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WESTERN AUSTRALIA SALARIES AND ALLOWANCES · PDF fileand determine, the amount of remuneration, or the minimum and maximum amounts of remuneration ... strategic planning, including

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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

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