Wrong time to increase rates, says ratepayers’ group

A NEW rate cap of 3.5 per cent is being offered to all Victorian councils by the State Government in the 2023/24 financial year, but Bass Coast Ratepayers and Residents Association President Kevin Griffin is fearful the local shire will take the maximum from local ratepayers.

He said it was a terrible time for the State Government to be raising rates, with many homeowners struggling with higher interest rates and inflation, and he cautioned the shire against immediately introducing the highest possible rates.

“It should be a case-by-case assessment as to whether a local shire accepts the full increase in rates,” Mr Griffin said this week.

“In our case, the Bass Coast Shire Council will have to be completely open and transparent about any increase proposed, but I’m not confident that will be the case.

“Bass Coast has consistently proposed Capital Works programs they have been unable to deliver, so if they can’t complete the work, they shouldn’t be taking the money from the ratepayers.”

Mr Griffin said councils should concentrate first on efficiency gains, and on getting the most out of the administration spend so that more money is available for works and services.

“We don’t want to see any extra money going into wages and salaries without a clear explanation.”

The State Government has justified the move away from minimal rate capping by arguing it is “protecting Victorians from uncontrolled rate hikes”, if rate increases were put back in the hands of local municipalities, “while ensuring local governments remain financially sustainable”.

Minister for Local Government Melissa Horne announced the cap this week, under the State Government’s Fair Go Rates system.

“The rate cap for the next financial year takes into account higher inflation and the need to protect Victorians from uncontrolled rate hikes, while ensuring councils can continue to deliver vital community services,”

“Each council is responsible for setting rates within the rate cap based on the needs of their community.”

“Community members have the chance to engage with their local councils as they make decisions about rate rises through their budget process each year,” said Minister Horne

The Fair Go Rates system was introduced in 2016 to ease cost of living pressures on Victorians and encourage sound financial management by local governments.

In the decade before the system was introduced, council rates increased by an average of six per cent every year.

The decision on the rate cap for the next financial year was guided by independent advice from the Essential Services Commission (ESC) recommending a cap of four per cent – in line with the Consumer Price Index.

The Government set the rate cap 0.5 per cent below the ESC’s recommendation, taking into account cost of living pressures facing rate payers.

The rate cap limits the amount a council can increase its total revenue from general rates and municipal charges for that year.

Councils set rates for their residents and use the revenue to fund essential community services and infrastructure like local parks, libraries, community centres, roads, kindergartens, waste collection and sports grounds.

Rates are set individually by councils for their municipalities every year through their budget process and must consult with their communities on decisions relating to budgets, rates and other charges.

Under the Local Government Legislative Amendment (Rating and Other Matters) Act 2022, Victorian councils have the power to defer or waive rates, charges and interest to rate payers experiencing financial hardship.

To learn more about how council rates are set, visit https://www.localgovernment.vic.gov.au/ and click on 'Rating reform..."