SOUTH Gippsland Shire Council has revealed a zero per cent rate rise would come at a cost of more than $22 million over the next 15 years.
Acting finance manager Allan Williams told the Sentinel-Times council operated to a 15-year financial plan and specific modelling on the impact of a zero per cent rate rise considered all factors such as bank and investment rates, and the Consumer Price Index (CPI).
“The modelling showed that a zero per cent rate increase had a cumulative impact over that 15 years of $22.4 million,” Mr Williams said.
“If we were to have chosen a zero per cent rate rise for year 2020/2021, given that very significant long-term loss, then we would need to consider a remedy such as an additional rate increase in the following financial year 2021/2022 which it was felt would be much more unpalatable to ratepayers.”
Council’s proposed 2 per cent rate rise would see an average increase of $40.58 per household. The actual amount would be higher for properties valued above the average and lower for those valued less than the shire average.
Mr Williams also said South Gippsland Shire Council was not alone in taking a 2 per cent rate cap position.
“Information from peak bodies is that 72 per cent of councils across the state have taken the same position for the same reasons.
“While a rate increase in the coming financial year may seem unfavourable in the short term, it is the optimal choice for the long term and allows council to rebuild and reinvest into the South Gippsland economy.”
Former councillor Matt Sherry has launched a change.org petition calling for no rate rise and a reversal of council’s hardship policy “to allow for debts to be written off in exceptional hardship cases”.
More than 200 people, including some from outside the South Gippsland Shire Council area, had signed the petition by Monday, May 4.
Public submissions on this year’s draft budget are open until May 28.