Council rates Victoria: Rates cap squeezes rural shires, cities
MANY rural Victorian councils are being squeezed by the State Government’s Fair Go rates cap, with continued ambiguity over a probe into the controversial scheme.
MANY rural Victorian councils are being squeezed by the State Government’s Fair Go rates cap, with continued ambiguity over a probe into the controversial scheme.
With municipal draft budgets being formulated across Victoria, more than a dozen councils contacted by The Weekly Times expressed concern over the impact of the cap on their revenue base, as well as farmer frustration over shouldering a greater burden.
Local Government Minister Adem Somyurek last week flagged a re-examination of the “Fair Go” rates cap, with the probe set to start next month.
Only one council — Monash in suburban Melbourne — received approval from the Essential Services Commission to raise rates above the inflation-level cap for the 2018-19 financial year.
No application has been made to the ESC to do the same in 2019-20 as of this week.
West Wimmera Shire chief executive David Leahy said rural councils try to set rates with the community’s ability to pay at the front of their thinking.
“Unfortunately, the ability to raise sufficient funds from small communities is non-existent,” he said.
“There are very limited opportunities to raise funds from fees and user charges and this lack of revenue opportunity leads to rural communities needing to accept lower service levels.”
Bass Coast mayor Brett Tessari said the reduced capacity to increase rates revenue, coupled with lower recurrent grants, resulted in the council relying “more heavily on delivering lower cost or reduced services whilst also seeking increased use of other income streams such as borrowings.”
Horsham Rural City corporate services director Graeme Harrison said council revenue sources needed to be broadened beyond just a tax on property values.
“(That would) improve the correlation between rates paid and services received,” he said.
“Currently there is no direct linkage between service received and rates paid, which leads to debate about what is and is not fair.”
Murrindindi Shire corporate services director Michael Chesworth echoed that sentiment.
“Our primary worry is the long term sustainability of maintaining the assets and service levels our customers expect, alongside our obligation to meet the changes that come with growth in our municipality,” he said.
Mr Somyurek told the Victorian Farmers Federation grains conference in Geelong last week that the review would be conducted by “independent experts”.
“I believe councils ought to be autonomous,” Mr Somyurek said. “We’re not seeking to erode local democracy by getting involved in ad hoc intervention.”
National Party state leader Peter Walsh said: “In some shires farms rates went up almost 30 per cent last year - there’s nothing fair in that.”
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