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WESTERNAUSTRALIA
SALARIESANDALLOWANCESACT1975
DETERMINATIONOFTHE
SALARIESANDALLOWANCESTRIBUNAL
FORLOCALGOVERNMENT
CHIEFEXECUTIVEOFFICERSANDELECTEDMEMBERS
PursuanttoSection7Aand7B
10April2018
PREAMBLE
1. Section7AoftheSalariesandAllowancesAct1975(theSAAct)requirestheSalariesandAllowancesTribunal(theTribunal)atintervalsofnotmorethan12months,toinquireintoanddetermine, theamountof remuneration,or theminimumandmaximumamountsofremuneration,tobepaidorprovidedtochiefexecutiveofficersoflocalgovernments.
2. Section7B(2)oftheSAActrequirestheTribunal,atintervalsofnotmorethan12months,toinquireintoanddeterminetheamountof:
fees,or theminimumandmaximumamountsof fees, tobepaidunder the LocalGovernmentAct1995 (theLGAct) toelectedcouncilmembers forattendanceatmeetings;
expenses, or the minimum and maximum amounts of expenses,tobereimbursedundertheLGActtoelectedcouncilmembers;and
allowances, or the minimum and maximum amounts of allowances,tobepaidundertheLGActtoelectedcouncilmembers.
CURRENTINQUIRY
3. In discharging its statutory requirement with respect to the remuneration of localgovernmentChiefExecutiveOfficers(CEOs)andelectedmembers,theTribunalhas:
invitedlocalgovernmentsandregionallocalgovernmentstoraiseanyissuesrelevanttotheremunerationpaidtotheirCEOortothedeterminationoffees,expensesandallowancesforelectedcouncilmembers;
surveyedlocalgovernmentsandregionallocalgovernmentsastotheremunerationbeingpaidtoCEOsandregardingthefeespaidtoelectedcouncilmembers;and
consideredrelevantlabourmarketandeconomicdata.
ATTACHMENT 1 TO ITEM 11.1.5
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SUBMISSIONS
4. On25January2018,theTribunalemailedlocalgovernmentsandregionallocalgovernmentsto invitesubmissions.TheWesternAustralianLocalGovernmentAssociation(WALGA)andtheWesternAustraliandivisionoftheLocalGovernmentProfessionalsWA (LGPWA)werealsoinvitedtomakesubmissionstotheinquiry.
5. LocalgovernmentswereprovidedwithatemplatesubmissionformtoensuretheTribunalwasabletocapturedataonabroadrangeofissuesincluding:
majorgrowthanddevelopment; significantsocialandeconomicissues; significantdemandtoserviceandsupportnonresidentneeds; highimpactenvironmentalmanagementissuesandresponsibilities; greaterdiversityofservicesdeliveredthannormallyprovidedbysimilarsizedlocal
governments; recruitmentissues; remunerationissues;and otherdistinguishingfeatures.
6. A totalof six submissionswere received from local governments,with the LGPWA and a
memberofthepublicalsomakingasubmission.
7. Aside from those local governments that requested an increase or maintenance inclassification,mattersraisedinthesubmissionsincluded:
amendmentstothehousingallowanceforCEOs; limitingtheICTallowance;and increasestotheratespayabletoelectedmembersandCEOsgenerally.
8. TheTribunalconsideredallfeedbackreceivedduringthecourseoftheinquiry.
SURVEY
9. On 25 January 2018, a survey was provided to local government and regional localgovernmentsinordertoobtaininformationrelatingtotheremunerationprovidedtoCEOsandthefeesprovidedtoelectedmembers.
10. Onlytwoofthe148localgovernmentsfailedtorespondtothesurveywitheachprovidingsufficientreasonsastowhytheywereunableto.
CONSIDERATIONS
11. TheTribunalhasconsideredsections2.7to2.10and5.41oftheLGAct,whichoutlinetheroles and responsibilities of local governments, councillors,mayors, presidents and theirdeputiesandthefunctionsoflocalgovernmentCEOs.
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12. TheinformationreceivedfromindividuallocalgovernmentsensurestheTribunalisinformedondevelopmentsacrossthesector.
LocalGovernmentpopulation,expenditureandstafflevels
13. The Tribunal requested and received the following data from the Department of LocalGovernment,SportandCulturalIndustries(DLGSCI):
Populationasat31March2017(ABSCatalogue3218.0); TotalFullTimeEquivalent(FTE)employees201617; Operatingexpenditure201617;and Threeyearaveragedcapitalexpenditure(201415to201617).
Bandallocationmodel
14. The Tribunal continues to utilise the four band classificationmodel adopted in its 2012determination.Themodelprovidesforarangeoffactorstobetakenintoaccountincluding:
majorgrowthanddevelopment; strategicplanning,includingriskmanagement; infrastructuredevelopmentandassetmanagement; significantsocial/economic/environmentalissues; population significantdemandtoserviceandsupportnonresidentneeds; diversityofservices; communityinvolvementandadvocacy; stateornationalnegotiations; operationalandmanagerialrequirements; capacitytopay; totalexpenditure;and FTEs.
15. TheTribunalconsideredthat localgovernmentsandregional localgovernmentsthatwere
placednearthetoporbottomofabandhadthepotentialtochangebands,regardlessofwhetherasubmissionwasreceived.TheTribunalwillcontinuetoreviewthecircumstancesof each local governments to ensure that the particular issues relevant to those localgovernmentsareaccommodatedwiththebandallocationmodel.
