ONE size doesn’t fit all when it comes to the State Government’s cap on council rate increases.
But equally, you don’t want to put Dracula back in charge of the blood bank either which is why the State Labor Government had to introduce its ‘Fair Go Rates System’ in the first place in 2016 after local shires continually hammered ratepayers with six per cent plus rate increases annually.
Just before Christmas, the State Government announced that it was retaining its rate cap strategy and allowing a maximum increase of three per cent this coming year, in line with inflation.
While the move has been welcomed by homeowners, it hasn’t been well received by local councils or their peak body, the Municipal Association of Victoria (MAV), which has called for a significant review of the rate capping system.
“While it’s a slight increase – up from 2.75 per cent in 24/25 – councils will have little relief from the extreme financial pressures they have faced in the last four years,” said MAV President Cr Jennifer Anderson.
“Using CPI to inform the rate cap simply doesn’t work for councils. It’s not a true reflection of the increased costs our sector faces in construction, materials, staff wages, and services.”
During the past year, both Kerryn Ellis CEO of South Gippsland and Greg Box CEO of Bass Coast have come out publicly criticising the rate capping policy, Ms Ellis saying the shire would be unable to properly maintain its portfolio of 454 building and structures “ranging from halls to toilet blocks, community centres and aquatic facilities” and Mr Box saying road maintenance was at risk.
He told a parliamentary committee in September that the shire would need to find an additional $1.6 million annually just to keep roads in their present condition.
But the reality is that South Gippsland is one of the highest rating municipalities in regional Victoria, according to the ‘Know Your Council’ website, with a comparison of average rates per property as follow: South Gippsland $2220, Surf Coast $2250, Baw Baw $2090, Bass Coast $1680, and Wellington $1860.
And, according to the same comparison website, South Gippsland has consistently renewed its assets at a rate of 200 per cent plus over the past four years and could afford to rein that in a bit.
Bass Coast by comparison has struggled to maintain assets at a renewal rate of 67.6 per cent, 138.1 per cent, 107.6 per cent and 120.5 per cent respectively over the past four years.
So, in reality, while Bass Coast makes up some of the difference with a much-higher garbage charge, there may be a case for a step adjustment in Bass Coast Shire Council rates, which have always been comparatively low. But the whole response by the state government, and the federal government for that matter, to properly fund local government needs a major overhaul urgently.
While federal and state governments have access to substantial tax revenue, regional councils, in particular, have only a small number of property owners to hit up when managing an ever-expanding list of responsibilities.
And when other levels of government fail in their land management responsibilities for example, as evidenced by the problems at Inverloch beach, it’s left to local government to pick up their pieces.
In the interim however, both local councils need to be developing well-defined efficiency measures as part of the budgetary planning process they are presently engaged in and to consult with the community on their plans in this regard well before the budget is set in stone.
