). Any such request will be determined in accordance with the Freedom of Information Act 1982 (Vic) which contains provisions designed to protect personal information and information given in confidence. Further information can be found at the Office of the Victorian Information Commissioner.

How will the Tribunal make its Determination?

In making its Determination, section 24(2) of the VIRTIPS Act requires the Tribunal to consider:

• current and projected economic conditions and trends
• the financial position and fiscal strategy of the State of Victoria
• any statement or policy issued by the Government in respect of its wages policy (or equivalent) and the remuneration and allowances of any specified occupational group as defined in the VIRTIPS Act
• submissions received in relation to the Determination.

Current and projected economic conditions and trends

The Tribunal’s understanding of current and projected economic conditions and trends will be informed by the Victorian and federal budgets (both expected in May 2023), statements by the Reserve Bank of Australia, the outcome of the Fair Work Commission’s Annual Wage Review 2022‑23 (expected in mid-June 2023) and other relevant information.

The Tribunal will also have regard to the latest data on key economic indicators published by the Australian Bureau of Statistics, including the following releases:

• Australian National Accounts: National Income, Expenditure and Product
• Average Weekly Earnings
• Consumer Price Index (CPI)
• Labour Force
• Wage Price Index (WPI).

At the time of issuing this notice, the Tribunal notes the following with respect to the Australian and Victorian economies:

• the annual change in Australia’s real Gross Domestic Product to the December quarter 2022 was 2.7%
• Victoria’s unemployment rate (in trend terms) in February 2023 was 3.8%
• Victoria’s labour force participation rate (in trend terms) in February 2023 was 66.9%
• the annual change in the Victorian WPI to the December quarter 2022 was 3.4%
• the annual change in the Melbourne CPI to the December 2022 quarter was 8%
• the annual change in the trimmed mean (a measure of underlying inflation in Australia) to the December 2022 quarter was 6.9%.

Financial position and fiscal strategy of the State of Victoria

The Tribunal’s understanding of the financial position and fiscal strategy of the State of Victoria will be informed by the Victorian Budget (expected in May 2023) and the latest Auditor‑General’s Report on the Annual Financial Report of the State of Victoria (October 2022).

At the time of issuing this notice, the Tribunal notes the following with respect to Victoria’s financial position and fiscal strategy:

• according to Victoria’s Mid-Year Financial Report (March 2023):
  • the general government sector recorded an operating deficit of $4.2 billion for the first half of 2022-23
  • net debt for the general government sector was $104.2 billion at 31 December 2022
• the 2022 Victorian Pre-Election Budget Update (November 2022) forecast a return to an operating cash surplus in 2022‑23, followed by an expected return to an operating surplus in 2025-26.

Relevant Victorian Government remuneration policies

The Tribunal is required to take into account the Victorian Government Wages Policy, which applies to enterprise agreements entered into by departments and agencies in the Victorian public sector.

The current Wages Policy caps increases in wages and conditions at 1.5% per annum over the life of an agreement. Additional changes to allowances and other conditions are capped at 0.5% per annum of the salary base, provided that the changes address key operational or strategic priorities for the agency, and/or one or more of the Public Sector Priorities.

In accordance with section 24(1) of the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards Act 2019 (Vic) (VIRTIPS Act), the Tribunal hereby publishes notice of its intention to make a Determination.

What will the Determination cover?

The Tribunal is required to make a Determination providing for an annual adjustment to the values set in its  Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Determination No. 01/2022 (Comprehensive Determination), which was made on 7 March 2022.

The Comprehensive Determination set a base allowance for every Council member in Victoria, the value of which varies depending on the role (Mayor, Deputy Mayor or Councillor) and the allowance category to which a Council has been assigned (four in total). Compared to existing equivalent allowances, the value of the base allowance decided by the Tribunal was 20% higher for Mayors and 10% higher for Councillors. A new allowance for Deputy Mayors was also set at 50% of the base allowance for Mayors.

Increases to base allowances are being phased in over five years for Mayors (with the base allowance for Deputy Mayors increasing at the same time so as to remain equal to 50% of the base allowance for Mayors), and over three years for Councillors. The first increase was backdated to 18 December 2021, with the next one scheduled for 18 December 2022.

The allowance values set by the Comprehensive Determination are set out in the tables below.

If any adjustments to base allowances are made by the Tribunal in its annual adjustment Determination, these will apply in addition to the phased increases set in the Comprehensive Determination.

The Comprehensive Determination also provided for a remote area travel allowance equal to $44 per day (subject to eligibility requirements and an annual cap of $5,500). The Tribunal will also consider an annual adjustment to this value.

What is not in scope of the Determination?

The proposed Determination will not cover the reimbursement of expenses incurred by Council members in the performance of their role or the provision of facilities and resources, which are determined by Councils in accordance with the Local Government Act 2020 (Vic).

In addition, the Determination will not apply to any administrators or Municipal Monitors appointed to a Council, whose remuneration is set by the Minister for Local Government.

How to make a submission

The Tribunal invites submissions from any person or body, including any affected person or class of affected persons, in relation to the proposed Determination.

You may wish to consider the following questions in your submission:

• What, if any, adjustment to the values of allowances should the Tribunal consider?
• Which economic and financial indices should the Tribunal consider when adjusting the values of allowances?
• Are there other matters, in addition to those listed in the VIRTIPS Act, that the Tribunal should consider when making the Determination?
• When should any annual adjustment come into effect?

Submissions should be emailed to the Tribunal Secretariat at localgovernment@remunerationtribunal.vic.gov.au by 5pm on Friday 11 November 2022.

