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Without limiting the matters on which interested parties might wish to make submissions, the Tribunal is interested in receiving submissions on the following questions.

Value of salaries

The Tribunal’s setting of salaries aims to ensure fair and reasonable recompense for MPs performing their public duties. In other words, the salaries provided to MPs and office holders should be commensurate with their roles and responsibilities, and be sufficient to attract and retain MPs that effectively represent the interests of the community.

Similarly, remuneration relativities — the relative differences between the salaries provided to different MPs, including office holders — should adequately reflect the differential responsibilities and characteristics of each role.

Questions for discussion

  • Since the Tribunal’s 2019 Determination, what substantive changes, if any, have occurred to:
    • the role of an MP?
    • each office holder role?
    • how MPs and office holders perform their roles?
  • Do MP salaries, including additional salaries paid to office holders, provide fair and reasonable recompense for MPs performing their public duties?
  • Do the relativities between the basic salary paid to all MPs and additional salaries paid to office holders accurately reflect their respective responsibilities?
  • Are there any other matters that you believe the Tribunal should consider in setting the value of MP salaries?

Value and structure of allowances and the EO&C Budget

Allowances and the EO&C Budget support MPs to perform their public duties.

In 2020, the Tribunal carried out a comprehensive review of the MP Guidelines, aimed at addressing anomalies or areas of ambiguity, and released updated Guidelines in 2021 [The Tribunal further updated the MP Guidelines in October 2022 to reflect changes to electorates that were announced by the Electoral Boundaries Commission in October 2021].

Box 6.1 summarises the key changes to the MP Guidelines that were made following that review.

Box 6.1: Key changes to the MP Guidelines made in 2021

  • The Statement of Principles and overarching obligations under the PSAS Act were inserted at the beginning of the MP Guidelines.
  • Preambles were inserted to clarify the purpose of the different allowances and EO&C Budget.
  • Definitions were included for the four categories of ‘public duties’ under the PSAS Act.
  • The section on the EO&C Budget was amended to provide:
    • detailed and specific prohibitions on the types of expenses that can be claimed, in particular with regard to party political activity
    • that the names and logos of political parties may be included in communication materials
    • further clarity around the issuing of joint communications
    • that computer software and IT systems may be claimed, provided they comply with parliamentary networks and equipment
  • Eligibility criteria for the commercial transport allowance and international travel allowance were amended to provide that MPs may claim the cost of reasonable commercial transport directly to or from a Victorian airport.

Source: Victorian Independent Remuneration Tribunal (2021b), pp. 3-7.

In addition to the MP Guidelines, other mechanisms govern the role, functions and duties of MPs, including the Code of Conduct for Members of the Parliament of Victoria established by the Members of Parliament (Standards) Act 1978 (Vic). The Code of Conduct includes provisions relating to the public duties of MPs, the use of public resources, conflicts of interest and the personal conduct of MPs.

MPs are also subject to the scrutiny of independent integrity bodies, including the Independent Broad-based Anti‑corruption Commission (IBAC), which investigates corrupt conduct [IBAC (2022)], and the Victorian Ombudsman, which investigates public interest complaints against MPs [Ombudsman Act 1973 (Vic), Part 4, Division 1A].

In July 2022, IBAC and the Victorian Ombudsman released a report on Operation Watts, a joint investigation into allegations of serious corrupt conduct involving Victorian public officers, including MPs [IBAC and the Victorian Ombudsman (2022)]. The Victorian Government released its response to the report in July 2022, which stated that the Government supported all of the recommendations in the report and would work with the Victorian Parliament and other parties to implement specific recommendations [State Government of Victoria (2022)].

These changes may affect the obligations of MPs to ensure the proper management of their electorate office, electorate staff and their use of allowances and the EO&C Budget.

Questions for discussion

  • Do the values of allowances and the EO&C Budget provide fair and reasonable recompense to MPs in supporting them to perform their public duties?
  • Should further changes to the MP Guidelines be considered, consistent with the overarching legislative framework and the implementation of the recommendations of the Operation Watts report?

Potential roll-in of expense allowance into additional salary

In its 2019 Determination, the Tribunal rolled the minimum expense allowance paid to all MPs into the basic salary, while retaining the expense allowance for eligible office holders. The Tribunal considered that this would make MP remuneration arrangements simpler and more transparent.

The expense allowance paid to eligible office holders has several similarities with MP additional salaries:

  • the value depends on the office held
  • it is paid fortnightly and MPs are not required to spend it on particular categories of activities
  • it is treated as income by the ATO.

There may be advantages to rolling the expense allowance for eligible office holders into their additional salary, for example, in terms of further clarifying and simplifying MP remuneration arrangements.

    Questions for discussion

    • Should part of or all of the expense allowance be rolled into the additional salary for eligible office holders? What would be the advantages and disadvantages of this approach?

    Potential reforms to the PASA

    In its 2019 Determination, the Tribunal stated that the introduction of the travel allowance [Victorian Independent Remuneration Tribunal (2019), p. 145]:

    … seemed to have diminished the need for the PASA. This suggests further consideration of the PASA, including setting any limitations on it, is desirable. However, the Tribunal is conscious that some MPs in the current Parliament are in receipt of this allowance and have organised their affairs accordingly. At this stage the most appropriate course is to not vary the current arrangements in respect of the PASA.

    In each of its 2020, 2021 and 2022 annual adjustment Determinations, the Tribunal made no change to the value of the PASA, effectively reducing its real value over time, given movements in inflation.

    A further option would be to ‘phase out’ the PASA over time, for example, by setting the value of the PASA equal to zero for MPs elected after a certain date in the future. This type of grandparenting arrangement would provide continued eligibility for the PASA for sitting MPs elected prior to the making of the 2023 Determination, given they may have arranged their affairs expecting to claim the PASA. However, MPs elected after the date of the 2023 Determination would not be eligible for the PASA, but would instead be able to rely on claiming the travel allowance in accordance with the MP Guidelines.

    This option may require the Governor in Council to amend regulations providing for an MP’s date of election to be a prescribed criterion for varying a work‑related parliamentary allowance [A Determination may provide for a work-related parliamentary allowance (including the PASA) to vary according to the area of the electorate represented by the MP, the number of electors represented by the MP, the place at which an MP usually resides, or any other prescribed criteria. VIRTIPS Act, s. 17(2)].

    Questions for discussion

    • Given the diminished need for the PASA associated with the introduction of the travel allowance, should the Tribunal consider narrowing eligibility for claiming the PASA to MPs elected before the date of the 2023 Determination (noting this may require changes to regulations)? What would be the advantages and/or disadvantages of this option?
    • Are there are other options that should be considered to reduce duplication between the PASA and the travel allowance?

    Reviewed 15 December 2022

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