Plan to cap council rates

AT least one south-west mayor has welcomed a plan by the state opposition to rein in council rates. 

Labor has unveiled plans to cap council rates at CPI if it wins the state election and would force councils to argue further increases at the independent Essential Services Commission (ESC). 

Opposition Leader Daniel Andrews says the policy would deter councils from “wasteful or unnecessary council spending”. 

“This policy also sends a clear message that we expect councils to keep their rates in line with CPI, any increases above this must provide a clear benefit to ratepayers,” Mr Andrews said. 

Moyne Shire mayor James Purcell described the policy as “fantastic”, adding it would show ratepayers when councils are shortchanged by government. 

“The main reason we have to increase rates is because of cost shifting by the state government,” Cr Purcell said. “If you look at libraries 25 years ago they were funded 80 per cent by state government and 20 per cent by councils — now it’s the reverse. 

“Another example is if you look at tips, the EPA standards of rehabilitation are higher now then they ever have been before but they’re not giving us any money for it.”

Cr Purcell said councils would just have to drop services if the Essential Services Commission did not allow the rate rises above CPI. 

“We’ll just have to go back to them (the government) and say what services should we drop?” 

The mayor said the move would also force councils to claw back labour costs. 

“EBAs in local government are well above the private and government sectors ... when you’ve got a council chief executive who earns more than the Premier of Victoria, it’s time for a revaluation.” 

At least one south-west council is proposing a rate increase of 6 per cent in the Southern Grampians Shire. 

Municipal Association of Victoria (MAV) Bill McArthur said council infrastructure in New South Wales was the worst in Australia because of rate capping policies. 

“Rate rise restrictions leave councils with two main choices — reduce services relied on by communities or reduce capital spending to maintain assets. National studies continue to show the quality of NSW local infrastructure is lower than other states, primarily as a consequence of years of rate capping,” Cr McArthur said.

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