Message from the Chair

Victorian Independent Remuneration Tribunal Annual Report 2022-23 - message from the Chair.

Dear Assistant Treasurer

The main task undertaken by the Tribunal in financial year 2022-23 was a comprehensive Determination of salaries and allowances for MPs. This was the first comprehensive Determination since the original Determination in 2019.

In the course of this work, the Tribunal sought to extend its engagement and opportunities to participate in the process. In addition to a formal notice of intention inviting submissions, the Tribunal published a consultation paper containing background information and outlining issues on which it was seeking input and met with a number of individual MPs as well as a roundtable group drawn from across the Parliament. These were important steps towards an open and consultative approach. The Tribunal will continue to look for opportunities to broaden its engagement with its constituent groups.

In response to submissions a number of changes were made to the MP Guidelines as part of the Determination – including providing greater flexibility for MPs in using the Electorate Office and Communications Budget to communicate with their constituents and making it clear that an MP may claim the travel allowance for an overnight stay immediately preceding and following parliamentary, committee or ministerial business. The Tribunal was pleased to be able to make these changes to support MPs in carrying out their public duties and will look to further refinements in the future wherever improvements can be made.

I would like to acknowledge the excellent cooperation of the Department of Parliamentary Services and its Secretary, Trish Burrows, in raising matters for consideration and in advising on the workability or otherwise of the various proposals. I would also like to thank the Clerks of the Parliament of Victoria, Bridget Noonan and Robert McDonald, for their assistance during the Determination process.

In addition to the comprehensive Determination for MPs, the Tribunal also made annual adjustments to the remuneration bands for public service and public entity executives, and to the value of allowances for Local Government Mayors, Deputy Mayors and Councillors. In so doing, the Tribunal took the opportunity to bring the timing of future annual adjustments for Local Government into alignment with MPs and executives.

The comprehensive Determination for MPs and each of the annual adjustments were made during a period of relatively high inflation in Australia and the world. Although all of the matters the Tribunal is required to consider under its legislation were weighed carefully, the Tribunal was mindful of the impact of its decisions on the broader economy. Thus, particular weight was given to the Government’s wages policy and current and projected economic conditions and trends, in seeking to find the right balance between wages fairness for the occupational groups within the Tribunal’s jurisdiction and the need for restraint dictated by the prevailing economic circumstances.

During the year the Tribunal surveyed MPs, Local Government Mayors and public sector employers about the Tribunal’s performance in relation to its communication and consultation processes, the timeliness of its decisions and its method of responding to viewpoints and issues raised by stakeholders. Respondents reported an overall satisfaction level of 87 per cent — significantly above the target rate of 80 per cent.

Nevertheless, over the coming year, the Tribunal proposes to further improve the information it provides about the reasons for its decisions and to reach out to key stakeholders to explain the Tribunal’s statutory responsibilities and how it goes about its decision-making process. Public commentary including in the mainstream media suggests that there is only limited understanding of the legislative framework within which the Tribunal operates – notwithstanding the detailed statement of reasons that accompanies each Tribunal Determination and the comprehensive information available on its website.

This financial year was the second full year of the operation of the payment above the band process. As you know, if an employer proposes to pay an executive above the maximum of the relevant remuneration band, the employer must first seek and consider the advice of the Tribunal. The employer is not bound to accept the advice. In providing advice, the Tribunal strives to protect the integrity of the overall remuneration structure and at the same time recognise that there may be circumstances where prevailing market conditions justify a departure from the standard structure.

Over the course of the year, the Tribunal provided advice in response to 44 requests from public sector employers; 14 were from Victorian Public Service employers and related to 36 individual executives and 30 were from public entity employers and related to 40 individual executives – an overall decline of 20 per cent in the number of requests from the previous year.

Stated in another way, there are around 2,700 executives employed in the Victorian public sector that are within the Tribunal’s jurisdiction (based on the latest available data), and payment above the band requests were made for less than 3 per cent of these in 2022-23. Thus, it is pleasing to be able to again report that the remuneration bands determined by the Tribunal appear to be appropriate for the vast majority of executives.

During the course of the year the Tribunal welcomed a new Member – Laurinda Gardner – to its ranks. Laurinda brings vast experience in the Victorian Public Service, Local Government and various government boards to the role, and it is a pleasure to work with her.

Finally, I would like to acknowledge the continuing exemplary performance of the Tribunal’s Secretariat in every aspect of its work in supporting the Tribunal.

On behalf of the Tribunal’s Members, it is my pleasure to submit this report to you.

Yours sincerely

Warren McCann

Victorian Independent Remuneration Tribunal