Victoria won't follow NSW in freezing MPs' pay after being awarded a 3.5 per cent salary rise amid the nation's cost-of-living crunch.
From July 1, the base salary of Victorian MPs will increase to $198,839 a year plus expenses after a decision by the Victorian Independent Remuneration Tribunal.
Premier Daniel Andrews is set to bank $481,190 next financial year, up more than $16,000, along with an increased expense allowance of up to $60,480.
It means the Labor leader, who has pledged to serve a full four-year term in the top job after November's election win, remains the country's highest-paid premier.
The newly elected NSW Labor government introduced legislation last month to freeze the pay of state MPs and public service senior executives for two years from July 1.
The measure is expected to save the NSW budget $260 million over four years.
Mr Andrews said Victoria would not follow the same course after his government established the independent pay tribunal in 2019.
"An independent body determines all of our pay, terms and conditions," he told reporters at state parliament on Wednesday.
"There was a time when politicians set their own pay and we took steps to change that. We stand by those decisions."
The tribunal considers various factors when making its determinations, including the government's wages policy and the financial position of the state.
Victorian MPs were handed a 2.75 per cent salary increase last financial year.
Opposition Leader John Pesutto, who will be paid just over $383,000 in 2023/24, has called for a review of the tribunal, declaring the 3.5 per cent hike doesn't meet community expectations.
"I don't think Victorians believe that politicians should never get pay increases," he said.
"Victorians, like everyone else around the country, believe in fair and reasonable increases, but not ones that overshoot the runway like this."
Mr Pesutto confirmed he would not donate his pay rise to charity, while the premier declined to say if he would but noted his family already made charitable contributions.
In April, the Victorian government unveiled an updated policy for the state's public sector workers, bumping annual wage increases from 1.5 per cent to three per cent.
Community and Public Sector Union Victorian secretary Karen Batt questioned why politicians deserved a higher raise than her members.
"You're going to need a better wages policy for your workforce or take what you've served up to us," she said in a statement.
It was a sentiment echoed by Victorian Ambulance Union secretary Danny Hill.
"What improvements have pollies provided to receive 3.5 per sent?," he wrote on social media.
"Whatever it is, I'm sure paramedics can roll up their sleeves and add it to a 14-hour night shift with no meal break."
Victorian Greens Leader Samantha Ratnam said she and her party support the tribunal framework but pay rises should not exceed the state's public sector wage cap.
"When you suppress public sector wages, you suppress wages right across the board," she said.
"There is a massive cost of living issue bearing down on thousands of Victorians."
