editors letterTHE new Victorian State Government listed as one of its main promises, ahead of last month’s election, that it would force local councils to cap their rates at the consumer price index.
New Labor Premier, Daniel Andrews, said councils wanting to lift rates above CPI would have to appeal to the independent Essential Services Commission and justify their reasons why.
He said the ESC would decide whether the rises were fair, taking into account extraordinary events such as natural disasters, other income sources and the council’s financial state, as well as the continued maintenance of essential council services.
“If the ESC thinks the rise is unreasonable, it will recommend the Local Government Minister block the increase,” Mr Andrews said at the time.
Described as a ‘populist policy’ by MAV President Bill McArthur, that would likely result in a cut to services, it would be reasonable to expect that Mr Andrews would insist on an exhaustive inquiry into local government before adopting the policy.
What would the impact be of limiting rate rises to the CPI?
Would the community get a say?
Would it, as Cr McArthur claims, force councils to consider either reducing services relied on by communities or reducing capital spending to maintain assets?
He appears to have the evidence to back his claims.
National studies continue to show the quality of NSW local infrastructure is lower than other states, primarily as a consequence of years of rate capping.
So, unless the promise was merely ‘populist’ window dressing by Mr Andrews, there would need to be a study done of the impact and while they’re at it, they might as well have a full review of all aspects of the Local Government Act.
We’ve already seen action taken by the previous government over bullying of staff by councillors and suspect tendering/contract practices and there’s also been a review of the local government electoral system with changes to ward structures, number of councillors, postal voting etc coming in.
So why not do a proper job and call for a wholesale review? Here are just a few of the issues that come to mind:
• Wide differences between rates in the city and country, also between similar rural councils
• Rates of pay to Local Government employees
• System of EBA negotiations by individual councils, even individual departments of councils
• Unfettered power of the CEO (introduced by Jeff Kennett)
• Interference in local government elections
• Use of consultants, cost of legal fees and litigation
• Cost-shifting from Federal/State governments to local government
• Benchmarking of minimum/maximum service standards, staff numbers, spending on capital works, services and maintenance
• Disclosure rules
• Farm rate differentials as mandatory
Why is it, for example, that wage earners in the city suburbs pay up to half the rates of home owners in the country when the technology exists now to equalise the disparity and centrally levy rates?
And, as we saw with the appointment of two former Latrobe City officers, to take up two of the four general managers’ roles in Bass Coast, this obvious conflict of interest may not have occurred if there was a better balance between the power of the people-elected councillors and the shire’s CEO.
No system is without fault and if the State Government is set on changing such a fundamental issue as how councils frame their budgets and raise their rates, they should be prepared to have the first fair dinkum review of the sector since Jeff Kennett sacked 1600 elected councillors, appointed commissioners and restructured 210 municipalities into 78 in 1993-94.