FOLLOWING the direction by the Victorian Government to cap the average rate rise in respect of the 2024–25 financial year at 2.75 per cent, several local governments have spoken out about the fiscal difficulties this will pose.
Local Government minister, Melissa Horne said the Fair Go Rates scheme meant that households would have certainty over their council rates with any increase kept to the forecast inflation rate.
“The rates cap has made a real difference to household budgets over the past eight years, and we’ll keep working to reduce costs for families,” she said.
However, some local governments have said that costs are rising higher than the capped amount making budgeting more stringent and potentially meaning some projects would not proceed.
A spokesperson for the Moyne Shire Council said Council officers were preparing the 2024/25 Draft Budget which would be workshopped and put before Councillors at the April 2024 Council
meeting.
“This will be followed by a period of public consultation before the budget is finalised and adopted before June 30,” they said.
“The rate cap will, as always, be considered as part of the standard budget preparation process and deliberations.”
Moyne Shire mayor, Ian Smith said the rate cap of 2.75 didn’t come as any great surprise.
“We are in a good financial position to handle these things,” he said.
“We just have to work within the guidelines – we will be getting directions from our Officers and all Councillors will have the opportunity to have their say on things.
“We expect that a lot of our government grants will be cut back somewhere.
“Whilst it will make things a little difficult, with the increasing costs of inputs, like fuel, labour and those things, it will be subject to council decision – we have budget processes and the 2.75 per cent rate cap will be factored into our 2024/25 budget.
“We have had preliminary talks on the budget, and we were waiting to see what the cap would be and now we will just have to work to that.”
Similarly, Southern Grampians Shire Council chief executive Tony Doyle said the rate cap was a disappointing outcome.
“For the fourth year in a row, the rate cap set by the State Government will be less than the prevailing and forecast inflation rate,” he said.
“In fact, in recent years our rate rise has been less than half of the inflation rate.”
“Whilst we understand no one enjoys paying taxes, Council delivers sixty plus services which are important to the community.
“This includes everything from sporting facilities and reserves - such as HILAC, Melville Oval, Pedrina Park, Sylvester oval and six outdoor pools - right through to services such as the Hamilton Livestock Exchange, Maternal and Child Health, Council owned roads and footpaths along with legislated responsibilities such as Planning and Regulatory services.
“We have more than $427 million in community assets to maintain and renew, yet every year there is a gap between our ability to raise revenue through rates and the cost of delivering these services.
“It becomes increasingly harder to operate.
“What I can assure our community of, is that we take our role as stewards of public funding very conscientiously and have an ongoing business transformation program that is delivering improvements in processes along with cost reductions.
“We continue to strive through this program to lower operating costs and maintain essential services for our community.”
The Victorian Government introduced the Fair Go Rates system in 2016 to reduce cost of living pressures and said its objective had been achieved.
They reported that in the decade before the introduction of the rate cap, council rates increased by an average of 6 per cent per annum.
The average rate cap between 2016-17 and 2023-24 was 2.25 per cent.
Councils are able to apply for a higher rate cap if they can demonstrate community support and a critical need for spending on services or projects that require a rate rise above the capped amount.
There were no applications for an exemption this financial year, when the cap was set at 3.5 per cent.