Council rate rises capped at 2.75 per cent despite criticism
South Gippsland Shire Council has previously said the cap fails to cover actual costs
VICTORIAN councils will be limited to rate increases of 2.75 per cent next financial year under the state government's Fair Go Rates System.
Local Government Minister Nick Staikos announced the cap today, matching the forecast inflation rate.
"The rates cap has made a real difference to household budgets," Mr Staikos said.
But South Gippsland Shire Council has previously pushed back against the system, arguing it leaves them unable to keep pace with rising costs.
In June, South Gippsland Shire Councillor Sarah Gilligan criticised the cap, stressing council had to budget to keep the lights on but was constrained in terms of new initiatives or capital works.
"This means councils haven't kept up with CPI (consumer price index) for almost a decade," Cr Gilligan said.
Cr Gilligan's criticism was backed by now Mayor Nathan Hersey, who said cost-shifting from State Government to council needed to be addressed.
Municipal Association of Victoria president Councillor Jennifer Anderson has called for a review, arguing the cap covers only 60 per cent of actual cost increases councils face.
Mr Staikos also announced new guidelines requiring councils to ensure waste charges reflect actual collection costs.
Before the Fair Go Rates system began in 2016, council rates were increasing by an average of six per cent a year.
