Review of operations

2. Review of operations

In 2021-22, the Tribunal undertook work in relation to remuneration arrangements for the following occupational groups:

Members of the Parliament of Victoria (MPs)
executives employed in Victorian Public Service (VPS) bodies and prescribed public entities (PEs)
Mayors, Deputy Mayors and Councillors 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 [reference - VIRTIPS Act, ss. 6(1)(a)-(b)]. It may also make guidelines with respect to the use of some work-related parliamentary allowances (MP Guidelines) [reference - VIRTIPS Act, s. 36(1)].

Following the Tribunal’s first Determination of MP salaries and work-related parliamentary allowances (made in 2019), the Tribunal is required to make a new Determination within six months after the first sitting day of each subsequent Parliament [reference - VIRTIPS Act, s. 17(7)].

The Tribunal is also required to make a Determination providing for an annual adjustment to the values set in the current MP Determination [reference - Members of Parliament (Victoria) Determination No. 01/2019 (MP Determination) and VIRTIPS Act, s. 18]. The Tribunal is required to consider a range of economic and financial factors, as well as submissions received, when making a Determination [reference - VIRTIPS Act, s. 24(2)].

On 22 June 2022, the Tribunal made the Members of Parliament (Victoria) Annual Adjustment Determination 2022 (2022 MP Annual Adjustment Determination). The 2022 MP Annual Adjustment Determination adjusted the values of MP salaries and work-related parliamentary allowances set in the Tribunal’s MP Determination with effect from 1 July 2022.

The 2022 MP Annual Adjustment Determination increased by 2.75 per cent the values of the:

basic salary
additional salaries for specified parliamentary office holders
expense allowance paid to certain specified parliamentary office holders.

It also made adjustments to the:

electorate allowance: 3.6 per cent
EO&C Budget: 3.6 per cent
motor vehicle allowance: 11.8 per cent.

The Tribunal determined to make no adjustment to the following work-related parliamentary allowances provided to MPs:

international travel allowance
commercial transport allowance
parliamentary accommodation sitting allowance.

The Tribunal also updated Schedule B of the MP Determination to reflect changes to State electorates and electoral boundaries.

The Determination and accompanying Statement of Reasons is available on the Tribunal’s website.

2.2 Executives

The Tribunal is responsible for inquiring into and determining the remuneration bands for executives employed in public service bodies and PEs [reference - VIRTIPS Act ss. 6(d) and 6(g)].

The Tribunal also has the functions of [reference - VIRTIPS Act, s. 6]:

issuing guidelines with respect to the placement of executives within the remuneration bands
providing advice to employers proposing to pay an executive above the relevant remuneration band
providing advice to the Minister about the remuneration of executives.

During 2021-22, the Tribunal’s work in relation to executives comprised:

Determinations providing for an annual adjustment to the values of the remuneration bands for executives employed in public service bodies and prescribed public entities
advice to public sector employers proposing to pay an executive above the relevant remuneration band
completing a review of base remuneration for specialist investment executive roles at the Victorian Funds Management Corporation (VFMC) and the Treasury Corporation of Victoria (TCV)
progressing a review of remuneration arrangements for executives in the transport infrastructure sector.

Annual adjustment Determinations

The Tribunal made annual adjustments to the following Determinations:

Remuneration bands for executives employed in prescribed public entities (Victoria) Determination No. 01/2020 (PE Comprehensive Determination)
Remuneration bands for executives employed in public service bodies (Victoria) Determination No. 01/2020 (VPS Comprehensive Determination).

Uniquely, in 2021-22, the Tribunal was required to make two annual adjustments to the PE Comprehensive Determination, one for the 2021-22 financial year and one for the 2022-23 financial year.

The Tribunal made the Remuneration bands for executives employed in prescribed public entities (Victoria) Annual Adjustment Determination 2021 (2021 PE Annual Adjustment Determination) on 18 November 2021. This Determination adjusted the values of the remuneration bands set in the PE Comprehensive Determination with effect from 1 July 2021 [reference - Under the VIRTIPS Act (section 20), the Tribunal cannot make an annual adjustment to remuneration bands for executives employed in prescribed public entities within nine months of making a PE Comprehensive Determination. The PE Comprehensive Determination was made on 18 December 2020, which meant that the 2021 PE Annual Adjustment Determination was unable to be made before 18 September 2021].