16. TheTribunalnotesthatthereisflexibilityforchangewithineachbandbeforeanincreaseinclassification iswarranted.Arequest foran increase inclassificationwillonlybeacceptedwhere it is demonstrated that the local government or regional local government hasexperiencedasubstantialandsustainedincreaseinthefactorsidentifiedabove.
SurveyResults
17. ThesurveyshowsthatthevastmajorityofCEOs(81%)areremuneratedateitherthemiddle(2674thpercentile)ortop(abovethe75thpercentile)oftheirrespectivebandranges.Only
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threelocalgovernmentsreportedaremunerationpackageinthebottom25thpercentileofitsbandrange.
18. There remainsahandfulof localgovernmentsand two regional localgovernmentswithaPreserved CEO currently remunerated above the determined range. Although PreservedCEOs, as defined by the LG Act, do not fall under the jurisdiction of the Tribunal, LocalGovernmentsareremindedthattheyarerequiredbyclause43(4)oftheLGActtotakeintoaccountanydeterminationoftheTribunalwhenrenewingacontractofaPreservedCEO.
19. The Tribunal also reminds local governments that it is their responsibility to ensure thatpaymentsmadetoCEOsandelectedmembersarewithintherespectivebandranges.TheTribunalnotes thatanumberof localgovernmentsselfreported that theyhadPreservedCEOs,whenthisisnotthecase.AnypaymentsmadeoutsidethescopeofthedeterminationfornonPreservedCEOsisinviolationoftheLGActandSAAAct.
20. InregardstoElectedMembers,theresponsesshowsthatalllocalgovernmentsprovidefeeswithin the bands determined by the Tribunal, as is required.Only one local governmentreportedthatitprovidesnopaymenttoElectedMembers.
21. The Tribunal emphasises that any benefit provided by this determination cannot beproscribed,limitedorwaivedbyadecisionofthelocalgovernment.Anyeligibleclaimagainstthoseentitlementsistobepaidinaccordancewiththeapplicablefinancialproceduresofthelocalgovernment.However,individualMembersmay,actingindependently,waivetheirrighttoreceivefees.
22. Thirtynineofthe144localgovernmentsthatprovidedaresponseremuneratetheirmemberswithapermeetingfee.Ofthese,fivewereBand3localgovernments,thirtyonewereBand4localgovernmentsandthreewereregionallocalgovernments.
CEORegional/IsolationAllowance
23. TheRegional/IsolationAllowanceisavailabletolocalgovernmentslistedunderPart3ofthisdetermination.TheAllowance isdiscretionaryandlocalgovernmentshavetheflexibilitytodetermineanappropriatepaymentnotexceedingthemaximumannualfigurestated.
24. Allbuttwooftheeligible localgovernmentsrespondedtotheTribunalsSurvey.Ofthe52eligiblelocalgovernments,21didnotprovideanypaymentunderthisallowanceandafurther14 provided 50% or less of the allowance. Twentynine local governments providedinformationthattheywerepayingtheirCEOsomeformofRegional/IsolationAllowance.OnlynineoftheselocalgovernmentsprovidedthemaximumallowancetotheirCEOs.
25. The Tribunal reminds eligible local governments that although the Regional/IsolationAllowanceisadditionaltotheTotalRewardPackage(TRP),itistobepaidassalaryandmayattractthesuperannuationguarantee.AsthesuperannuationguaranteeformspartofaCEOsTRP,cautionshouldbetakentoensurethatprovisionofthisallowancedoesnotresultinthemaximumoftheawardedTRPrangebeingexceeded.
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ChristmasandCocosIslands
26. TheCommonwealthandWAGovernmentsenteredanagreementin2016underSection8HoftheChristmasIslandAct1958(Cth),Section8HoftheCocos(Keeling)IslandsAct1995(Cth)and the IndianOceans Territories (Administration of Laws)Act 1992 (WA), such that theSalaries and Allowances Tribunal has the power to determine the remuneration of localgovernment CEOs and the fees, expenses and allowances for local government electedmembersoftheShiresofChristmasIslandandCocos(Keeling)Islands.
27. TheTribunalhas reviewed theShiresofChristmasandCocos (Keeling) Islandsduring thecurrentinquiry.
AnnualreviewprocessandprovisionofdatatotheTribunal
28. TheTribunalwillcontinue torequest informationannually regarding theamountsof fees,expensesandallowancespaidto localgovernmentsandregional localgovernmentelectedcouncilmembersandremunerationprovidedtoCEOs.
29. LocalgovernmentsandregionallocalgovernmentsareadvisedtorecordallfiguresforeachelectedmemberandCEOrelevanttoeachsectionofthedetermination.
ECONOMICCONSIDERATIONS
30. TheTribunalhasnotedarangeoflabourmarketandeconomicdataincludingthefinancialpositionandfiscalstrategyoftheStateassetoutinthe:
WesternAustralianStateBudget201718issuedon7September2017; 201718GovernmentMidYearFinancialprojectionstatementsissuedinDecember
2017; December2017QuarterlyFinancialResults.
31. Theeconomicdifficultiesfacingthestateinclude:
totalpublicsectornetdebt increased to$33.8billionat31December2017,$1.8billionhigherthantheoutcomerecordedat30June2017.Totalgovernmentdebtisprojectedtobe$42.8billionby30June2021;
lowertaxcollections(down$159million); increaseingovernmentexpensesby
