Victorian MPs are set to receive a 3.5 per cent pay increase starting from July 1.

The latest decision by the state’s independent remuneration tribunal raises backbench MPs' salaries to nearly $200,000 and boosting Premier Daniel Andrews' pay to over $481,000. 

The rate was raised despite the Victorian Greens' argument that the increase should be limited to 1.5 percent due to MPs' already generous wages.

The pay rise will bring a backbench MP's salary to $198,839, while Premier Andrews’ a $16,272 increase, totaling $481,890, including expenses and allowances, making him the highest-paid premier in the country.

Deputy Premier Jacinta Allan's pay will rise to over $409,000, while Opposition leader John Pesutto's salary will reach $383,860, similar to that of a cabinet minister. 

The determination of salaries is made by the independent tribunal, and a spokesperson for the Victorian government has emphasised that politicians do not set their own pay.

The pay increase has drawn criticism from various quarters. 

Small business chief Bill Lang has called on MPs to donate their raises, and Karen Batt, the Victorian head of the Community and Public Sector Union, expressed disapproval, suggesting that a better wages policy should be implemented for the workforce.

The pay rise announcement comes amidst a confrontation between Victorian unions and Premier Andrews, as he declined to follow New South Wales' lead in removing the state's wage cap. 

Meanwhile, the state's public sector wages cap is set to increase from 1.5 per cent per annum to 3 per cent as Victoria aims to recover from pandemic-related expenses.
More details are accessible here.