Taking into account the factors the Tribunal is required to consider under the VIRTIPS Act, the 2021 PE Annual Adjustment Determination provided for:

a ‘standard rate’ adjustment of 2.5 per cent to the notional salary component of the remuneration bands
a further adjustment of between $925 and $1,874 to the remuneration bands to reflect increases to executives’ statutory superannuation entitlements which took effect on 1 July 2021.

On 22 June 2022, the Tribunal made the Remuneration bands for executives employed in prescribed public entities (Victoria) Annual Adjustment Determination 2022 (2022 PE Annual Adjustment Determination) and the Remuneration bands for executives employed in public service bodies (Victoria) Annual Adjustment Determination 2022 (2022 VPS Annual Adjustment Determination).

Those Determinations adjusted the values of the remuneration bands set by the Tribunal with effect from 1 July 2022.

The 2022 PE Annual Adjustment Determination and 2022 VPS Annual Adjustment Determination both provided for:

a ‘standard rate’ adjustment of 3.6 per cent to the notional salary component of the remuneration bands
a further adjustment of between $1,110 and $1,919 to the remuneration bands to reflect increases to executives’ statutory superannuation entitlements which took effect on 1 July 2022.

The Determinations and accompanying Statement of Reasons are available on the Tribunal’s website.

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 [reference - VIRTIPS Act, s. 37(1)].

The Tribunal provided advice in response to 55 requests from public sector employers to pay an executive above the maximum of the relevant remuneration band.

32 requests were from VPS employers and related to 62 individual executives. Approximately 74 per cent (46) of those executives were in the transport infrastructure sector (i.e. the Major Transport Infrastructure Authority or the Suburban Rail Loop Authority) [reference - At the start of the 2021-22 financial year, the Suburban Rail Loop Authority was a public service body (an Administrative Office). However, the Suburban Rail Loop Authority became a public entity on 1 December 2021. For the purposes of this Annual Report, the Suburban Rail Loop Authority has been treated as a public service body for the 2021-22 financial year].

23 requests were from PE employers and related to 26 individual executives, of which approximately 46 per cent (12) of those executives were in the finance sector (i.e. VFMC or TCV).

Requests for advice from the Minister

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

In this regard, the Tribunal:

provided a report to the Minister for Government Services, in response to his request that the Tribunal benchmark the base remuneration for specialist investment executive roles at VFMC and TCV
progressed a review of remuneration arrangements for executives in the transport infrastructure sector, in response to a request received from the Minister in June 2021.

2.3 Mayors, Deputy Mayors and Councillors

The Tribunal is responsible for making Determinations setting the values of the allowance payable to Mayors, Deputy Mayors and Councillors (Council Members) in all 79 local governments in Victoria [reference - VIRTIPS Act, s. 23A].

On 17 June 2021, the Minister for Local Government wrote to the Tribunal Chair requesting that the Tribunal make its first such Determination [reference - The Minister for Local Government’s letter detailed several matters, including a review of the existing allowance categories, allowances for Mayors, Deputy Mayors and Councillors and annual indexation of allowances, for possible consideration by the Tribunal, in addition to the factors it is required to consider under section 24 of the VIRTIPS Act].

On 5 July 2021, the Tribunal published a notice of its intention to make a Determination and a consultation paper to support parties in making a submission. The Tribunal received 48 submissions.

The Tribunal also:

distributed a questionnaire to each currently-serving Council member and received 258 responses
received oral submissions from representatives of eight different organisations.

The Tribunal made the Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Determination No. 01/2022 on 7 March 2022 (Local Government Determination), which took effect retrospectively on 18 December 2021.

The Local Government Determination set the value of the base allowance for each Council member, which varies depending on the Council member’s role and the allowance category to which each Council has been assigned.

The Determination provided for further scheduled annual increases to allowance values through to 2025.

The Local Government Determination also set a remote area travel allowance and eligibility criteria for claiming it.