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The Tribunal is required to make annual adjustments to the values of the allowances set in its Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Determination No. 01/2022, pursuant to section 23B of the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards Act 2019 (Vic)External Link .

Annual Adjustment 2022

On 8 December 2022, the Tribunal made the Allowance payable to Mayors, Deputy Mayors and Councillors (Victoria) Annual Adjustment Determination 2022.

The Tribunal determined a 1.5% increase to the values of the base allowances payable to Mayors, Deputy Mayors and Councillors, effective from 18 December 2022. A 1.5% increase has also been applied to the base allowance values which take effect on:

  • 18 December 2023
  • 18 December 2024 (Mayors and Deputy Mayors only)
  • 18 December 2025 (Mayors and Deputy Mayors only).

The Determination also adjusted the value of the remote area travel allowance by 1.5% (rounded to the nearest dollar).

The full Determination and Statement of Reasons, including the new allowance values, is available here:

As part of making the Determination, the Tribunal issued a notice of intention on 4 October 2022, which outlined the matters being considered by the Tribunal and invited submissions.

The Tribunal received two submissions.

The notice of intention and submissions received are available to read below.

  • The Tribunal received two submissions.

    Read the submissions

  • 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.

    Council
    allowance
    category
    Value of Mayoral base allowance
    from 18 December ($ p.a.)
    2021 2022 2023 2024 2025
    1 74,706 76,781 78,857 80,932 83,007
    2 96,470 99,150 101,830 104,510 107,189
    3 119,316 122,630 125,944 129,259 132,573
    4 238,634 245,262 251,891 258,520 265,148

    Council
    allowance
    category
    Value of Deputy Mayoral base allowance
    from 18 December ($ p.a.)
    2021 2022 2023 2024 2025
    1 37,353 38,391 39,428 40,466 41,503
    2 48,235 49,575 50,915 52,255 53,595
    3 59,658 61,315 62,972 64,629 66,286
    4 119,317 122,631 125,945 129,260 132,574

    Council
    allowance
    category
    Value of Councillor base allowance
    from 18 December ($ p.a.)
    2021 2022 2023
    1 24,080 24,775 25,469
    2 30,024 30,890 31,756
    3 35,972 37,010 38,047
    4 53,957 55,513 57,070

    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)External Link .

    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)External Link . Any such request will be determined in accordance with the Freedom of Information Act 1982 (Vic)External Link 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 CommissionerExternal Link .

    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.

    Data from the Australian Bureau of Statistics (ABS) show that Australia’s Gross Domestic Product (GDP)External Link 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 rateExternal Link fell to 3.4% in July 2022 — the lowest rate on record — while the participation rateExternal Link (66.4% as at July 2022) remains at historically high levels.

    Data from the ABS also show that the Australian CPIExternal Link 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 StatementExternal Link 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 PolicyExternal Link (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 2022/23External Link (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 DemandExternal Link has risen for 3 consecutive quarters and is now around 8% higher than pre‑pandemic levels, while the State’s unemployment rateExternal Link reached a record low of 3.1% in July 2022.

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

    The Victorian Budget 2022/23External Link (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 2022/23External Link 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.

    The Victorian Government Wages Policy and Enterprise Bargaining Framework has three pillars:

    • Pillar 1: Wages — increases in wages and conditions will be capped at a rate of growth of 1.5 per cent per annum over the life of the agreement. In practice this means employee wages and conditions will be allowed to grow at this rate.
    • Pillar 2: Best Practice Employment Commitment — all public sector agencies will be required to make a Best Practice Employment Commitment which will outline measures to operationalise elements of the Government’s Public Sector Priorities that reflect good practice within Government and can be implemented operationally or without significant costs.
    • Pillar 3: Additional strategic changes — additional changes to allowances and other conditions (not general wages) will be capped at 0.5 per cent per annum of the salary base and will only be allowed if Government agrees that the changes will address key operational or strategic priorities for the agency, and/or one or more of the Public Sector Priorities.

    A ‘Secondary Pathway’ is also available for public sector agencies whose current enterprise agreement reaches its nominal expiry date between 1 January 2022 and 31 December 2022 which permits one annual wage and allowance increase capped at 2 per cent (instead of at 1.5 per cent).

    Source: Industrial Relations Victoria, Wages Policy 2022 (State Government of Victoria: Melbourne, Victoria, 2021).

Reviewed 08 December 2022

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