2024 Determination of VPS executive remuneration bands

The Determination will set the values of the remuneration bands which apply to executives employed in public service bodies.

Public service bodies are defined under the Public Administration Act 2004 (Vic) (PAA) as:

• departments
• Administrative Offices
• the Victorian Public Sector Commission.

Once in effect, the Determination will supersede the Tribunal’s Remuneration bands for executives employed in public service bodies (Victoria) Determination No. 01/2020 (as amended by annual adjustment Determinations made in 2021, 2022 and 2023). View the current values of the remuneration bands.

Employers will retain the power to set the remuneration for an individual executive within the relevant remuneration band.

The Tribunal is also required to make a new Determination setting the values of the separate remuneration bands for executives employed in prescribed public entities. The Tribunal intends to publish a notice containing details about that Determination and inviting submissions in mid-2024.

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

The Tribunal also invites submissions on whether any changes should be made to the Victorian Public Service Executive Remuneration Guidelines (VPS Guidelines). The Tribunal published the VPS Guidelines in May 2020 to assist employers in placing executives within the remuneration bands.

The Tribunal has also invited each VPS executive (via email) to complete an online questionnaire seeking their views on their role and the existing remuneration framework, among other matters. If you are a VPS executive and you have not received this invitation, please contact the Tribunal Secretariat at enquiries@remunerationtribunal.vic.gov.au.

Consultation questions

Without limiting the matters interested parties may wish to address in a submission, the Tribunal is particularly interested in receiving views on the following questions:

1. How has the role of the VPS, and those of VPS executives (including public service body Heads), evolved since 2020, when the Tribunal last reviewed the roles of executives?
2. Are the values of the existing remuneration bands competitive in terms of attracting and retaining executive talent?
3. Are the values of the existing remuneration bands fair and equitable for employers and executives?
4. In benchmarking the remuneration of VPS executives against the broader market, what is an appropriate market positioning (e.g. low, middle or high), and why?
5. Is the difference in remuneration levels for non-executives and executives appropriate?
6. Are the values of the existing remuneration bands aligned with government policies in relation to gender equality and broader diversity objectives?
7. How should the Tribunal consider the non-financial aspects of working as an executive in the VPS, that is, the ‘employee value proposition’?
8. Are the Tribunal’s VPS Guidelines fit-for-purpose? If not, what changes should it consider?
9. Are there any other matters the Tribunal should consider as part of its deliberations?

How to make a submission

Submissions (and requests for assistance with making a submission) should be emailed to the Tribunal Secretariat at enquiries@remunerationtribunal.vic.gov.au.

Written submissions must be received by 5pm on Friday 1 March 2024.

Those wishing to make an oral submission must advise the Tribunal Secretariat via email by 5pm on Friday 2 February 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). 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.

Under the VIRTIPS Act, the earliest that the Determination can be made is mid-May 2024. The Tribunal intends to make its Determination in June 2024, ahead of a proposed effective date of 1 July 2024.

In setting the values of the remuneration bands, the Tribunal aims to provide a remuneration framework that is fair and reasonable and enables VPS bodies to attract and retain talented executives to deliver the agenda of the government of the day.

The Determination is required to include a comprehensive review of the roles of executives employed in public service bodies and the existing remuneration provided to them, and must also provide for any other matter that the Tribunal considers relevant.

In addition, the Tribunal is legislatively 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 Victorian Government which is in force with respect to its wages policy (or equivalent) and the remuneration and allowances of any specified occupational group
• submissions received in relation to the proposed 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, the outcome of the Fair Work Commission’s Annual Wage Review 2023‑24 (expected in May to June 2024) and other relevant information.

The Tribunal will also consider the latest data on key economic indicators published by the Australian Bureau of Statistics (ABS), including data on economic growth, labour market conditions and movements in prices and wages.

The below table summarises key ABS data about the Victorian and Australian economies at the time of issuing this notice (November 2023).

_{Notes:  All growth rates are annual.}

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 other relevant information.

At the time of issuing this notice, the Tribunal notes that:

• according to Victoria’s latest quarterly financial report (November 2023), over the three months to 30 September 2023:
  • the general government sector recorded an operating deficit of $2.5 billion
  • net debt for the general government sector increased by $5.5 billion to $120.6 billion
• the Victorian Budget 2023-24 (May 2023) 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 policies

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

The Wages Policy provides for increases in wages and conditions to be funded at a rate of growth of 3 per cent 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 per cent of overall agreement costs.

The Tribunal is also required to consider Victorian Government policies in relation to the remuneration of executives employed in public service bodies. These include the requirement for public service bodies to absorb the cost of increases to executives’ minimum superannuation entitlements under Commonwealth law.

Minimum superannuation entitlements will increase on 1 July 2024 due to the following changes:

• The Superannuation Guarantee rate is scheduled to increase from 11 per cent to 11.5 per cent.
• The maximum superannuation contribution base will be indexed in line with full-time adult average weekly ordinary time earnings.