If you require assistance with making a submission, please contact the Tribunal Secretariat at localgovernment@remunerationtribunal.vic.gov.au.

Publication of submissions

The Tribunal may use information provided in submissions in its Determination.

All submissions will be published in full or in summary form on the Tribunal’s website, unless the person making the submission seeks confidentiality or the submission contains information that is identified as commercially sensitive. In this instance, the submission will be published in a form which protects confidentiality or commercially sensitive information.

The Tribunal may remove identifying information from submissions if published.

Submissions that contain offensive or defamatory comments, or that are outside the scope of the Determination, will not be published.

The Tribunal may receive a request under the Freedom of Information Act 1982 (Vic). Any such request will be determined in accordance with the Freedom of Information Act 1982 (Vic) which contains provisions designed to protect personal information and information given in confidence. Further information can be found at the Office of the Victorian Information Commissioner.

How will the Tribunal make its Determination?

In making a Determination, section 24(2) of the VIRTIPS Act provides that the Tribunal must consider:

• any statement or policy of the Victorian Government which is in force with respect to its wages policy and the remuneration and allowances of any specified occupational group
• the financial position and fiscal strategy of the State of Victoria
• current and projected economic conditions and trends
• submissions received about the proposed Determination.

Below is the Tribunal’s understanding of the first three factors listed above.

Current and projected economic conditions and trends

Data from the Australian Bureau of Statistics (ABS) show that Australia’s Gross Domestic Product (GDP) increased by 0.9% in the June quarter 2022, resulting in overall growth of 3.9% over 2021-22. This represents the highest year-on-year growth since 2011-12 and a significant increase on the 1.6% growth recorded in 2020-21. Regarding the labour market, the national unemployment rate fell to 3.4% in July 2022 — the lowest rate on record — while the participation rate (66.4% as at July 2022) remains at historically high levels.

Data from the ABS also show that the Australian CPI increased by 1.8% in the June quarter 2022, resulting in growth of 6.1% over 2021-22. This was the highest annual growth in the CPI since June 2001, when the index was affected by the introduction of the Goods and Services Tax.

Since May 2022, the Reserve Bank of Australia (RBA) has raised its cash rate target at each of its monthly meetings in order to combat inflationary pressures in the Australian economy. In his Statement of 6 September 2022 announcing a further increase in the cash rate target, RBA Governor Dr Philip Lowe noted that inflation in Australia is the highest it has been since the 1990s and is expected to increase further over coming months. Dr Lowe acknowledged that high inflation and rising interest rates are putting pressure on household budgets. Dr Lowe also noted that wage growth had picked up from the low levels of recent years, and that labour costs were rising ‘briskly’ in some parts of the economy.

In its latest Statement on Monetary Policy (August 2022), the RBA reported the following outlook for the Australian economy:

• GDP is forecast to grow by 2.25% over 2022-23 and 1.75% over 2023-24
• the national unemployment rate is forecast to decline to around 3.25% in late 2022, before gradually increasing over 2023 and 2024
• the Consumer Price Index (CPI) is expected to peak at around 7.75% towards the end of 2022.

The Victorian Budget 2022/23 (May 2022) noted that the Victorian economy was ‘resilient in the face of COVID-19 outbreaks in 2021 and early 2022’, and was ‘moving beyond recovery to a consolidation phase’. Victoria’s State Final Demand has risen for 3 consecutive quarters and is now around 8% higher than pre‑pandemic levels, while the State’s unemployment rate reached a record low of 3.1% in July 2022.

The Tribunal notes the following movements in prices and wages in the Victorian economy:

• CPI (All Groups) for Melbourne grew by 6.1% between June 2021 and June 2022
• Victorian Wage Price Index grew by 2.5% over the 12 months to June 2022
• average weekly ordinary time earnings for full-time Victorian adults (in seasonally adjusted terms) decreased by 0.02% over the 12 months to May 2022.

The Victorian Budget 2022/23 (May 2022) reported the following economic outlook for Victoria in 2022-23:

• real Gross State Product is forecast to grow by 3.25%
• the unemployment rate is expected to average 4%
• annual growth in the Melbourne CPI is expected to average 2.5%
• annual growth in the Victorian Wage Price Index is expected to average 2.75%

Financial position and fiscal strategy of the State of Victoria

The Victorian Budget 2022/23 reported that the Victorian general government sector recorded an operating deficit of $9.4 billion for the 9 months to 31 March 2022. Total expenses were around 15% higher than the corresponding period in the previous financial year, reflecting the impact of support measures implemented in response to the COVID-19 pandemic.

As at 31 March 2022, net debt for the general government sector was $94.6 billion. Net debt was expected to be $101.9 billion (19.8% of GSP) at June 2022, and forecast to reach $167.5 billion (26.5% of GSP) by June 2026.

The Budget reiterated the Victorian Government’s commitment to the four-step fiscal strategy outlined in the previous year’s Victorian Budget 2021/22:

• Step 1: creating jobs, reducing unemployment and restoring economic growth
• Step 2: returning to an operating cash surplus
• Step 3: returning to operating surpluses
• Step 4: stabilising debt levels.

Wages Policy

The VIRTIPS Act requires the Tribunal to consider any statement or policy issued by the Government of Victoria which is in force with respect to its Wages Policy (or equivalent) and the remuneration and allowances of any specified occupational group.

The Victorian Government Wages Policy and Enterprise Bargaining Framework (Wages Policy), which applies to departments and agencies in the Victorian public sector, is reproduced below.